MAHABAL METALS PVT LTD,,MIRAJ vs. ASSISTANT COMMISSIONER OF INCOME TAX,, SANGLI

Shri C.H. Naniwadekar appearing on behalf of the assessee submitted that the assessee is engaged in manufacturing of auto parts and generation of electricity through Windmill. The assessee has installed four Windmill units and has claimed additional depreciation on the Windmill. The Assessing Officer and the Commissioner of Income Tax (Appeals) have denied the assessee’s claim of additional depreciation on Windmill u/s. 32(1)(iia) of the Act. The issue is now squarely covered in favour of the assessee by the decision of Hon’ble Madras High Court in the case of Commissioner of Income Tax Vs. Hi Tech Arai Ltd. reported as 321 ITR 477, which was subsequently followed by the Hon’ble High Court in the case of Commissioner of Income Tax Vs. Atlas Export Enterprises reported as 373 ITR 414 (Mad.). The ld. AR submitted that the Hon’ble Bombay High Court in the case of Commissioner of Income Tax Vs. V.M. Salgaonkar & Bros. (P.) Ltd. reported as 272 CTR 25 has held that where the assessee is also engaged in generation of Windmill energy, the assessee would be entitled to additional depreciation under the provisions of section 32(1)(iia) of the Act. The ld. AR further submitted that Pune Bench Third Member decision in the case of M/s. Giriraj Enterprises Vs. Dy. Commissioner of Income Tax reported as 186 TTJ 146 has reiterated the law laid down by the Hon’ble Madras High Court in the case of Commissioner of Income Tax Vs. Atlas Export Enterprises (supra).

On the other hand Shri N. Ashok Babu representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee.

Both sides heard. Orders of the authorities below perused. The solitary issue in the appeal is with respect to allowability of assessee’s claim of additional depreciation u/s. 32(1)(iia) of the Act on Windmill. The allowability of additional depreciation on Windmill is no more res integra. The Hon’ble Madras High Court in the case of Commissioner of Income Tax Vs. Hi Tech Arai Ltd. (supra) has held that apart from other business where the assessee is engaged in generation of power through Windmill, the assessee is eligible to claim additional depreciation u/s. 32(1)(iia) of the Act. This position was reiterated by the Hon’ble Madras High Court in the case of Commissioner of Income Tax Vs. Atlas Export Enterprises (supra). The Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. V.M. Salgaonkar & Bros. (P.) Ltd. (supra) had held that where the assessee company is engaged in the business of iron ore and also in generation of Windmill energy, the assessee would be entitled to additional depreciation u/s. 32(1)(iia) of the Act. The Tribunal in various decisions have reiterated the law laid down by the Hon’ble Madras High Court and the Hon’ble Bombay High Court.

Thus, in view of well settled law, we find merit in the contentions of the assessee and allow the solitary ground raised in the appeal. The findings of Commissioner of Income Tax (Appeals) on this issue are reversed. The Assessing Officer is directed to grant the benefit of

In the result, the appeal of assessee is allowed.