Case Law Details
Viney Corporation Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that depreciation on Solar Power Plant installed on office building which is part of factory and electricity so generated is used for factory only is allowable as per provision of law.
Facts- The assessee is engaged in manufacturing of auto components and entered into domestic transaction with its Associate Enterprise. Accordingly, the issue was referred to Transfer Pricing Officer (TPO). On the basis of recommendation of TPO, a draft assessment order was passed u/s 143(3)/ 144C of the Act on 31.12.2018. The assessee filed its objection before Dispute Resolution Panel (DRP). In respect of claim of additional depreciation, Ld. DRP did not accept the prayer of the assessee on the basis that since the solar plant of 160 MW was installed at IMT Manesar, Gurgaon for the captive use of the office. Hence, it was not entitled for additional depreciation. In pursuance of direction of Ld. DRP, the AO passed assessment order dated 31.10.2019. Thereby, he made additions of INR 3,55,95,528/- qua depreciation claimed for installation of Solar Power Plants. Thus, The AO assessee the income at INR 26,30,09,150/-.
Being aggrieved, the present appeal is filed.
Conclusion- Held that Solar Power Plant is of very high capacity and it is stated at bar that the office building is part of factory and electricity so generated is used for factory only. The issue is restored to the file of AO for verification. If the AO finds that the office is part of factory building and electricity is generated for captive use of factory. He would allow the depreciation as per provision of law. This ground of assessee’s appeal is allowed for statistical purposes.
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