Higher depreciation on truck-mounted cranes allowed where they function as motor lorries in a hiring business.

ITAT Surat held that mobile or truck-mounted cranes used in a hiring business qualify for higher depreciation at 30% as motor lorries under section 32 read with rule 5 and Appendix I, rather than ordinary machinery at 15%. The tribunal followed jurisdictional High Court guidance that Motor Vehicles Act registration is not a necessary condition for the higher rate and that cranes mounted on trucks should not be denied the applicable schedule entry merely because they are not separately listed. Consistent treatment on identical facts also supported the same depreciation claim in later years, so the Revenue's disallowance was deleted.

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Issues: Whether the assessee was entitled to claim higher depreciation at 30% on cranes used in its business, or whether the cranes were to be treated as machinery eligible only for depreciation at 15%.

Analysis: The depreciation claim was examined with reference to section 32 of the Income-tax Act, 1961 and the rates prescribed under rule 5 and Appendix I of the Income-tax Rules, 1962. The governing principle applied was that mobile or truck-mounted cranes used in the business of hiring can fall within the expression "motor lorries" for the purpose of higher depreciation. The jurisdictional High Court decisions relied upon held that registration under the Motor Vehicles Act is not a sine qua non for the claim, that cranes mounted on trucks are not to be reduced to ordinary machinery merely because they are not separately listed, and that consistent treatment on identical facts supports the same view in later years.

Conclusion: The assessee was entitled to higher depreciation at 30% on the cranes, and the Revenue's challenge to the deletion of the disallowance failed.

Ratio Decidendi: A truck-mounted or mobile crane used in a business of hiring is entitled to higher depreciation as a motor lorry under the prescribed depreciation schedule, and registration under the Motor Vehicles Act is not indispensable for that claim.

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