Ita/102/2009 Of The Commissioner Of Income Tax, Cochin v. Eastern Condiments (P) Ltd, Adimali

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 28TH OCTOBER 2009 / 6TH KARTHIKA 1931 ITA.No. 102 of 2009() --------------------- ITA.122/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- EASTERN CONDIMENTS (P) LTD EASTERN VALLEY, ADIMALI. ADV. SRI.P.BALAKRISHNAN (E) FOR R1 THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 28/10/2009, ALONG WITH ITA NO. 121 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -------------------------------------------- I.T.A. Nos. 102 & 121 OF 2009 -------------------------------------------- Dated this the 28th day of October, 2009 JUDGMENT Ramachandran Nair, J. The common question raised in the appeals filed by the revenueis whether the Tribunal was justified in granting depreciation for thewind mill installed by the respondent-assessee for power generation.We have heard standing counsel appearing for the appellant and Sri. P.Balakrishnan, counsel appearing for the respondent-assessee. 2. Admittedly wind mill was stated to be commissioned on31.3.2003, the last day of previous year. The claim of depreciation was disallowed by the assessing officer for the reason that there was noproof of installation and commissioning of the project. However, theTribunal allowed the claim based on a certificate issued by the TamilNadu Electricity Board. Standing counsel submitted that certificate assuch is no evidence towards installation and commissioning of theproject qualifying for depreciation. We agree with this contentionbecause the certificate issued by the Engineer of TNEB is not proof of installation and commissioning of the project. In the first place, thereshould be power purchase agreement with the TNEB and the assesseefor acceptance of power generated to the grid of TNEB. Based on theterms of agreement, it is for the assessee to take supply from TNEBlines for the quantity generated and supplied by them after deductingtransmission loss or on payment of wheeling charges. Generation andsupply to Tamil Nadu grid will be recorded in the register maintainedby the assessee and approved by the TNEB. If the wind mill is to beinstalled and commissioned on 31.3.2003 then the equipment should bepurchased and transported much before the date of commissioning andEngineering firm which installed the same would have issuedinstallation and commissioning certificate. We do not find any of thesedocuments either produced or relied on by the Tribunal before allowingthe claim. For the year 2003-04, the claim has to be more criticallyexamined because even according to assessee commissioning is doneonly on the last day of the previous year. However, if at least in theaccounting year 2003-04 the plant is commissioned, then certainlyassessee is entitled to depreciation for the subsequent assessment years. Since the Tribunal has not considered documents in support of proof ofinstallation and commissioning of the wind mill, with purchase bills ofplant and machinery, contractor's report on installation, details ofpayments made etc., we allow the appeals by setting aside the orders ofthe Tribunal and remand the case to the assessing officer forreconsideration based on the evidence to be produced by the assessee. Appeals are allowed as above. (C.N.RAMACHANDRAN NAIR)Judge. (V.K. MOHANAN) Judge. kk