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: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- 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 revenue is whether the Tribunal was justified in granting depreciation for the wind 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 on 31.3.2003, the last day of previous year. The claim of depreciation was disallowed by the assessing officer for the reason that there was no proof of installation and commissioning of the project. However, the Tribunal allowed the claim based on a certificate issued by the Tamil Nadu Electricity Board. Standing counsel submitted that certificate as such is no evidence towards installation and commissioning of the project qualifying for depreciation. We agree with this contention because the certificate issued by the Engineer of TNEB is not proof of 2 installation and commissioning of the project. In the first place, there should be power purchase agreement with the TNEB and the assessee for acceptance of power generated to the grid of TNEB. Based on the terms of agreement, it is for the assessee to take supply from TNEB lines for the quantity generated and supplied by them after deducting transmission loss or on payment of wheeling charges. Generation and supply to Tamil Nadu grid will be recorded in the register maintained by the assessee and approved by the TNEB. If the wind mill is to be installed and commissioned on 31.3.2003 then the equipment should be purchased and transported much before the date of commissioning and Engineering firm which installed the same would have issued installation and commissioning certificate. We do not find any of these documents either produced or relied on by the Tribunal before allowing the claim. For the year 2003-04, the claim has to be more critically examined because even according to assessee commissioning is done only on the last day of the previous year. However, if at least in the accounting year 2003-04 the plant is commissioned, then certainly assessee is entitled to depreciation for the subsequent assessment years. 3 Since the Tribunal has not considered documents in support of proof of installation and commissioning of the wind mill, with purchase bills of plant and machinery, contractor's report on installation, details of payments made etc., we allow the appeals by setting aside the orders of the Tribunal and remand the case to the assessing officer for reconsideration 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 4