TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 742
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....ppeals. 3. The common issue raised in these appeals is that the ld.CIT(A) erred in not appreciating the fact that the equipment i.e. payloaders, JCBs and 400V loaders can be classified as plant and machinery for the purpose of depreciation and not as motor bus, motor lorry or any transport/goods vehicle. As such the Revenue is aggrieved that the ld. CIT(A) has erred in allowing the depreciation @40% in A.Yr. 2004-05 and 2005-06 and 30% for A.Yr. 2006-07 and 2007-08 as against depreciation allowed by the AO. On merits it is also urged by the Revenue that ITAT Kolkata Bench, order which is the basis for Ld.CIT(A) order has been appealed against in the Hon'ble Calcutta High Court by the department. 4. We have heard both the counsel and perused the records. We find that the issue is squarely covered in favour of the assessee by the decision of ITAT, Kolkata Bench in assessee's own case for A.Yr.2006-07 vide order dated 16th July, 2010. The Tribunal had held as under:- "5. After a careful analysis of the arguments advanced by both the parties and on perusal of the materials available on record in light of the case laws cited by the ld.Counsel of the assessee, we find that the....
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....d therefore, they squarely fall within the meaning of "motor vehicles" as prescribed in the provision of section 2(28) of the Motor Vehicles Act 1988. Therefore the approach of the Assessing officer was correct in law in allowing depreciation at the rate of 30 per cent 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 at the rate of 15 per cent is based entirely on wrong premises and assumptions. We find that the only authority empowered to register such vehicles is the RTO and the vehicles were registered as heavy or medium motor vehicles within the meaning of "motor vehicle" as assigned in section 2(28) of the Motor Vehicles Act 1988. In the instant case, the Tata, JCB 400V wheel loaders are used in the business of giving them on hire which are registered as heavy or medium motor vehicles with the RTO and as such are entitled to special depreciation as provided for "motor lorries" appearing in entry No.III(3)(ii) of....
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....ble Kerala High Court in the case of case of CIT vs Gaylord Constructions 190 Taxman 406 (Ker) and by the Honb'le Gujarat High Court in the case of Gujco Carriers vs CIT 122 Taxman 206 (Guj). We find that the Hon'ble Kerala High Court in the case of CIT vs Gaylord Constructions (supra) has held as under:- "The question raised in the appeal filed by the Department is whether the Tribunal was justified in upholding the assessee's claim for depreciation of earth moving equipment, namely, JCB at the rate of 40 percent which rate is provided for "Motor Buses, Motor Lorries, Motor Taxis" used in the business of running them on hire. The Assessing officer took the view that earth moving equipment, popularly known as JCB, is not Motor Buses, or Motor Lorries or Motor Taxis, eligible for depreciation at the higher rate of 40 per cent. Therefore, he granted depreciation to the assessee at 25 per cent. 2. Senior standing counsel appearing for the appellant supported the case of the Assessing officer and contended that the items covered by the above entry are only motor vehicles used for carriage of goods or passengers and since JCB is only an excavator-cum-earth moving equipment....
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....he facts in the Gujarat decision are different, we still feel the principle applied by the Gujarat High Court is applicable in this case also, because in this case JCB itself is functionally and operationally used as motor vehicle for transport of goods within limited distances. We therefore uphold the view of the Tribunal that JCB is entitled to higher rate of depreciation claimed by the assessee. In the circumstances, the appeal is dismissed." 4.2. We further find that Hon'ble Gujarat High Court in the case of Gujco Carriers vs CIT supra has held as under:- Head notes "Lorry" or "truck" would mean not only any motor vehicle designed to carry freight or goods but also to perform special services like fire fighting. Fire engine, also called fire-truck, is a self-propelled mobile piece of equipment used in fire fighting. There can be other special services to be performed by motor vehicles designed for such services. Thus, a lorry i.e., truck adapted or designed to carry a crane, is meant for special services of lifting load, moving it side by side, rotating it or moving it horizonatally. Most industrial trucks permit mechanized pick-up and deposit of the loads, eliminating m....
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....he nature of equipment, was based on an erroneous premise. A crane mounted on a truck is a truck crane which is a wellknown machinery which can easily move over roads and highways and is not a stationery equipment. Truck crane is described under the heading 'Crane' in Encyclopaedia Britannica. Thus, a mobile crane mounted on a truck constitutes a single unit known as a 'truck crane 'which is adapted for use upon roads for special services. The truck on which the crane is mounted is constructed and adapted specially to carry the crane. 'Goods carriage' as defined in section 2(14) of the Motor Vehicles Act, 1988 means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. This definition is not confined only to carriage of freight which is narrower than the expression 'carriage of goods'. In the instant case, truck was adapted for use solely for carriage of the crane mounted on it. The mounted crane was attached to the truck which carried it. The test of carrying goods such as potatoes and tomatoes that requires loading and unloading i....
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....d that the above case laws of Hon'ble Kerala High Court and Gujarat High Court fully support the case of the assessee. Admittedly there is no jurisdictional High Court decision on this issue. However, the Tribunal's decision in assessee's own case is in favour of the assessee. Furthermore, there are two other Hon'ble High Court decisions which are in favour of the assessee. Hence in our considered opinion the issue is to be decided in favour of the assessee in view of the above legal precedent. As regards the citation from the Hon'ble Rajasthan High Court referred by the Revenue we find that these are not applicable on the facts of the present case. Furthermore, we find that the Hon'ble Apex Court in the case of CIT vs Vegetable Products reported in 88 ITR 192 has held that "If the court finds that the language of a taxing provision is ambiguous or capable of more meanings than one, then the court has to adopt that interpretation which favours the assessee, more particularly so where the provision relates to the imposition of a penalty". In the background of the aforesaid discussion and precedent we hold that the ld. CIT(A)'s order in this case are....
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.... of the matter also order of the AO is liable to be quashed. Similarly the issue as to recourse to section 154 in such cases is covered by the decision of the Hon'ble Calcutta High Court in the case of Harbans Lal Malhotra & Sons (P)Ltd vs ITO 83 ITR 848 (Cal).The Hon'ble High Court had held that proceedings taken u/s 154 were without jurisdiction. Head notes of the said decisions are as under:- "Section 154 of the Income Tax Act, 1961 - Rectification of mistake - Apparent from record -Assessment Year 1963-64 - ITO issued notice under section 154/155 proposing rectification of assessment order wherein assessee was wrongly allowed depreciation of 10 percent instead of 7 percent on machinery used in manufacture of safety razor blades from steel strips - Whether mistake proposed to be rectified was dependent on question as to whether machinery used for production of safety razor blades could be said to be par t of 'Iron & Steel Industry' and could come within category (b) of item III (ii) in Part I of Appendix I of Income-tax Rules, 1962 which was a question which required, firstly an interpretation of expression ' other machinery and plant' and, secondly, nat....