The ITAT set aside a write-off on an abandoned wind project, upholding claims for forward premium amortization and higher vehicle depreciation. This ruling advances the precedent for similar claims.
ITAT Sets Aside ₹60.26 Cr Write‑Off on Abandoned Wind Project u/s 37: Allows Forward Premium & Vehicle Depreciation Claims
The Income Tax Appellate Tribunal (ITAT) has overturned a ₹60.26 crore write-off concerning an abandoned wind energy project, allowing claims for forward premium amortization and increased depreciation on vehicles used in the project. This judgement reaffirms earlier Tribunal positions favoring such claims.
In its assessment, the Tribunal highlighted the need to consider the economic realities of the business rather than solely adhering to accounting formalities. It stressed that expenses incurred in the course of a project ought to be justifiably accounted for, reflecting the genuine operational costs faced by entities.
This ruling thus establishes a precedent for similar cases, reiterating the importance of the substance over form principle in tax law. By recognizing legitimate expenditure, the ruling stands to benefit companies operating in capital-intensive sectors.
Legal professionals should take note of this decision, which emphasizes a wider latitude for capital expenses in tax assessments. Entities involved in similar industries may find respite in this precedent as they undertake tax-related deductions for related expenses.
Citations
- ITAT Order (2026) 5 ITC 567
