TaxTMI 
TaxTMI 
2010 (7) TMI 652
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....les. The assessee claimed depreciation @ 30% in respect of TATA, JCB & 400V Wheel Loaders which are used to load and unload goods which are not grouped or blocked together with assets like lorry , taxi, bus or commercial vehicles within the meaning of section 32(2) of the I. T. Act, 1961 read with section 2 of Motor Vehicles Act, 1988 and the same was accepted by the AO. Subsequently, the Ld. CIT initiated 263 proceedings. According to him, the depreciation claimed @ 30% in excess of 15% should have been disallowed and added back by the AO as the same was allowed without any examination. Hence, according to the Ld. CIT, the order passed by the AO is erroneous and prejudicial to the interest of the revenue and he directed the AO to disallow ....
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....mited within short distances. The manufactures have certified that pay loaders are earth moving vehicles. It was submitted that pay loaders are akin to motor vehicles as they are fitted with diesel engines, hydraulic brakes and pneumatic tyres and are registered with the RTO; as such, they squarely fall within the meaning of "motor vehicles" as prescribed in the provision of s. 2(28) of the Motor Vehicles Act 1988. He vehemently argued that "motor lorry" appearing in entry no. III(3)(ii) of Part A of Appendix I of the Income Tax Rules, 1962 would mean not only any motor vehicle designed to carry freight or goods but also to perform special services. It is reiterated that these are not used as transport vehicles but they are used in excavati....
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....stered as a heavy motor vehicle clearly fell within the expression of "motor lorries". He further contended that as the conditions precedent are satisfied, the pay loaders are entitled to special depreciation as provided for "motor lorries" appearing in entry no. III(3)(ii) of Part A of Appendix I of the Income Tax Rules, 1962. It was submitted that a mobile crane or an excavator which is registered as a heavy motor vehicle with the RTO would clearly fall within the expression "motor lorries" in entry IIIE(1A) of Table in Appendix I under Rule 5 of the Income Tax Rules, 1962 since it is used in the business of running on hire and as such entitled to depreciation @ 30% and the Ld. CIT was patently wrong to restrict the allowance @ 15% which ....
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....he assessee firm is carrying on a business of, inter alia, leasing out Earth Moving Vehicles. In the return filed the assessee claimed depreciation, at page no 78 of the paper book, on Tata Loaders in the sum of Rs. 20,41,096/-, on JCB loaders amounting to Rs. 39,50,070/- and on Daewoo 400V Wheel loaders of Rs. 18,14,095/- aggregating to Rs. 78,05,261/- applying the rate of 30% available in case of "motor lorries" under entry no. III(3)(ii) of Part A of Appendix I of the Income Tax Rules, 1962. We also find from the profit and loss account, at page 95 of the paper book, that the assessee has disclosed income from "Commercial Vehicles/ Other equipments/ Auto Bagging & Standardisation work" in the sum of Rs. 3,51,43,929/- which was duly consi....
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....t. We are of the considered opinion that a pay loader is akin to a motor vehicle and is registered with the RTO as a heavy or medium motor vehicles and therefore, they squarely fall within the meaning of "motor vehicles" as prescribed in the provision of s. 2(28) of the Motor Vehicles Act 1988.. Therefore the approach of the AO was correct in law in allowing depreciation at the rate of 30% on these pay loaders The mobile crane and excavators which were registered as heavy or medium motor vehicles clearly fell within the scope of the expression of "motor lorries". Therefore, in our considered view, the impugned direction of the Ld. CIT that the Tata, JCB, 400V wheel Loaders are entitled to depreciation @ 15% is based entirely on wrong premis....