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Depreciation on windmill earthwork & civil work

CA Shraddha (Mcom, CS Exe.) (Service) (224 Points)

11 May 2012

Dear All,

My query is in respect of claim of depreciation as well as additional depreciation on earthwork /civil work carried out to provide support to windmill. Whether the claim is allowable or not ? Any judgments in this regard. I have studied the below mentiioned case:

ACIT (OSD) vs. Parry Engineering & Electronics P. Ltd. ITA No. 3317/Ahd/ 2011

Regards,

Shraddha

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3 Replies

Priya (article) (503 Points)
Replied 11 May 2012

shouldnt civil work be capitalised with windmill cost. And dep wil be on mill acordingly

1 Like

CA Shraddha (Mcom, CS Exe.) (Service) (224 Points)
Replied 12 May 2012

Thanks priya but a want some judgments to substantiate my claim. Can anyone quote ant judgment ???

Regards,

Shraddha

Eshita S Shah (Practicing CA ) (75 Points)
Replied 12 May 2012

Hi Sradha

See i dont hav any judgements to quote for but by reading the section i can prove that we can claim depreciation and additional depreciation on earthwork/civil work to support the wind mill

As per Section 43(1) of the Income tax Act which talks abt the Cost for the purpose of claiming depreciation. This section says that Cost includes Installation and Erection Charges Loading and Unloading Chargres Freight and Interest on Loan taken upto the date of usage of asset. Since eartwork/civil work are an integral part to support the windmill it shoul be added to cost of windmill. Thereby u shall be entitled to claim depreciation on that. And since if the same windmill is used for manufacture purpose u can claim additional depreciation too. If u hav any further doubts pls let me knw.