IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 10.11.2014 CORAM HON'BLE MR.JUSTICE R.SUDHAKAR AND HON'BLE MR.JUSTICE G.M.AKBAR ALI T.C.(A).No.874 of 2014 Commissioner of Income Tax 63, Race Course Road Coimbatore 641 018. .. Appellant Vs. Pongalur Pioneer Textiles Pvt. Ltd. No.8, Sundaram Apartments 89, Race Course Road Coimbatore 641 018. PAN: AABCP3017C .. Respondent PRAYER: Appeal under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal 'C' Bench, Chennai, dated 23.5.2014 made in I.T.A.No.2089/Mds/2012 for assessment year 2005- 2006. For Appellant : Mrs.Hemalatha Standing Counsel JUDGMENT (Delivered by R.SUDHAKAR, J.) Revenue has filed this appeal challenging order of Income Tax Appellate Tribunal 'C' Bench, Chennai, dated 23.5.2014 made in I.T.A.No.2089/Mds/2012 for assessment year 2005-2006, by raising following questions of law: (2) (i) Whether under facts and circumstances of case, Income Tax Appellate Tribunal was right in holding that, assessee has satisfied requirement of second proviso to Rule 5(1A) of Income Tax Rules, and they are entitled for depreciation on windmills as per Appendix I is valid? (ii) Whether under facts and circumstances of case, Income Tax Appellate Tribunal was right in law in granting depreciation at 80% on windmills, even though proviso to section 32(1)(i) and Rule 5(1A) clearly stipulate that only rate of depreciation on method as provided for in Appendix IA will be relevant for power generating Machinery? (iii) Whether under facts and circumstances of case, Income Tax Appellate Tribunal was right in law in granting depreciation at 80% on windmills, even though assessee is entitled at rate of 7.69% of cost and this rate has correctly been allowed by assessing officer? (iv) Whether under facts and circumstances of case, Income Tax Appellate Tribunal was right in law in holding that assessee is entitled to higher rate of depreciation even though assessee had filed return of income within due date and has also not exercised its option separately? (3) 2. issue involved in this Tax Case (Appeal) relates to claim of depreciation by assessee on installation of windmill, which according to Revenue is contrary to Rule 5(1A) of Income Tax Rules and Appendix 1A. 3. learned standing counsel appearing for Revenue submits that above said issue is covered by decision of this Court dated 09.09.2014 made in T.C.(A)Nos.330 of 2013 etc. batch. 4. In above said decision, this Court, following decision of Bombay High Court reported in CIT V. Vijaya Hirasa Kalamkar (HUF), [1998] 229 ITR 772, held as follows: "20. reading of above-said decision of Bombay High Court makes it clear that if assessee exercised option in terms of second proviso to Rule 5(1A) of Income Tax Rules at time of furnishing of return of income, it will suffice and no separate letter or request or intimation with regard to of exercise of option is required. Since returns are filed in accordance with Section 139(1) of Income Tax Act and form prescribed therein make provision for exercising option in respect of claim of depreciation, no separate procedure is required, as contended by Department. We are in agreement with reasoning of Tribunal. (4) 21. Accordingly, question of law is answered in favour of assessee and against Revenue." 5. Following above said decision of this Court, substantial questions of law raised are answered in favour of assessee and against Revenue and accordingly, this Tax Case (Appeal) stands dismissed. (R.S.J.) (G.M.A.J.) 10.11.2014 Index : No Internet : Yes sasi To: 1. Assistant Registrar, Income Tax Appellate Tribunal Chennai Bench "C", Chennai. 2. Secretary, Central Board of Direct Taxes, New Delhi. 3. Commissioner of Income Tax (Appeals)-I Coimbatore. 4. Assistant Commissioner of Income Tax Company Circle-I(1), Coimbatore. (5) R.SUDHAKAR,J. and G.M.AKBAR ALI,J. (sasi) T.C.(A).No.874 of 2014 10.11.2014 Commissioner of Income-tax, Coimbatore v. Pongalur Pioneer Textiles Pvt. Ltd