TaxTMI 
TaxTMI 
TaxTMI 
2013 (8) TMI 968
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....on the vehicles used for transporting assessee's own goods. 4. The facts relating to the said issue are stated in brief. The assessee is engaged in the business of running a quarry, wherein the rock boulders are blasted and crushed into pieces by using stone crushers, screened and thereafter they are loaded into lorry/tractor for transporting to the Customer places. The major customer of the assessee is Indian Railways and inferior quality metals are sold public also. The assessee uses its own vehicles for transportation of goods. In the return of income, the assessee claimed depreciation at a higher rate, i.e. @ 30% on the vehicles used to transport the metals. The Assessing Officer took the view that the higher rate of depreciation is applicable only to motor buses, motor lorries and motor taxies used in the business of running them on hire. The Assessing Officer also drew support for his view from the decision of Hon'ble Supreme Court in the case of Gupta Global Exim Pvt. Ltd. (305 ITR 132). Accordingly, the Assessing Officer restricted the depreciation on vehicles to 15%, i.e., the normal rate applicable to vehicles which are not used in the business of running them on hire. T....
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....rtation of metal and was also collecting transportation charges. 6. On the contrary, the Ld. DR submitted that the higher rate of depreciation is admissible only to those vehicles which are used in the business of running them on hire. In the instant case, the assessee is not carrying on any business of running the vehicles on hire but used them only in his business for transporting the goods dealt by him. Accordingly, the Ld D.R submitted that the activity of transportation of goods is incidental to the main business carried on by the assessee and hence the fact the assessee is collecting transport charges does not help him. Since the assessee is not operating the vehicles in the business of running them on hire, he is not entitled for a higher rate of depreciation on those vehicles. 7. We have heard the rival contentions and carefully perused the record. We notice that the Ld. CIT(A) has examined the work orders issued by the Railways and came to the conclusion that the assessee is not engaged in the business of running of vehicles on hire and hence, not entitled for a higher rate of depreciation. For the sake of convenience, we extract below the relevant observations made by t....
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....ss of sale of metal to Railways/Public, the reliance placed by the appellant is not correct. During the appellate proceedings as noted vide order sheet entry dated 26-11-2012, the Council of the appellant stated that no vehicle was given on hire to any party. In view of the above, it is held that assessee is not in the business of running of vehicles on hire". 8. Admitted facts are that the assessee is engaged in the business of selling of metals and the assessee has used his own vehicles for transporting the metals mainly to Railway yard. According to the assessee, the transportation charges are paid separately by the Railways and hence the Vehicles should be considered as run on hire. 9. The assessee has placed reliance in the case of M/s Stanes Tyre and Rubber Products Ltd (referred supra). We have gone through the said decision and notice that the facts prevailing in that case was not found discussed by Hon'ble Madras High Court. The Hon'ble Madras High Court appear to have mainly decided that the Vans and Three wheelers used as goods vehicles are entitled to higher depreciation if they are used for hire or reward. Hence, in our view, the assessee cannot derive support from ....
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.... by the Ld. CIT(A) that the transportation is incidental to the business of sale of metal to Railways/public. Accordingly, we concur with the view of Ld CIT(A) that the assessee was not engaged in the business of running the vehicles on hire. 11. We notice that a similar view has been expressed by the Hon'ble Madhya Pradesh High Court in the case of Kailash Chand Bagaria Vs. CIT and Another (249 ITR 720). In the said case, the assessee therein was engaged in the business of manufacture and trading in limestone. He also used trucks for transporting limestone and claimed a higher rate of depreciation. The Hon'ble High Court held that the dominant purpose for which the assessee used the trucks has been found to be for his own business and hence the assessee is not entitled to higher rate of depreciation. Similar view was expressed by the Hon'ble Karnataka High Court in the case of Veneer Mills vs. CIT (201 ITR 764). We also notice that CBDT has issued Circular No. 652 dated 14-06-1993 (202 ITR (St.) 55) wherein the CBDT has also expressed similar view. For the sake of convenience, we extract below the Circular No. 652 referred above: "Circular No. 652, dated 14th June, 1993 To. Al....