Court affirms JCB as "motor lorry" for depreciation at 40% rate under Income-tax Rules

The Court upheld the Tribunal's decision allowing the assessee's claim for depreciation of a JCB earth moving equipment at a rate of 40%, considering it as a "motor lorry" eligible for higher depreciation under the Income-tax Rules. The Court agreed that the JCB, being a registered motor vehicle used for excavation and transport of goods, falls within the category of "motor lorries" for depreciation purposes, emphasizing that registration under the Motor Vehicles Act qualifies a vehicle as a motor vehicle. The appeal filed by the Department was dismissed.

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Issues involved: Interpretation of the term "Motor Lorries" for the purpose of depreciation under the Income-tax Rules.

Summary:
The Department appealed against the Tribunal's decision to allow the assessee's claim for depreciation of earth moving equipment, specifically a JCB, at a rate of 40%. The Assessing Officer had granted depreciation at 25%, arguing that a JCB does not fall under the category of "Motor Buses, Motor Lorries, Motor Taxis" eligible for the higher rate. The Tribunal, citing relevant case laws, held that JCB, being a registered motor vehicle used for excavation and transport of goods, qualifies as a "motor lorry" under the Income-tax Rules. The Tribunal's decision was based on the broad interpretation of the term "motor lorry" to include vehicles used for both transport and excavation purposes. The Court agreed with the Tribunal's reasoning, emphasizing that as long as a vehicle is registered under the Motor Vehicles Act, it qualifies as a motor vehicle for depreciation purposes. The Court found that the principle applied by the Gujarat High Court in a similar case was applicable here, as the JCB was functionally used as a motor vehicle for transporting goods over limited distances. Consequently, the Court upheld the Tribunal's decision, dismissing the appeal filed by the Department.

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