a)The assessee-company purchased windmill. For the operation and maintenance of the windmill, assessee made specific civil and electrical installations.
b)It claimed depreciation at the rate of 80 per cent on said installations which was disallowed by Assessing Officer.
c)On appeal, appellate authorities allowed the assessee's claim on ground that the foundation, civil and electrical works were necessary for the installation of the windmill and was clearly part and parcel of the windmill project on which depreciation at the rate of 80 per cent was allowable.
d)Aggrieved by the order of appellate authorities, Revenue filed the instant appeal before the High Court.
The High Court held in favour of assessee as under:
1)The Legislature has provided for higher rate of depreciation at 80 per cent on renewable energy devices, including windmill and any specially designed devise, which runs on windmill.
2)Windmill is scientifically designed machinery and it has to be fitted and mounted on a civil construction, equipped with electric fittings in order to harness the wind energy to the maximum potential.
3)Thus, it can be easily imagined that windmill cannot function without appropriate installation and electrification.
4)Therefore, the approach of appellate authorities to allow depreciation at the rate of 80 per cent on such installation was perfectly justified, as civil structure and the electric fitting were part and parcel of the windmill and could not be separated from the same - CIT V. PARRY ENGINEERING & ELECTRONICS (P.) LTD. 49 taxmann.com 252 (Gujarat)