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of <h1>Tribunal affirms depreciation on air compressor & investment allowance on trak-shovel for construction activities</h1> The Tribunal upheld the depreciation at 30% on the air compressor, considering it essential for earth-moving activities in dam construction, falling under ... - Issues:Depreciation on air-compressor at 30% of WDV.Investment allowance on trak-shovel.Depreciation on air-compressor:The assessee claimed 30% depreciation on the air compressor used in heavy construction works like dams, arguing it was earth-moving machinery. The ITO disagreed, allowing only 15% depreciation, stating air compressors were not used for digging or moving earth. The CIT(A) allowed 30% depreciation, considering the air compressor's role in blasting hard earth. The Tribunal upheld the CIT(A)'s decision, emphasizing that the air compressor was essential for earth-moving activities in dam construction, falling under the category of earth-moving machinery. The Department's argument that the air compressor was not earth-moving machinery was rejected.Investment allowance on trak-shovel:The ITO denied investment allowance on a trak-shovel used in construction, considering it a road transport vehicle under the Motor Vehicles Act. The CIT(A) allowed the investment allowance, highlighting the trak-shovel's primary function of earth excavation. The Department argued that the trak-shovel was a road transport vehicle, citing precedents related to dumpers. The Tribunal analyzed the trak-shovel's purpose and usage, concluding it was not a road transport vehicle but an earth-moving equipment, eligible for investment allowance. The Tribunal differentiated the trak-shovel from dumpers based on its functionality and design, rejecting the Department's argument. The Tribunal confirmed the CIT(A)'s decision to allow investment allowance on the trak-shovel.In conclusion, the Tribunal dismissed the appeals, upholding the depreciation at 30% on the air compressor and allowing the investment allowance on the trak-shovel used for construction activities.
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