• Welcome to itatonline.org Forum.

Additional depreciation in case of generation and distribution of electricity

Started by vdboss, January 10, 2012, 12:16:28 PM

Previous topic - Next topic


Under the provisions of section 32(iia) of the Income-tax Act, 1961, additional depreciation would be available to an assessee engaged in the business of manufacture or production of any article or thing.

Whether generation of electricity can be considered as manufacture or production of 'article' or 'thing'?

ashutosh majumdar

I know that there is some judgement in the context of sales-tax that electricity is "goods". Let me try and fish it out for you.


Dear Sir,
In case of generation and distribution of electricity, SLM method wud be applicable and additional deprication would not be allowed.

Jitendra Khalpada

Generation of Power & Electricity involves a Series of complex Processes for Manufacture but As per Income Tax Act , This doesn't tantamounts to Manufacture of Article/Goods & hence not elligible for Addl.Depreciation. Strange!!!!!!!!!!!!!!


There is direct judgement of Madras High court which has held that Windmill is elgible for additional depreciation. If plants and machinery is used in power generation and they claim depreciation as per WDV method , my view is it would be elgible for additional depreciation.However if it goes for SLM method , it would not be elgible for additional depreciation.

ashutosh majumdar

Sir, there is a judgement in Tamil Nadu Chlorates in 98 ITD 1 (Che) which is against the assessee. Has that been reversed? Somehow I can't find it on my CTR Online. Can you give the citation Sir.


It is CIT v. High Tech Arai Ltd. (2010) 33 (I) ITCL 278 (Mad-HC) : (2010) 321 ITR 477 (Mad)  followed in CIT v. Texmo Precision Castings (2010) 34 (I) ITCL 418 (Mad-HC) : (2010) 321 ITR 481 (Mad)

ashutosh majumdar

Many Thanks. I wasn't aware of these. I envy your deep knowledge of the subject! Keep it up.  :)