Commercial vehicle depreciation applies to road-construction equipment when competing interpretations favour the assessee.

Higher depreciation for road-construction equipment depended on whether a JCB excavator, motor grader and soil compactor used exclusively in road work could be treated as commercial vehicles under the depreciation schedule. The Tribunal noted conflicting judicial views: some authorities treated such machinery as plant and machinery eligible only for the normal rate, while others treated it as motor lorries or commercial vehicles for tax depreciation purposes. Applying the interpretive rule that a view favourable to the assessee should be adopted where two views are possible, it preferred the higher-depreciation interpretation and allowed depreciation at 50% on the equipment.

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Issues: Whether JCB Excavator, Tata Motor Grader and Soil Compactor used exclusively in road construction were eligible for depreciation at the higher rate as commercial vehicles.

Analysis: The claim for higher depreciation turned on whether the equipment fell within the expression "commercial vehicle" in the depreciation schedule. The Tribunal noted conflicting judicial views on whether such construction machinery, though registered under the Motor Vehicles Act, could be treated as motor lorries or commercial vehicles for the purposes of the Income-tax Rules. It also noted that some authorities had treated such equipment as plant and machinery eligible only for the normal rate, while other decisions had allowed the higher rate. Applying the principle that where two views are possible the one favourable to the assessee should be adopted, the Tribunal preferred the view supporting higher depreciation.

Conclusion: The assessee was entitled to depreciation at 50% on the JCB Excavator, Tata Motor Grader and Soil Compactor.

Ratio Decidendi: Where conflicting views exist on the depreciation eligibility of construction equipment, the interpretation favourable to the assessee must be adopted if the equipment is used as a commercial vehicle within the meaning of the relevant depreciation entry.

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