RADHA KRISHAN BENIWAL, Jaipur v. ACIT, Jaipur

ITA 469/JPR/2016 | 2010-2011
Pronouncement Date: 30-09-2016 | Result: Allowed

Appeal Details

RSA Number 46923114 RSA 2016
Assessee PAN AGMPB3851A
Bench Jaipur
Appeal Number ITA 469/JPR/2016
Duration Of Justice 4 month(s) 26 day(s)
Appellant RADHA KRISHAN BENIWAL, Jaipur
Respondent ACIT, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 30-09-2016
Assessment Year 2010-2011
Appeal Filed On 04-05-2016
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHE S JAIPUR JH HKKXPUN] YS[KK LNL; OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND AM AND SHRI KUL BHARAT JM VK;DJ VIHY LA-@ ITA NO. 469/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. SHRI RADHA KRISHAN BENIWAL STAR RESIDENCY VAISHALI NAGAR JAIPUR. CUKE VS. THE ASSTT. COMMISSIONER OF INCOME - TAX CIRCLE-3 JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGMPB 3851 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DAGUR (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01.09.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/09/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I JAIPUR DATED 22.02.2016 PERTAINING TO A.Y. 2010-11. THE ONLY EFFECTIVE GROUND IN THIS APPEAL READS AS UNDER :- THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT JCB EXCAVATOR MOTOR GRA DER AND SOIL COMPACTOR USED IN THE BUSINESS OF CONSTRUCTION OF R OAD EXCLUSIVELY ARE NOT COMMERCIAL VEHICLES AS THEY ARE NOT USED SOLELY FOR CARRIAGE OF GOODS AND THUS ENTITLED TO NORMAL DEPRECIATION @ 15 % AS AGAINST 50% CLAIMED BY ASSESSEE AND THEREBY CONFIRMING THE ADDI TION OF RS. 30 52 875/- MADE BY AO ON ACCOUNT OF EXCESS DEPRECI ATION. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT AND THE ASSESSMENT UNDER SE CTION 143(3) READ WITH SECTION 2 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL 148 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERR ED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 12.02.2015. WHILE FRAMING THE ASS ESSMENT THE AO OBSERVED THAT THE ASSESSEE CLAIMED DEPRECIATION ON SOIL COMPACTOR OF RS. 18 60 000/- JCB EXCAVATOR OF RS. 30 75 000/- AND TATA MOTOR GRADER OF RS. 37 87 500/- AT HIGHER RATE @ 50% AMOUNTING TO RS. 43 61 250/-. HOWEVER IN THE OPINION OF THE AO THE ASSESSEE WAS ENTITLED FOR DEPRECIATION OF RS. 13 08 375/- @ 15% I.E. NORMAL RATE OF DEPRECIATION AND THUS DISALLOWED EXCESS DEPRECIATIO N OF RS. 30 52 875/-. THE ASSESSEE AGGRIEVED BY THIS ORDER PREFERRED AN APPE AL BEFORE LD. CIT (A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISS ED THE APPEAL. 3. NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS ARE MADE IN THE WRITTEN BRIEF. THE LD. COUNSEL SUBMITTED THAT THE ISSUE IS WHETHER SOIL COMPACTOR JCB EXCAVATOR AND TATA MOTOR GRADE PURCH ASED BY THE ASSESSEE IN THE PREVIOUS YEAR ARE PART OF THE HEAVY VEHICLES FORM P ART OF THE COMMERCIAL VEHICLE OR NOT. HE SUBMITTED THAT JCB EXCAVATOR TATA MOTOR G RADER AND SOIL COMPACTOR ARE COMMERCIALLY USED IN CONSTRUCTION BUSINESS. THE SAM E FALLS IN THE DEFINITION OF THE HEAVY MOTOR VEHICLES AND IS ALSO ACCEPTED BY THE AO . THE HEAVY GOODS VEHICLE FALLS WITHIN THE DEFINITION OF COMMERCIAL VEHICLE. THEREF ORE THE ASSESSEE HAS CORRECTLY CLAIMED THE DEPRECIATION ON THESE ITEMS @ 50%. HE SUBMITTED THAT THE AO MERELY ON THE BASIS OF ASSUMPTION AND PRESUMPTIONS HELD TH AT IT IS A HEAVY GOODS VEHICLE BUT NOT COMMERCIAL VEHICLE. HE SUBMITTED THAT THES E VEHICLES ARE PART OF THE COMMERCIAL VEHICLES ELIGIBLE FOR HIGHER RATE OF DEP RECIATION. HE PLACED RELIANCE ON JUDGMENT OF HONBLE KERALA HIGH COURT RENDERED IN T HE CASE OF CIT VS. GLOARD 3 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL CONSTRUCTION 77 CCH 752 (KER.HC) WHEREIN THE HONB LE HIGH COURT HAS HELD THAT A JCB IS A MOTOR VEHICLE WITHIN THE MEANING OF THE SA ID TERM AS IT IS REGISTERED AS A MOTOR VEHICLE UNDER THE MOTOR VEHICLE ACT AND IT AN SWERS THE DESCRIPTION OF MOTOR LORRY WITHIN THE MEANING OF THE RELEVANT ENTRY IN T HE IT RULES AND THEREFORE IT IS ENTITLED TO HIGHER RATE OF DEPRECIATION. HE SUBMIT TED THAT THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. RAKESH JAIN (2 011) 30 CCH 348 (CHD. TRIBUNAL) HELD THAT TIPPERS VIBRATOR AND SOIL COMPACTOR ARE COMMERCIAL VEHICLE LIABLE FOR HIGHER RATE OF DEPRECIATION. IT WAS SUBMITTED THAT IF THE ACTION OF THE AO IS UPHELD THE AO BE DIRECTED TO ALLOW THE DEPRECIATION ON THE INCREASED WRITTEN DOWN VALUE IN THE NEXT YEAR. 4.1. ON THE CONTRARY THE LD. D/R SUBMITTED THAT TH E ISSUE OF AVAILABILITY OF DEPRECIATION HAS BEEN DECIDED BY THE COORDINATE BEN CH IN THE CASE OF M/S. MAGTRON EARTH MOVERS VS. ITO IN ITA NO. 818/BANG./2010. TH E LD. D/R ALSO RELIED ON THE JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS. M/S. GOTAN LIME STONE & OTHERS IN INCOME TAX APPEAL NO. 41/2002. HE ALSO RELIED UPON THE JUDGMENT OF THE HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. SIBSON CONSTRUCTION & CO. AND ALSO THE JUDGMENT OF HONBLE ANDHRA PRADESH HIGH COURT TENDERED IN THE CASE OF CIT VS. PROGRESSIVE ENGINEE RING CO. 230 ITR 729 (AP). 4.2. IN REJOINDER THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE JUDGMENTS WERE CONSIDERED BY THE COORDINATE BENCH IN THE CASE OF ACIT VS. M/S. SAYEED IQBAL IN ITA NO. 39/JU/2009. 4.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE TO BE DECIDED IS WHETHER THE ASSESSEE IS ENTITLED FOR 4 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL DEPRECIATION @ 50% ON JCB EXCAVATOR TATA MOTOR GRA DER AND SOIL COMPACTOR AS CLAIMED. WE FIND THAT THERE ARE CONFLICTING VIEWS BY THE COORDINATE BENCHES OF THE TRIBUNAL IN RESPECT OF AVAILABILITY OF THE DEPRECIA TION AT HIGHER RATE. THE LD. CIT (A) DECIDED THE ISSUE IN PARA 3.2.2 OF HIS ORDER BY OBS ERVING AS UNDER :- 3.2.2. (I) THE FACTS OF THE CASE ARE THAT THE APP ELLANT IS ENGAGED EXCLUSIVELY IN THE BUSINESS OF ROAD CONSTRUCTION WO RK UNDER PMGSY AND OTHER SCHEMES MADE BY THE GOVERNMENT FOR RURAL DEVE LOPMENT. DURING THE YEAR UNDER CONSIDERATION THE APPELLANT CLAIMED DEPRECIATION AT HIGHER RATE OF 50% ON SOIL COMPACTOR JCB EXCAVATOR AND MOTOR GRADER BY TREATING THEM AS COMMERCIAL VEHICLE WHI CH WAS RESTRICTED TO 15% BY THE AO. (II) DURING APPELLATE PROCEEDINGS THE APPELLATE PL ACED RELIANCE ON THE DEFINITION OF COMMERCIAL VEHICLE AS GIVEN IN NEW APPENDIX-I RELATING TO RATES OF DEPRECIATION AND JUSTIFY ITS C LAIM OF DEPRECIATION @ 50% THEREOF. (III) I HAVE DULY CONSIDERED THE ASSESSMENT ORDER SUBMISSIONS OF THE APPELLANT AND THE MATERIAL PLACED ON RECORD. IT IS NOTED FROM ITEM III SUB ITEM (1) OF THE NEW APPENDIX-I THAT DEPRECI ATION ON MACHINERY AND OTHER PLANT OTHER THAN THOSE COVERED BY SUB IT EMS (2) (3) AND (8) IS PROVIDED AT 15%. THE HIGHER RATE OF DEPRECIATION @ 50% IS PROVIDED IN CLAUSE (VIA) OF SUB ITEM (3) FOR NEW COMMERCIAL VEHICLES WHICH ARE ACQUIRED ON OR AFTER THE 1 ST DAY OF JANUARY 2009 BUT BEFORE THE 1 ST DAY OF OCTOBER 2009 AND IS PUT TO USE BEFORE THE 1 ST DAY OF OCTOBER 2009 FOR THE PURPOSES OF BUSINESS OR PROFESSION. FURTHER AS PER PARAGRAPH 6 OF THE NOTES BELOW NEW APPENDIX-I COMMERCIAL VEHIC LE MEANS HEAVY GOODS VEHICLE HEAVY PASSENGER MOTOR VEHIC LE LIGHT MOTOR VEHICLE MEDIUM GOODS VEHICLE AND MEDIUM PASSEN GER MOTOR VEHICLE BUT DOES NOT INCLUDE MAXI-CAB MOTOR-CA B TRACTOR AND ROAD-ROLLER. THE EXPRESSIONS HEAVY GOODS VEHICL E HEAVY PASSENGER MOTOR VEHICLE LIGHT MOTOR VEHICLE M EDIUM GOODS VEHICLE AND MEDIUM PASSENGER MOTOR VEHICLE MAX I-CAB MOTOR- CAB TRACTOR AND ROAD-ROLLER SHALL HAVE THE ME ANINGS RESPECTIVELY ASSIGNED TO THEM IN SECTION 2 OF THE MOTOR VEHICLES ACT 1988 (59 OF 1988). (IV) IT IS NOTED FROM MOTOR VEHICLES ACT THAT HEAV Y GOODS VEHICLE HAS BEEN DEFINED IN CLAUSE (16) AS HEAVY GOODS VEH ICLE MEANS ANY GOODS CARRIAGE THE GROSS VEHICLE WEIGHT OF WHICH O R A TRACTOR OR A ROAD-ROLLER THE UNLADEN WEIGHT OF EITHER OF WHICH EXCEEDS 12 000 5 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL KILOGRAMS. FURTHER AS PER MOTOR VEHICLE ACT MEDI UM GOODS VEHICLE MEANS ANY GOODS CARRIAGE OTHER THAN A LIGHT MOTOR V EHICLE OR HEAVY MOTOR VEHICLE. FURTHER GOODS CARRIAGE HAS BEEN DE FINED IN CLAUSE (14) AS GOODS CARRIAGE MEANS ANY MOTOR VEHICLE CONSTRU CTED OR ADAPTED FOR USE SOLELY FOR THE CARRIAGE OF GOODS OR ANY MO TOR VEHICLE NOT SO CONSTRUCTED OR ADAPTED WHEN USED FOR THE CARRIAGE O F GOODS. THEREFORE FOR A VEHICLE TO BE A COMMERCIAL ONE IT HAS TO BE USED AS GOODS CARRIAGE. IN THE INSTANT CASE UNDER CONSID ERATION NONE OF THE ITEM UNDER CONSIDERATION I.E. SOIL COMPACTOR JCB E XCAVATOR AND MOTOR GRADER CAN BE USED SOLELY FOR THE CARRIAGE OF GOODS . (V) IT IS PERTINENT TO MENTION HERE THAT AS PER SEC TION 65 OF THE MOTOR VEHICLES ACT THE POWERS WERE GIVEN TO THE ST ATE GOVERNMENTS TO MAKE RULES. THE RELEVANT EXTRACTS OF SECTION 65 ARE REPRODUCED AS UNDER :- 65. POWER OF STATE GOVERNMENT TO MAKE RULES. (1) A STATE GOVERNMENT MAY MAKE RULES FOR THE PURPOSE OF CARRYING INTO EFFECT THE PROVISIONS OF THIS CHAPTER OTHER THAN THE MATTERS SPECIFIED IN SECTION 64. (2) WITHOUT PREJUDICE TO THE GENERALITY OF THE FOREGOI NG POWER SUCH RULES MAY PROVIDE FOR (A) THE CONDUCT AND HEARING OF APPEALS THAT MAY BE PREF ERRED UNDER THIS CHAPTER (THE FEES TO BE PAID IN RESPECT OF SUCH APPEALS AND THE REFUND OF SUCH FEES); (B) THE APPOINTMENT FUNCTIONS AND JURISDICTION OF REGI STERING AND OTHER PRESCRIBED AUTHORITIES; (C) THE EXEMPTION OF ROAD-ROLLERS GRADERS AND OTHER VE HICLES DESIGNED AND USED SOLELY FOR THE CONSTRUCTION REPA IR AND CLEANING OF ROADS FROM ALL OR ANY OF THE PROVISIONS OF THIS CHAPTER AND THE RULES MADE THEREUNDER AND THE CONDI TIONS GOVERNING SUCH EXEMPTION. (VI) THUS AS PER SECTION 65 OF MOTOR VEHICLES ACT THE STATE GOVERNMENT CAN MADE RULES FOR THE EXEMPTION OF ROAD -ROLLERS GRADERS AND OTHER VEHICLES DESIGNED AND USED SOLELY FOR THE CONSTRUCTION REPAIR AND CLEANING OF ROADS FROM ALL OR ANY OF THE PROVIS IONS OF THIS CHAPTER AND THE RULES MADE THEREUNDER AND THE CONDITIONS GO VERNING SUCH EXEMPTION. THIS MAKES ROAD ROLLERS GRADERS ETC. U SED SOLELY FOR THE CONSTRUCTION OF ROADS DISTINGUISHABLE FROM THE COMM ERCIAL VEHICLES. 6 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL (VII) IT MAY BE MENTIONED THAT THE HONBLE ITAT BE NCH B BANGALORE IN ITA NO. 818/BAN G/2010 FOR ASSESSMENT YEAR : 200 6-07 IN THE CASE OF M/S. MAGTRON EARTH MOVERS MRUTYUNJAYA NAGAR RANE BENNUR HAVERI DIST VS. ITO WARD -1 HAVERI REPORTED IN 2011-TIOL- 105-ITAT-BANG HELD AS UNDER :- 8.2. ON PERUSING SECTION 32 OF THE ACT WE DO NOT FIND ANY MENTION OF THE WORD MOTOR VEHICLE. WORDS REFERRED TO ARE MOTOR CARS MOTOR BUSES MOTOR LORRIES MOTOR TAXIE S COMMERCIAL VEHICLES ETC. THE RATE ADOPTED BY THE A SSESSEE FOR CLAIMING DEPRECIATION ON JCB IS 30%. THE ACT PRESCR IBES 30% DEPRECIATION FOR MOTOR BUSES MOTOR LORRIES AND MOT OR TAXIES USED IN A BUSINESS OF RUNNING THEM ON HIRE AS PROVI DED IN (RULE 5) NEW APPENDIX-1 (EFFECTIVE FROM AY 2006-07 ONWA RDS). NOWHERE IN THE ACT OR THE RULES JCB IS MENTIONED. PART-III SUB- ITEM NO.1 OF THE TABLE SPECIFIES THAT MACHINERY AND PLANT OTHER THAN THOSE COVERED BY SUB-ITEMS (2) (3) AND (8) SH ALL BE ENTITLED TO CLAIM DEPRECIATION @ 15%. SINCE JCB DOE S NOT FALL UNDER SUB-ITEM (2) (3) & (8) OF PART-III IT HAS T O BE NECESSARILY INCLUDED IN SUB-ITEM (1) FOR WHICH THE PERMISSIBLE RATE OF DEPRECIATION IS 15%. THE ASSESSEES CONTENTION THA T JCBS ARE REGISTERED UNDER THE MOTOR VEHICLES ACT BEFORE THE RTO AND THEREFORE IT HAS GOT THE CHARACTERISTICS AS THAT OF MOTOR BUSES MOTOR LORRIES ETC. IS NOT APPRECIABLE. UNDER SECTIO N 2 OF THE MOTOR VEHICLES ACT THERE ARE DISTINCT DEFINITIONS FOR MOTOR CAR CONTRACT CARRIAGE GOODS CARRIAGE HEAVY GOODS VEHI CLE HEAVY PASSENGER MOTOR VEHICLE LIGHT MOTOR VEHICLE MOTOR CYCLE ETC. AND LAST BUT NOT THE LEAST MOTOR VEHICLE. THE GE NERAL DEFINITION OF MOTOR VEHICLE AS PER SECTION 2(28) OF THE MOTOR VEHICLES ACT 1988 CANNOT BE FITTED INTO THE INCOME TAX ACT. TH IS DEFINITION IS AN EXTENSIVE DEFINITION WHICH INCLUDES ALL KINDS OF MECHANICALLY PROPELLED VEHICLES INCLUDING A TRAILER . THE SCOPE OF THE MOTOR VEHICLES ACT IS TO BRING INTO ITS FOLD AL L KINDS OF MOVING OBJECTS PLYING ON THE ROADS UNDER ITS AMBIT SO AS T O PROVIDE SAFETY MEASURES AND REGULATE TRAFFIC. THEREFORE AN Y OBJECTS WHICH MOVES ON THE ROAD BY ITSELF SUCH AS HARVESTIN G COMBINES ROAD LAYERS CRANES ON WHEELS ETC. REQUIRES REGIST RATION UNDER THE MOTOR VEHICLES ACT. HOWEVER WHILE CLAIMING DEP RECIATION UNDER THE INCOME-TAX ACT ONLY THE RELEVANT PROVISI ONS OF THE INCOME-TAX ACT HAS TO BE APPLIED. 9. IN AN OVERALL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE ISSUE AND ALS O THE RELEVANT FACTS WHICH HAVE BEEN DELIBERATED UPON IN THE FORE- GOING PARAGRAPHS WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW WERE JUSTIFIED IN RESTRICTING THE ALLOWABILIT Y OF DEPRECIATION 7 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL AT 15% IN RESPECT OF JCB EARTH MOVERS. IT IS ORDERE D ACCORDINGLY. (VIII) IT MAY BE MENTIONED THAT THE HONBLE ITAT IN THE ABOVE REFERRED DECISION ANALYZED THE ISSUE IN DETAIL AND CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS. FURTHER AS PER RAJASTHAN ENTRY TAX THE ENTRY TAX ON EARTH MOVING AND MINING MACHINERY INCL UDING HYDRAULIC EXCAVATOR HYDRAULIC DUMPER TIPPER HEAVY LOADER BACKHOE LOADER WHEEL LOADING SHOVEL WHEEL EXCAVATOR TRACKED EXCA VATOR COMPACTOR MOBILE CRANE ROAD ROLLER DOZER GRADER SKID STEE R AND PARTS THEREOF IS 5% AND TYRES TUBES AND FLAPS OF TWO WHEELER THREE WHEELER AND FOUR WHEELER MOTOR VEHICLES MOTOR VEHICLES WITH MORE TH AN FOUR WHEELS OR JEEP TRAILERS IS 4% I.E. ENTRY TAX ON EARTH MOVING MACHINERY IS HIGHER THAN MOTOR VEHICLES. THUS A DISTINCTION IS MADE BE TWEEN EARTH MOVING MACHINERY AND MOTOR VEHICLES. (IX) THEREFORE IN VIEW OF THE ABOVE DISCUSSION IT IS HELD THAT THE JCB EXCAVATOR MOTOR GRADER AND THE SOIL COMPACTOR USED IN THE BUSINESS OF ROAD CONSTRUCTION EXCLUSIVELY ARE NOT C OMMERCIAL VEHICLES AND THUS THE AO WAS JUSTIFIED IN RESTRICTING THE DE PRECIATION TO 15%. THEREFORE THE ADDITION OF RS. 30 52 875/- MADE BY THE AO ON ACCOUNT OF EXCESS DEPRECIATION IS HEREBY SUSTAINED. (X) IT IS OBSERVED THAT SOIL COMPACTOR MOTOR GRADE R AND JCB EXCAVATOR WERE PURCHASED BY THE APPELLANT DURING TH E FY 2008-09 RELEVANT TO AY 2009-10 AND IT APPEARS THAT IN THAT YEAR THE DEPRECIATION WAS ALLOWED @ 50% AS CLAIMED BY THE AP PELLANT. THE AO IT THEREFORE DIRECTED U/S 150(1) OF THE ACT TO EXAM INE THE ISSUE UNDER CONSIDERATION FOR THE AY 2009-10 IF NOT ALREADY DO NE AND TAKE APPROPRIATE ACTION U/S 148 OF THE ACT. THE AO IS A LSO DIRECTED TO WORK OUT CORRECT DEPRECIATION FOR THE YEAR UNDER CONSIDE RATION BY MODIFYING THE WDV OF THESE THREE ITEMS AS ON 01.04.2009 ACCOR DINGLY. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAKESH JAIN (2013) 350 ITR 230 (P&H) WHILE DECIDING THE ISSUE OF DEPR ECIATION ON TIPPERS VIBRATOR AND VIBRATOR SOIL COMPACTOR HAS HELD THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATION @ 40%. THE HONBLE HIGH COURT HAS FOLLOWED THE JUDGM ENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MAHALINGA SETTY & CO. (1992) 195 ITR 526 (KAR.). FURTHER THE LD. COUNSEL HAS PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE KERALA 8 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL HIGH COURT RENDERED IN THE CASE OF CIT VS. GALORD C ONSTRUCTIONS (2010) 190 TAXMAN 406 (KERALA). THE HONBLE HIGH COURT IN PARA 3 OF ITS ORDER HAS DECIDED THE ISSUE BY UPHOLDING THE DECISION OF THE TRIBUNAL AS UNDER :- 3. ADMITTEDLY JCB WHICH IS USED ON ROAD IS REGISTE RED AS A MOTOR VEHICLE. THOUGH IT IS NOT USED AS A TRANSPORT VEHIC LE JCB IS A FOUR- WHEELED EXCAVATOR-CUM-TRANSPORT VEHICLE USED FOR EX CAVATION OF EARTH AND MOVEMENT OF THE SAME THOUGH FOR LIMITED DISTAN CES. EVEN THOUGH THE PURPOSE OF MOTOR LORRY WHICH IS A HEAVY MOTOR V EHICLE USED FOR TRANSPORT OF GOODS FROM PLACE TO PLACE CANNOT BE S ERVED BY A JCB WE ARE OF THE VIEW THAT THE EXPRESSION MOTOR LORRY C OVERED BY THE ABOVE ENTRY OF THE IT RULES PROVIDING FOR HIGHER RATE OF DEPRECIATION HAS A WIDE MEANING. JCB THOUGH BASICALLY IS USED FOR EXCA VATION OF SOIL IT IS A HEAVY VEHICLE ALSO USED FOR TRANSPORT OF EXCAVATE D SOIL SAND OR OTHER GOODS FOR A LIMITED DISTANCE AND THE MACHINE IS AL SO USED TO LEVEL AND SHAPE THE LAND. THEREFORE IT SERVES AS A TRANSPORT EQUIPMENT AS WELL AND SO LONG AS IT IS REGISTERED UNDER THE MOTOR VEH ICLES ACT IT IS A MOTOR VEHICLE WITHIN THE MEANING OF THE SAID TERM A S HELD BY THE SUPREME COURT IN THE DECISION ABOVE REFERRED. WE THEREFORE FEEL THAT IN A LARGER SENSE JCB ANSWERS THE DEPRECIATION OF M OTOR LORRY WITHIN THE MEANING OF THE ENTRY REFERRED ABOVE CONTAINED I N THE IT RULES. THERE IS NO DISPUTE THAT THE ITEM IS NOT LET ON HIR E BY THE ASSESSEE WHICH IS ONE OF THE ITEMS OF BUSINESS CARRIED ON BY THEM. THE ARGUMENT OF SENIOR STANDING COUNSEL THAT THE CASE D ECIDED BY THE GUJARAT HIGH COURT IS ON DIFFERENT FACTS APPEARS T O BE TRUE BECAUSE THERE THE CRANE IN THAT CASE IS MOUNTED ON THE TRUC K AND THE TRUCK IS ADMITTEDLY ENTITLED TO DEPRECIATION AT 40 PER CENT. WHEN THE CRANE MOUNTED ON THE TRUCK THE CRANE BECOMES MOBILE AND WHEN BOTH ARE LET OUT ON HIRE AS A MOBILE CRANE THE VALUE OF THE CRANE ALSO BECOMES PART OF THE MOTOR LORRY ENTITLING FOR DEPRECIATION ON THE COMBINED VALUE. EVEN THOUGH THE FACTS IN THE GUJARAT DECISIO N ARE DIFFERENT WE STILL FEEL THE PRINCIPLE APPLIED BY THE GUJARAT HIG H COURT IS APPLICABLE IN THIS CASE ALSO BECAUSE IN THIS CASE JCB ITSELF IS FUNCTIONALLY AND OPERATIONALLY USED AS MOTOR VEHICLE FOR TRANSPORT O F GOODS WITHIN LIMITED DISTANCES. WE THEREFORE UPHOLD THE VIEW OF THE TRIBUNAL THAT JCB IS ENTITLED TO HIGHER RATE OF DEPRECIATION CLAI MED BY THE ASSESSEE. IN THE CIRCUMSTANCES THE APPEAL IS DISMISSED. ON THE CONTRARY THE LD. D/R PLACED RELIANCE ON THE DECISION OF COORDINATE BENCH IN THE CASE OF M/S. MAGTRON EARTH MOVERS VS. ITO IN I TA NO. 818/BANG./2010 WHO 9 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL AFTER CONSIDERING THE VARIOUS CASE LAWS HELD THAT T HE ASSESSEE WAS ENTITLED FOR DEPRECIATION @ 15% IN RESPECT OF JCB EARTH MOVERS. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. GOTAN LIME STONE & OTHERS 299 ITR 368 (RAJ.) HAS EXAMINED THE AVAILABILITY OF INVESTMENT ALLOWANCE O N DUMPERS AND LOADERS. THE HONBLE HIGH COURT HELD THAT THE ISSUE IS COVERED B Y THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. SHAAN FINANCE PVT. LTD . 231 ITR 308 (SC) AND THE HONBLE COURT HELD THAT : ..THE CONSTRUCTION EQUIPMENT VEHICLES LIKE DUMPE RS TIPPERS AND HYDRAULIC EXCAVATORS ARE NOT ROAD TRANSPORT VEHICLE S AND PROFIT GAINED OUT OF IT BY LETTING OUT THEM ON HIRE BASIS TO CEME NT PRODUCER INDUSTRIAL UNDERTAKING CANNOT DEBAR THEM FROM CLAIMING INVESTM ENT ALLOWANCE UNDER SECTION 32A OF THE ACT. FROM THE ABOVE JUDGMENT OF THE HONBLE JURISDICTION AL HIGH COURT IT CAN BE SAFELY INFERRED THAT THE HONBLE HIGH COURT HAS DECIDED TH E ISSUE OF ALLOWABILITY OF THE INVESTMENT ALLOWANCE. THE ISSUE OF DEPRECIATION WA S NOT BEFORE THE HONBLE COURT. THE CONTENTION OF THE LD. D/R IS THAT SINCE THE JCB EXCAVATOR SOIL COMPACTOR AND TATA MOTOR GRADER ARE USED IN THE CONSTRUCTION THE REFORE IN THE LIGHT OF THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF GOTTON LIME STONE & OTHERS (SUPRA) DEPRECIATION WOULD NOT BE AVAILABLE . SINCE THE HONBLE HIGH COURT HAS NOT DECIDED THE ISSUE OF ENTITLEMENT OF THE DEP RECIATION AT A HIGHER RATE AS CLAIMED BY THE ASSESSEE THE ISSUE OF ALLOWABILITY OF DEPRECIATION ON JCB AND OTHER EQUIPMENTS HAS BEEN DECIDED BY THE HONBLE KERALA H IGH COURT IN THE CASE OF CIT VS. GALORD CONSTRUCTIONS (SUPRA) AND THE DECISION O F THE COORDINATE BENCH IN THE CASE OF CIT VS. SYEED IQBAL (SUPRA) IT CAN BE SAFE LY INFERRED THAT TWO VIEWS HAVE BEEN EXPRESSED BY THE DIFFERENT HIGH COURTS AND THE COORDINATE BENCHES. IT IS 10 ITA NO. 469/JP/2016 SHRI RADHA KRISHAN BENIWAL SETTLED POSITION OF LAW BY THE JUDGMENT OF HONBLE SUPREME COURT RENDERED IN THE CASE OF VEGETABLE PRODUCTS LTD. 88 ITR 192 (SC) THA T IF THERE ARE TWO VIEWS POSSIBLE THEN THE VIEW WHICH FAVOURS THE ASSESSEE HAS TO BE ADOPTED. RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE APEX COURT WE HEREBY DIRE CT THE AO TO ALLOW THE DEPRECIATION @ 50%. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/09 /2016. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/09/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RADHA KRISHAN BENIWAL JAIP UR. 2. THE RESPONDENT THE ACIT CIRCLE-3 JAIPUR. 3. THE CIT(A). 4. THE CIT 5. THE DR ITAT JAIPUR 6. GUARD FILE (ITA NO. 469/JP/2016) VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASSISTANT. REGISTRAR