Pr Cit-2 Kolhapur v. M/S Rds Construction Co

dik IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. INCOME TAX APPEAL NO. 1615 OF 2016 Pr CIT-2 Kolhapur vs M/s RDS Construction Co. ...Appellant ...Respondent. Mr N.N.Singh for the Appellant. ..... ..... CORAM : AKIL KURESHI & B.P.COLABAWALLA, JJ. FEBRUARY 13, 2019. P.C. : This appeal is filed by the Revenue challenging the Judgment of the Income Tax Appellate Tribunal. The following questions are presented for our consideration “(A)Whether on the facts and in the circumstances of the case and in law, theHon'ble ITAT erred in allowing depreciation @ 80 % on civil construction,electrical and other non-integral installations?Hon'ble ITAT erred in allowing depreciation @ 80 % on civil construction,electrical and other non-integral installations? (B) Whether on the facts and in the circumstances of the case and in law, the Hon'bleITAT erred in allowing depreciation @ 80 % on civil work on which depreciationwas allowable @ 10 % and since civil works are not specially designed devices, thesame are not entitle for higher rate of depreciation?ITAT erred in allowing depreciation @ 80 % on civil work on which depreciationwas allowable @ 10 % and since civil works are not specially designed devices, thesame are not entitle for higher rate of depreciation? (C) Whether on the facts and in the circumstances of the case and in law, the Hon'bleITAT erred in allowing higher rate of depreciation on electrical and otherinstallations without appreciating the fact that electrical items are not part ofelectricity generating apparatus but are part of electricity selling apparatus andthese constitute the block “Plant and Machinery” on which depreciation isallowable @ 15 %?ITAT erred in allowing higher rate of depreciation on electrical and otherinstallations without appreciating the fact that electrical items are not part ofelectricity generating apparatus but are part of electricity selling apparatus andthese constitute the block “Plant and Machinery” on which depreciation isallowable @ 15 %? (D) Whether on the facts and in the circumstances of the case and in law, the Tribunalwas justified in upholding the decision of CIT(A) for deleting the addition atRs.1,47,35,000/- which was made on addition basis” was justified in upholding the decision of CIT(A) for deleting the addition atRs.1,47,35,000/- which was made on addition basis” Pg 1 of 3 2Insofar as question Nos.(a)(b)(c) are concerned, the samecame up for consideration in Income Tax Appeal Nos. 60 of 2015which concerns the same assessee. By a separate order passed today,the same was disposed of making the following observations. “This appeal is filed by the Revenue challenging the Judgment of theIncome Tax Appellate Tribunal. The following questions are presented for ourconsideration “(A)Whether on the facts and in the circumstances of the case and in law, theHon'ble ITAT erred in allowing depreciation @ 80 % on civilconstruction, electrical and other non-integral installations?Hon'ble ITAT erred in allowing depreciation @ 80 % on civilconstruction, electrical and other non-integral installations? (B) Whether on the facts and in the circumstances of the case and in law,the Hon'ble ITAT erred in allowing depreciation @ 80 % on civil workon which depreciation was allowable @ 10 % and since civil works arenot specially designed devices, the same are not entitle for higher rate ofdepreciation?the Hon'ble ITAT erred in allowing depreciation @ 80 % on civil workon which depreciation was allowable @ 10 % and since civil works arenot specially designed devices, the same are not entitle for higher rate ofdepreciation? (B) Whether on the facts and in the circumstances of the case and in law,the Hon'ble ITAT erred in allowing depreciation @ 80 % on civil workon which depreciation was allowable @ 10 % and since civil works arenot specially designed devices, the same are not entitle for higher rate ofdepreciation?the Hon'ble ITAT erred in allowing depreciation @ 80 % on civil workon which depreciation was allowable @ 10 % and since civil works arenot specially designed devices, the same are not entitle for higher rate ofdepreciation? (C) Whether on the facts and in the circumstances of the case and in law,the Hon'ble ITAT erred in allowing higher rate of depreciation onelectrical and other installations without appreciating the fact thatelectrical items are not part of electricity generating apparatus but arepart of electricity selling apparatus and these constitute the block “Plantand Machinery” on which depreciation is allowable @ 15 %?” the Hon'ble ITAT erred in allowing higher rate of depreciation onelectrical and other installations without appreciating the fact thatelectrical items are not part of electricity generating apparatus but arepart of electricity selling apparatus and these constitute the block “Plantand Machinery” on which depreciation is allowable @ 15 %?” 2Learned counsel for the Revenue brought to our notice an order dated30[st] January, 2019 in Income Tax Appeal No.1769 of 2016in which all thesequestion as produced above, came up for consideration. While disposing of theRevenue's appeals, following observations were made “7. Question Nos. (ii), (iii) and (iv) relate to the Revenue's objection to theassessee claiming higher rate of depreciation on the civil construction,electric and other installations by the assessee in the process of erecting andinstalling windmill. The Revenue argues that the expenditure in suchactivities cannot be seen as a part of installation of windmill and, therefore,the depreciation prescribed for the same would not be available to theassessee. We notice that the similar question had come up for considerationbefore this Court in Income Tax Appeal No. 1326 of 2010, wherein theappeal was dismissed by order dated 14[th] June, 2017 making followingobservations:- Pg 2 of 3 “2.The Tribunal has recorded finding of fact that windmill waserected in the desert area of Rajasthan which required specialfoundation of reinforced cement concrete and that the saidreinforced cement concrete formed integral part of the windmill. TheTribunal has also followed the decision of this Court in the case ofCommissioner of Income Tax Vs. Herdilla Chemicals Ltd. recordedin (1995) 216 I.T.R. 742 (Bom) in allowing the claim of theassessee. In our opinion, the finding recorded by the Tribunal thatRCC foundation forms integral part of the windmill is a finding offact and no question of law arises from the same. Hence, the appealis dismissed with no order as to costs” 8.In the result, these additional questions are not entertained.” 3In the result this Income Tax Appeal is dismissed. No order as to costs.” 3Question No.(d) relates to deletion of sum of Rs.1.47crores ( rounded off) by the CIT(A) and the Tribunal. Perusal of theimpugned judgment of the Tribunal would show that the entire issueis based on an appreciation of material on record. The Tribunal notedthat the amount was already taxed in the hands of the sister concernM/s Mahalaxmi Infra Projects Ltd., and therefore, the same could notbe taxed in the hands of the assessee again. No question of law arises.In the result Income Tax Appeal is dismissed. No order as to costs. (B.P.COLABAWALLA, J.) (AKIL KURESHI, J.) Pg 3 of 3