Higher depreciation for hire vehicles extends to crawler cranes and dozers treated as motor vehicles despite no registration requirement.

Crawler cranes and dozers used in a hire business were treated as eligible for higher depreciation as motor vehicles rather than as plant and machinery. The decisive factor was their functional character: they were mechanically propelled, capable of self-movement, and comparable in use to transport vehicles. The Tribunal also noted that registration under the Motor Vehicles Act was not a condition precedent for depreciation under the Income-tax Act. On that basis, the higher depreciation claim was accepted and the disallowance was held unsustainable.

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Issues: Whether crawler cranes and dozers used by the assessee in its hire business were entitled to higher depreciation as motor vehicles and not as plant and machinery.

Analysis: The depreciation schedule under the Income-tax Rules allows higher depreciation for motor buses, motor lorries and motor taxies used in the business of running them on hire. The relevant inquiry was the nature and use of the assets. The assets in question were found to be mechanically propelled, capable of moving on their own accord, and functionally comparable to motor vehicles used in transport operations. The definition of motor vehicle in the Motor Vehicles Act, 1988 was relied upon to hold that registration under that Act was not a condition precedent for claiming depreciation under the Income-tax Act. The Tribunal also relied on earlier decisions in the assessee's own case and other precedents supporting treatment of such equipment as motor vehicles for depreciation purposes.

Conclusion: Crawler cranes and dozers were held entitled to higher depreciation at the applicable rate for motor vehicles used on hire, and the disallowance was unsustainable.

Ratio Decidendi: For depreciation under the Income-tax Act, the decisive factor is whether the asset is a mechanically propelled vehicle adapted for use on roads and functionally answers the description of a motor vehicle; permanent registration under the Motor Vehicles Act is not a prerequisite for higher depreciation.

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