Law: Income Tax Act, 1961

Section: 32(1)(iia)

Law: Income Tax Act, 1961

Section: 32(1)(iia)

JUDGMENT R. Sudhakar, J. - The above Tax Case (Appeals) are filed by the Revenue as against the order dated 26.06.2014 made in I.T.A.Nos.154&155/Mds/2014 on the file of the Income Tax Appellate Tribunal Madras 'B' Bench for the assessment years 2005-06 and 2006-07 raising the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the generation of electricity by wind mill amounts to production of an article or thing and consequently holding that the assessee is entitled for additional depreciation as per Section 32(1)(iia)?" 2. The brief facts of the case in a nutshell are as follows: The assessee is a partnership firm engaged in the business of textiles and generation and distribution of power. The assessee filed return of income claiming additional depreciation on windmill. The Assessing Officer disallowed the assessee's claim of additional depreciation on windmill under Section 32(1)(iia) of the Income Tax Act holding that the assessee failed to satisfy one of the condition, namely, the assessee should be engaged in the business of manufacture and production of an article or a thing. The Assessing Officer further held that the production of electricity through windmill was not production of an article or thing. Aggrieved by the same, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who, by following the decisions of this Court in the case of CIT v. VTM Ltd. [2009] 319 ITR 366/[2010] 187 Taxman 319 and CIT v. Hi Tech Arai Ltd. [2010] 321 ITR 477 (Mad.) allowed the appeal. As against the same, the Revenue preferred an appeal before the Income Tax Appellate Tribunal, which dismissed the appeal following the decision of this Court in the case of VTM Ltd. (supra). It is stated by the Tribunal that as against the said decision of this Court, the Revenue preferred an appeal before the Supreme Court and the Supreme Court dismissed the same in the SLP stage itself. Hence, the Tribunal held that no material has been brought on record to show that the said decision of this Court in the case of VTM Ltd. (supra) has been either modified or reversed by…

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