TaxTMI 
TaxTMI 
2012 (5) TMI 7
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.... an income of Rs. 6,42,330 on 31.10.2007. The return was processed under Section 143(1) of the Act and subsequently, it was selected for scrutiny. Accordingly, statutory notices along with detailed questionnaire was issued to the assessee-respondent. In response to the aforesaid notices, the assessee through its authorized Chartered Accountant attended the proceedings and filed reply to the questionnaire and along with other information. 3. The assessee-respondent derives income from civil construction and contract work and these items are considered as part of machinery on which depreciation is allowable at the rate of 15% only. Accordingly, the Assessing Officer allowed the depreciation at the rate of 15% under Section 42(1)(ii) Explanation II unnumbered proviso 3. The view of the Assessing Officer is discernible from a perusal of paras 4.2 and 5 which are as under: "4.2 As regards assessee's argument that the Vibrator/Soil Compactor is not a roller, same is not acceptable. As per the brochure of the company "Dynapac" filed during the course of proceedings, the Vibrator/ Soil Compactor has been categorized under the 'Road Roller' equipment and the named as Vibratory....
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.... considered their submissions including the authorities referred to by them. The order of the Ld. CIT(A) with regard to depreciation is in two parts. In first part he directed the AO to allow depreciation @ 40% as against 15% allowed by the Ld. CIT(A) on the three aforesaid three items. In the second part of his order, he has held that the assessee is eligible to additional depreciation. We shall now deal with both the aspects as they have been specifically challenged by the Department. 8. Apropos the dispute as to whether the assessee is entitled to depreciation at the rate of 40% on Tippers, Vibrator and Vibrator Soil Compactor, the issue is whether they are in the nature of commercial vehicles. The assessee is entitled to claim depreciation at the rate of 40% on commercial vehicles. The word "commercial vehicles" includes within its ambit all the vehicles which fall in the category of commercial vehicles. The Ld. CIT(A) has given detailed justification for treating the Tipper, Vibrator and Vibrator Soil Compactor a commercial vehicles. We are in agreement with his reasoning and decision in the matter. Similar view has been taken by other Benches of this Tribunal and also by the....
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....llowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42 :] [Provided further that where an asset referred to in clause (i) or clause (ii) 1 [or clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) 1[or clause (iia)], as the case may be [Provided also that where an asset being commercial vehicle is acquired by the assessee on or after the 1st day of October, 1998 but before the 1st day of April, 1999 and is put to use before the 1st day of April, 1999 for the purposes of business or profession, the deduction in respect of such asset shall be allowed on such percentage on the written down value thereof as may be prescribed. Explanation.-For the purposes of this proviso,- (a) the expression "commercial vehicle" means "heavy goods vehicle", "heavy pas....
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....rform the assessee's part of the work. The contention of the Revenue is that these dumpers and tippers are not used in the manufacture of any article and, therefore, the provisions of Section 32A are not at all attracted. Under Section 32A, investment allowance is granted, inter alia, in respect of machinery or plant specified in sub-Section (2) which is owned by the assessee and is wholly used for the purpose of business carried on by the assessee. The second proviso to Section 32A (1) states that no deduction shall be allowed in respect of certain machinery or plant installed in the office premises or in respect of road transport vehicles, etc. Sub-Section (2) of Section 32A was strongly relied upon by learned counsel for the Revenue to contend that the machinery which is eligible for the investment allowance is machinery which produces an article. In other word, the machinery should be directly employed to produce an end product. It was contended that the machinery used just to lift earth and transport the same would not be the machinery contemplated by sub-Section (2) which creates the eligibility for investment allowance. Learned counsel referred to sub-Clause (iii) of cla....