D.K. Srivastava, A.M.: ORDER Both appeals filed by Department are directed against orders passed by learned CIT(A). They relate to asst. yrs. 1996-97 and 1997-98. They involve common issues and hence are being disposed of by consolidated order for sake of convenience. ITA No. 3158/Mum/2000; Asst. yr. 1996-97 2. Ground No. 1 taken by Department this year as also in its appeal for asst. yr. 1997-98 is common and reads as under : "1. On facts and in circumstances of case and in law, learned CIT(A) erred in directing AO to allow depreciation of Rs. 1,03,75,000 on windmills purchased from M/s NEPC Micon (I) Ltd., without appreciating fact that vital spare part namely power panels and its accessories were never transported and delivered to assessee without which operation of windmill is not possible." 3. Briefly stated, facts of case are that assessee was engaged, during period under appeal, in business of manufacturing and sale of automobile seats and spare parts of seats. During previous year relevant to asst. yr. 1996-97, assessee claimed to have purchased and installed two windmills at total cost of Rs. 3,07,50,000. Depreciation at rate of 100 per cent was claimed on windmills out of which 50 per cent was claimed in asst. yr. 1996-97 as windmills were reportedly used for less than 6 months in that year and remaining 50 per cent was claimed in asst. yr. 1997-98. It was case of assessee that it had purchased aforesaid equipments from M/s NEPC Micon (I) Ltd. and commissioned windmills before 31st March, 1996 and therefore it was entitled to claim depreciation at rate of 100 per cent as windmills so commissioned were renewal energy saving devices under Appendix I of IT Rules. AO made comprehensive enquiries in matter. After considering materials collected by him as also explanation given by assessee, AO held that assessee had failed to prove that wind electric generators were erected and had become operational and thereby started generation of electricity in financial year 1995-96 so as to entitle assessee to claim depreciation at rate of 100 per cent on windmills. Detailed reasons have been given by AO in his assessment orders for asst. yrs. 1996-97 and 1997-98 for coming to said conclusion. On appeal, learned CIT(A) has allowed claim of assessee by holding that equipments in question were installed and had also become functional and started generating electricity before 31st March, 1996. Thus, short issue for determination is whether assessee had installed windmills and windmills had become functional so as to generate electricity during year ended 31st March, 1996. 4. items on which assessee claimed depreciation comprised of two numbers of windmills reportedly purchased from M/s NEPC-Micon (I) Ltd. assessee has filed photocopy of its letter dt. 15th Nov., 1995 being work order addressed to NEPC-Micon Ltd. by which it placed order for supply of two numbers of NEPC M 700-225/40 kw wind turbine generator(s) consisting of one tower for hub height 30 mts. in four sections, one set of blades (3 pieces) for 29.6 mts. diameter, nacelle, control panel and internal cables according to technical specifications; construction of foundations including foundation plates for 4 numbers of wind turbine generators; erection, testing and commissioning of 2 WTGs and supply of electricals and transformers (315 KVA, 415V/11 KV) with stipulation that equipments were to be supplied and erected at wind energy project site of assessee in Gujarat for total sum of Rs. 1,90,00,000. order given by assessee was to be executed on turnkey basis. Scope of work order was also specified in said letter. In order to establish that equipments were supplied, installed and made functional before 31st March, 1996, assessee filed copies of certain documents before AO, which are listed in para 4.16 of assessment order. 5. Two of documents filed by assessee before AO were copies of delivery challan Nos. 4334 and 4335 dt. 5th Feb., 1996. Copies of these two delivery challans have been placed by assessee in its paper book filed before us. It is seen that both aforesaid delivery challans were issued by NEPC Micon, Madras on 5th Feb., 1996. Delivery challan No. 4334 was issued NEPC Micon, Madras on 5th Feb., 1996. Delivery challan No. 4334 was issued for delivery of 2 numbers of windmill power panels with accessories through for transportation and delivery through lorry No. KA-01-5341/SCPL at Kalyanpur. In this challan approximate value of goods was shown at Rs. 8 lakhs. Delivery challan No. 4335 was also issued on 5th Feb., 1996 for delivery of two sets (4 numbers) of windmill control and capacitor panels through lorry No. KA- 01-5341/SCPL for delivery at Kalyanpur. In this challan, value of goods was shown at Rs. 6 lakhs. Both aforesaid delivery challans are in favour of assessee. It was case of assessee before AO that aforesaid equipments were transported by M/s Savani Carrying (P) Ltd. and delivered at premises of assessee. In support of aforesaid submission, assessee had also filed before AO copy of consignment note No. 5340 issued by Savani Carrying (P) Ltd. ("assessee s copy" in short) in which name of assessee was shown as consignee and in which place of delivery was mentioned at Kalyanpur in Gujarat State. Same lorry No., i.e., KA- 01-5341 as was shown in both aforesaid delivery challans issued by NEPC Micon was also shown in said consignment note issued by Savani Carrying (P) Ltd. 6. In order to verify correctness of claim made by assessee with regard to transportation and delivery of equipments through Savani Carrying (P) Ltd., AO made enquiries directly from M/s Savani Carrying (P) Ltd. (SCPL) at his level. M/s Savani Carrying (P) Ltd., vide its letter dt. 21st Aug., 1998, furnished to AO copy of consignment note No. 5340 dt. 5th Feb., 1996 ("Savani s copy" in short). Thus AO had two copies of same consignment note issued by Savani Carrying (P) Ltd. While one copy of said consignment was supplied by assessee to AO from its own record ("assessee s copy" in short), other copy of same consignment note was supplied directly to AO by Savani Carrying (P) Ltd. from its own record ("Savani s copy" in short). On perusal of Savani s copy, AO noticed that goods as per delivery challan Nos. 4334 and 4335 of NEPC-Micon Ltd. were delivered to M/s ABS Industries Ltd., 11th floor, Kirti Tower, Tilak Road, Baroda-390 01, Gujarat and not to assessee as shown in assessee s copy of same consignment note No. 5340. Thus AO noted major inconsistency in assessee s copy and Savani s copy of same consignment note. AO noted three major inconsistencies in this behalf. First inconsistency related to name of consignee as entered in consignment note No. 5340. In assessee s copy of consignment note No. 5340 of Savani Carrying (P) Ltd. furnished by assessee before AO, name of assessee was shown as consignee whereas name of ABS Industries Ltd. was shown as consignee in consignment note No. 5340 in Savani s copy furnished by Savani Carrying (P) Ltd. to AO directly. Second inconsistency related to value of goods shown in consignment note. In assessee s copy of consignment note of Savani Carrying (P) Ltd. furnished by assessee before AO, value was shown at Rs. 14 lakhs whereas value of goods was shown at Rs. 21,45,000 in Savani s copy of consignment note furnished by Savani Carrying (P) Ltd. directly to AO. Third inconsistency related to amount of freight shown in copies of both consignment notes. In assessee s copy of consignment note of Savani Carrying (P) Ltd. furnished by assessee before AO, no amount of freight was shown whereas amount of freight was shown at Rs. 10,020 in Savani s copy of consignment note furnished by Savani Carrying (P) Ltd. directly to AO. 7 . In view of aforesaid inconsistencies, AO requested Dy. Director (Inv.), Unit-III(4), Chennai, for further investigation as NEPC Micon Ltd. was located at Madras. Delivery challan register produced by NEPC Micon Ltd. containing carbon copies of delivery challan Nos. 4334 and 4335 reportedly issued by NEPC Micon Ltd. was impounded. On perusal of those delivery challans, it was found that goods, namely, windmill power panel with accessories and windmill control and capacitor panels were dispatched and transported through lorry No. KA-01-5341 of M/s Savani Carrying (P) Ltd. and ultimately delivered to M/s ABS Industries Ltd. at aforesaid address and not to assessee. M/s Savani Carrying (P) Ltd. has time and again reiterated and confirmed factual accuracy of details given in their office copy of consignment note No. 5340 as furnished to AO. Thus, Savani Carrying (P) Ltd. stood by details contained in their office copy of consignment note No. 5340 as furnished to AO. 8 . On being confronted, assessee filed copy of letter dt. 8th Feb., 1999 issued by NEPC Micon Ltd. in which position was explained as under : 1999 issued by NEPC Micon Ltd. in which position was explained as under : "We were executing order of M/s ABS Industries Ltd. during same period and as such delivery challan Nos. 4334 and 4335 both dt. 5th Feb., 1996 were erroneously prepared in name of M/s ABS Industries Ltd. We have already explained to IT Department that said material was excess supply and therefore same was delivered from site to M/s Vijayjyot Seats Ltd. by making necessary corrections in delivery challans at site. However, no corrections were made at head office." 9. AO did not accept aforesaid explanation for reasons given by him in para 4.22 of assessment order for asst. yr. 1996-97. NEPC-Micon Ltd. has tried, vide their letter dt. 8th Feb., 1999, to make out case that it was executing similar work for ABS Industries Ltd. and that delivery challans were erroneously prepared in name of M/s ABS Industries Ltd. which were later corrected and delivery arranged at premises of assessee in Gujarat. AO did not accept aforesaid plea for simple reason that he did not find delivery challan issued by NEPC Micon Ltd. to be in name of ABS Industries Ltd. and hence AO ruled out possibility of correcting delivery challan and consequently arranging delivery at place of assessee. AO felt that evidence in form of copy of consignment note submitted by M/s Savani Carrying (P) Ltd. clinched issue in that there was no evidence to establish as to how equipments in question were carried to premises of assessee. He therefore held that windmills were neither erected not commissioned before 31st March, 1996 and thus denied deduction for depreciation, as claimed by assessee for both years. 10. AO also considered plea of assessee that it had supplied electricity to GSEB before 31st March, 1996 and that this fact by itself proved that assessee had commissioned windmills before 31st March, 1996. assessee had relied upon certificate issued by Gujarat Energy Development Agency (GEDA) certifying share of electricity generated by wind- farms for month of March, 1996 as also for April, 1996 to May, 1997, certificate of commissioning of windmills issued by GEDA, test report for purpose of verification of commissioning issued by GEDA and copy of certificate of inspection issued by Electrical Inspector. AO has dealt with issue in para 4.23 of assessment order for asst. yr. 1996-97 as also in paras 4.2 and 4.3 of assessment order for asst. yr. 1997-98. Para 4.23 of assessment order for asst. yr. 1996-97 reads as under : "4.23 In view of above discussion, and facts as detailed hereinabove, it is clear that wind electric generators were not put into operation and use during financial year 1995-96. Although assessee has furnished certain certificates from M/s GSEB and other agencies in support of stand that wind electric generators were erected and became operational and started generation of electricity within financial year 1995-96, there is, as detailed above, clear documentary evidence that crucial equipments without which wind electric generators cannot become operational and cannot start generation of electricity, were not delivered to assessee by 31st March, 1996. There is therefore no question of wind electric generators becoming operational by 31st March, 1996 within financial year 1995-96 and generation of electricity to take place. So far as, certificate of certain agencies regarding start of generation of electricity is concerned, it may be pointed out that in most of such cases where there is agreement with State Electricity Board for purchase of electricity generated by wind electric generators, generation of electricity is monitored and measured by common meter which is utilized for purpose of monitoring of electricity by all wind electric generators set up in particular locality. assessee had not been able to produce any evidence that certificate regarding generation of electricity from its windmills is based on readings of meter connected solely to wind electric generators owned by assessee only and such meter is not connected to any other wind electric generator owned by others. In view of this, certificates as relied upon by assessee, cannot be taken as evidence that generation of electricity had started by 31st March, 1996 by wind electric generator owned by assessee." 11. Paras 4.2 and 4.3 of assessment order for asst. yr. 1997-98 read as under : "4.2 As per letter dt. 11th Aug., 1999, assessee has claimed that following facts/evidences were rejected by AO during asst. yr. 1996-97 : (i) Certificate by GEDA evidencing installation and commissioning of windmills before 31st March, 1996. (ii) Letter by supplier NEPC Micon Ltd. clarifying confusion created by letter of M/s Savani Carrying (P) Ltd. and confirming purchase of windmills by assessee company. (iii) Clarification by M/s Bayer ABS (ABS Industries). (iv) Purchase of land for windmills reflecting in Sch E to annual account filed along with return of income. 4.3 In this regard it is crucial to point out that issue involved for purpose of allowance of depreciation is whether equipments were put to use or not. As has been discussed in detail in assessment order for asst. yr. 1996-97, since certain crucial equipments necessary for function for windmills were not supplied to assessee by supplier, there is no question of such windmills having been put to use. Here, it is very important to note that in spite of fact that assessee has enumerated certain evidences as above and claimed that these evidence prove stand of assessee, assessee has never been to bring on record direct evidence regarding supply/purchase of equipments mentioned in invoice No. 16779 and consignment note No. 5340 either from M/s NEPC Micon Ltd. or from any other source. letter of M/s NEPC referred to by assessee in its letter dt. 11th Aug., 1989 cannot be taken as genuine in view of reasons stated elaborately in assessment order for asst. yr. 1996-97. In fact, certificate by GEDA referred to by assessee was also considered in assessment order asst. yr. 1996-97. Further during course of assessment proceedings for asst. yr. 1997-98 assessee was required to furnish copy of agreement with M/s Gujarat Energy Development (GEDA). As per this agreement electricity recorded at GEB (Gujarat Electricity Board) sub-station shall be apportioned to individual wind farm owners in same ratio as installed capacity of windmills at various owners as observed in electricity record at Kalyanpur. assessee has also furnished certificates of share of electricity generated by wind farms at Patelka and Kalyanpur for financial year 1996-97. As per these certificates, there are 13 to 14 parties having windmills. total electricity generated which is recorded at GEB s Kalyanpur sub-station is apportioned among various parties owners of wind farms) in proportion of their installed capacity. In view of this, certificate of Gujarat Energy Development Agency regarding apportionment of certain KWH of electricity to account of assessee cannot be taken as production from windmills of assessee because what is being done is that production of several wind farms is collectively measured and same is apportioned among various windmills owners in ratio of their installed capacity as per record. Clearly, therefore such certificates are not conclusive prove of fact that windmills owned by assessee have also produced/generated electricity because. As against this, there is conclusive evidence, as has been mentioned in assessment order for asst. yr. 1996-97 that certain crucial components of windmills have not been supplied to assessee without which it is not possible for windmills to generate electricity." 12 . On appeal, learned CIT(A) has decided issue in favour of assessee with following observations : "I have carefully considered reasoning advanced by AO, arguments and submissions made by appellant company, detailed facts of case and evidences on record. copy of purchase orders received from M/s NEPC Micon (I) Ltd., make it very clear that it was responsibility of M/s NEPC Micon (I) Ltd., to transport and deliver windmill at site of appellant Company M/s NEPC Micon (I) Ltd. were also responsible for their installation, erection and commissioning of windmill at site. Therefore, appellants did not have to pay transportation charges for supply of windmill at site and they were not concerned with transporters as well as transporters had acted upon instructions of M/s NEPC Micon (I) Ltd. for transporting materials to various sites. copy of purchase order was also available at time of assessment proceedings with AO. This information in all, in interest of natural justice, would have been discussed by AO in assessment order. On enquiry with M/s NEPC Micon (I) Ltd., regarding delivery of windmill at site, M/s NEPC Micon (I) Ltd. had given copies of letters dt. 8th Aug., 1998 and 25th Nov., 1995, addressed to AO. Both these letters were not considered in assessment order. letter dt. 8th Aug., 1998 were not considered in assessment order. letter dt. 8th Aug., 1998 confirms sale of windmill, whereas letter dt. 25th Nov., 1995 give details of equipments and materials supplied to various transporters division with regard to letter of GSEB, where they have given credits for units produced by windmills against appellant s total consumption of units for their factory cannot be brushed aside. certificate from GEDA, regarding commissioning of windmill on 30th March, 1996 has to be taken note of. certificate from Electricity Inspector, Rajkot, certifying that windmill was physically inspected, has also to be taken into account. copy of electric bill where units generated from windmill has been set off against electric bill paid by appellant company merely proves that windmills were installed and commissioned before 31st March, 1996. In view of this clear evidences and clinching material which were also available before AO and filed before me, I am inclined to agree with contention of appellant company that windmill was installed and commissioned before 31st March, 1996. Accordingly, I direct AO to allow depreciation to assessee company on purchase of windmill." 1 3 . At time of hearing before us, learned Departmental Representative invited our attention to factual aspects of case and results of investigations highlighted in assessment orders for both assessment years and submitted that orders passed by learned CIT(A) for both assessment years were erroneous in that they were not in conformity with materials brought on record and highlighted by AO in assessment orders. He therefore submitted that orders of AO should be restored. 1 4 . In reply, learned Authorised Representative for assessee supported order of CIT(A). He reiterated submissions which assessee had already made before learned CIT(A). His submissions, in brief, were two-fold : one, it was responsibility of NEPC Micon to supply, deliver, install and commission windmills on turnkey basis and hence manner of transportation was not within control of assessee; and, two, stand of assessee that windmills had been commissioned were proved from fact that electricity was supplied to GSEB and requisite certifications done by GEDA. 15. We have heard both parties. assessee is entitled to deduction for depreciation at rate of 100 per cent only when he installs or commissions renewable energy device being windmills and starts generating electricity from such device. In order to install such device and generate electricity from such device, assessee should not only establish factum of procurement of windmills but also their installation and generation of electricity from them. If assessee does not procure windmills, it cannot install or commission them. If assessee wants Revenue to believe that it had generated electricity from windmills installed by it, it must demonstrate not only procurement of windmills but also their transportation, installation and also generation of electricity from them. If assessee fails to prove transportation of equipments necessary for installation of windmills, question of their installation and generation of electricity from them cannot arise. This is quite natural sequence of events. Emphasis of law governing depreciation at rate of 100 per cent to windmills, as energy saving devices, is to ensure installation of such devices through investment by assessee claiming 100 per cent depreciation. In case before us, assessee has submitted copy of work order, which does not establish transportation and consequential installation of windmills. assessee has squarely failed to satisfactorily explain as to how equipments were transported from Chennai to Kalyanpur in Gujarat. question of their installation at premises of assessee would arise only when they are first shown to have been transported to and delivered at premises of assessee. burden was indeed on assessee and assessee alone to establish delivery of equipments and their mode of delivery at premises of assessee in Gujarat. assessee could not establish delivery of equipments at its premises and hence case of assessee falls flat on its face. Revenue, on other hand, has brought sufficient evidence on record to show that equipments allegedly transported from Chennai were in fact delivered at premises of ABS Industries Ltd. and not at premises of assessee. evidence brought o n record by Revenue exposes falsity of claim made by assessee. And evidence brought on record by Revenue has also remained uncontroverted and un-rebutted by assessee despite opportunity given to assessee. transporter, namely, M/s Savani Carrying (P) Ltd., has categorically denied delivery of equipments in question at premises of assessee. It was indeed not possible for assessee to commission windmill unless aforesaid equipments were transported to and delivered at premises of assessee in Gujarat. It cannot be case of anyone that equipments of such huge size could have been procured from Chennai and installed in Gujarat without their transportation to and delivery at premises of assessee in Gujarat. Learned CIT(A) has conveniently ignored this important aspect of case. 16. Besides, AO has given sufficient reason for rejecting claim of assessee that it had supplied electricity to GSEB and therefore assessee should be presumed to have commissioned windmills before 31st March, 1996. AO has discredited evidence submitted by assessee on ground that total generation of electricity in wind farms was allocated between owners of windmills and that electricity generation was not measured with reference to independent meters installed for each windmill. reasoning given by AO in para 4.23 of assessment order for asst. yr. 1996-97 and in paras 4.2 and 4.3 of assessment order for asst. yr. 1997-98 in this behalf has also not been controverted in order passed by learned CIT(A). AO has further observed that depreciation at rate of 100 per cent was not admissible unless assessee established procurement, transportation, installation and commissioning of renewal energy devices before expiry of relevant previous year. assessee wants Revenue to draw presumption of installation of windmills on ground that electricity generated from its wind-farm was supplied to GEDA. Presumption cannot be drawn unless basic facts necessary for drawing presumption are established. In present case, assessee has not established basic fact of transportation and delivery of such huge equipments at premises of assessee in Gujarat and hence presumption cannot be drawn about their installation before 31st March, 1996. It was for assessee to satisfactorily explain and establish as to how it could install windmills without transportation and delivery of equipments at premises of assessee and as to how assessee could generate electricity without installing windmills. assessee has failed to reconcile inconsistency inherent in its own stand. Depreciation at rate of 100 per cent is admissible on renewable energy devices. assessee must therefore establish procurement, transportation, installation and commissioning of such device before expiry of relevant previous year which assessee has failed to establish. AO has rightly come to conclusion that there is no positive evidence to establish that equipments procured from NEPC-Micon were transported from Chennai to Gujarat and installed at premises of assessee. 17. In view of foregoing, order passed by CIT(A) deserves to be reversed and that of AO restored. We therefore reverse his order and restore order of AO in this behalf. Ground No. 1 is allowed. 18-31. These paras are not reproduced here as they involve minor issues. 32. In view of aforesaid, both appeals filed by Department stand partly allowed. *** ASSISTANT COMMISSIONER OF INCOME TAX v. VIJAYJYOT SEATS LTD.