Depreciation on workover rigs treated as motor lorries; binding precedent and favourable interpretation supported the higher rate.

Workover rigs registered as heavy goods vehicles were treated as motor lorries for depreciation purposes because the classification had to be read in context with the Motor Vehicles Act and the depreciation schedule. The jurisdictional High Court precedent treating a mobile crane registered as a heavy motor vehicle as falling within motor lorries was followed, and the contrary views of other High Courts did not override that binding authority. Applying the view favourable to the assessee where two interpretations were possible, higher depreciation at 40% was allowed.

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Issues: Whether the assessee was entitled to higher depreciation at 40% on workover rigs treated as heavy goods vehicles or motor lorries under the depreciation schedule.

Analysis: The rigs were registered with the transport authority as heavy goods vehicles and were designed for mobile, specialised services. The relevant depreciation provision, read with the Motor Vehicles Act, required the vehicle classification to be understood in context. The jurisdictional High Court decision treating a mobile crane registered as a heavy motor vehicle as falling within motor lorries was applied. The contrary view of other High Courts did not displace the binding jurisdictional precedent, and where two views were possible the one favourable to the assessee was preferred.

Conclusion: The assessee was entitled to higher depreciation at 40% on the workover rigs.

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