INCOME TAX ACT, 1961

Section 32(1)

Depreciation - Higher rate - Cost of civil engineering works - Cost of civil engineering works being part of cost of installation of solar power plant

Assessee-company claimed depreciation on solar power plant, which included cost of civil engineering works. AO was of the view that the assessee claimed excess depreciation in respect of cost of civil engineering works as the same was eligible for depreciation as applicable on building and not at the rate of depreciation on plant and machinery. Accordingly, the AO bifurcated total cost of solar power plant and separated the cost of civil engineering works and allowed depreciation on the same at the rate as applicable on building. Held: AO did not dispute the fact that soil leveling and other civil works carried out by assessee was required for installation of solar power panels. Thus, the expenditure, which was incurred by the assessee in the process of installation of solar panels, was for the purpose of solar power plant. Therefore, the cost of said work could not be separated from the installation of solar power plant and entire cost of solar power plant was eligible for depreciation as applicable for plant and machinery. Hence, the cost of civil engineering works being part of the cost of installation of the solar power plant would be eligible for depreciation at the rate of depreciation on plant and machinery.

Relied:CIT v. K.K. Enterprises [2014] 227 Taxman (Magz) 181 (Raj.)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 4

SUBSCRIBE FOR FULL CONTENT

OR Try Reload the Page