Case Law Details
PCIT Vs Kadodara Power Pvt Ltd (Gujarat High Court)
It is now a settled position as held by the Hon’ble Supreme Court and the various Coordinate Benches of the Tribunal that the process of generation of electricity is akin to manufacture of an article or thing, the assessee in the instant case satisfy the requirement that it is engaged in the business of manufacture or production of an article or thing. Now coming to the amendment which has been broughtin by the Finance Act 2012 w.e.f. A.Y. 2013-14 whereby the assessee engaged in the business of generation or generation & distribution of power have specifically been included and held eligible for claim of additional depreciation. In our view, the said amendment cannot be held to disentitle the assessee to claim of the additional depreciation. Various Coordinate Benches have held that even prior to the amendment brought in by the Finance Act, 2012, the assessees enegaged in generation or generation and distribution of electricity were held eligible for additional depreciation. In this regard, reference can be drawn to the decision of NTPC Ltd. (supra). No contrary authority has been brought to our notice. In our view, the said amendment cannot be read to negate the settled legal position that generation of electricity is akin to manufacture or production of an article or thing. The said amendment by the Finance Act 2912 gives an impetus to the view that generation of electricity is a manufacturing process. In light of above, the assessee is held entitled to the additional claim of depreciation on plants and machinery installed in the Captive Power Plant.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. This tax appeal under Section 260A of the Income Tax Act, 1961 [for short ‘the Act, 1961’] is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Surat Bench, Surat in the ITA No.143/AHD/2016, dated 06/09/2018 for the A.Y 2006-07.
2. The Revenue has proposed the following substantial question of law for the consideration of this Court:
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