Depreciation on JCB earth movers limited to plant and machinery rate; not treated as motor lorries for tax purposes.

JCB earth movers registered as hydraulic excavators and earth moving machinery were held not to be motor lorries for depreciation purposes. The Tribunal found that their principal function is excavation, not carriage of goods on roads, and that transport-law definitions of motor vehicle do not control the depreciation scheme under the Income-tax Act. Accordingly, the higher depreciation claim at 30% was rejected and depreciation at 15% as plant and machinery was upheld.

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Issues: Whether JCB earth movers were entitled to depreciation at 30% as motor lorries or were correctly restricted to 15% as plant and machinery.

Analysis: The Tribunal examined the registration records and found that the vehicles were registered as hydraulic excavators and earth moving machinery, not as heavy motor vehicles. It held that the principal function of a JCB is excavation of soil and earth, not carriage of goods on roads like motor lorries or motor trucks. The Tribunal distinguished the authorities relied upon by the assessee, noting that the higher depreciation cases involved vehicles registered as heavy motor vehicles or turned on different statutory contexts. It further held that the wider definition of motor vehicle under transport law could not control the specific depreciation scheme under the Income-tax Act, where JCB machines fall within the residual category of machinery and plant.

Conclusion: The claim for depreciation at 30% was rejected and depreciation at 15% was upheld.

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