02 February 2012
If you refer to the below decision
2011-TIOL-297-ITAT-MAD
TVS Motor Company Ltd Vs ACIT, Chennai (Dated: December 22, 2010)
Income Tax - Sections 28, 32, 37, 40(a)(ia), 41(1), 143(3), 147 - Whether expenses incurred on tools and dies are revenue in nature - Whether it is legal to claim deduction of the expenses incurred in relation to services provided to subsidiary company when the amount recovered in excess as reimbursement had been offered for taxation under the head business income - Whether 100% depreciation is allowable on reverse osmosis plant installed for treating effluents discharged by the company - Whether remission of deferred sale tax liability, which liability acquired the shape of loan, is taxable receipt in view of the provisions of section 41(1) or 28(iv) or capital receipt - Whether provisions of section 40(a)(ia) can be invoked in relation to payments made to such foreign company whose income is not chargeable to tax in India. - Assessee's appeal dismissed: CHENNAI ITAT;
21 July 2024
Under Section 32 of the Income Tax Act, 1961, certain energy-saving devices and equipment are eligible for accelerated depreciation rates, typically up to 80%. These include machinery and plant used in businesses that conserve energy or use renewable sources of energy.
Regarding RO (Reverse Osmosis) plants specifically, their eligibility for accelerated depreciation under Section 32 depends on whether they meet the criteria set out by the Income Tax Rules. Typically, RO plants used for water purification purposes may not qualify as energy-saving devices unless they are specifically designed to be energy-efficient or use renewable energy sources.
Here are some key considerations:
1. **Energy-Saving Criteria:** RO plants must contribute to energy conservation or utilize renewable energy sources to qualify for accelerated depreciation. If the RO plant is designed with energy-saving features or operates using renewable energy, it may be eligible.
2. **Industry-Specific Guidelines:** Specific guidelines and classifications exist under the Income Tax Rules for what constitutes energy-saving devices. RO plants would need to fit within these classifications to qualify.
3. **Consultation with Tax Advisor:** It's advisable to consult with a tax advisor or chartered accountant who can assess the specific features and usage of your RO plant against the Income Tax Rules. They can provide guidance on whether it qualifies for accelerated depreciation and at what rate.
In summary, while some energy-saving plants and machinery qualify for accelerated depreciation under Section 32 of the Income Tax Act, the eligibility of an RO plant would depend on its design and operational characteristics related to energy conservation or renewable energy usage.
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