2007 (4) TMI 149

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....in law in holding that harvesting combines were entitled to 30% depreciation even before amendment entry of 24-7-1978". 2. According to the facts as disclosed in the statement of the case the Assessee Officer has passed an assessment order granting depreciation on harvesting machine at the rate of 30%. Thereafter, a statutory notice under Section 154 of Income-Tax Act 1961 was issued to the assessee who replied the same on 10-5-1976. The assessee raised the arguments that the issue is debatable and cannot be re-opened by invoking the provisions of Section 154.  The assessee placed reliance on the instructions dated 4-12-1974 issued by the Central Board of Direct Taxes ("the CBDT") and claimed that the controversy had already been set ....

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....enue's case that harvesting combine cannot be said to be covered by or anywhere near item (9) of part of D sub head (III) of part I of Appendix I to the Income-tax Rules, 1962. Item (9) provides 30% depreciation on motor buses, motor lorries, motor taxies, motor tractors (NESA). Harvesting combine is of no use if attachment for harvesting and thrashing of wheat and rice are not attached with it and therefore, its work is by and large similar to the working of a tractor. The CBDT issued a notification No. 2435/F. (No. 142 32) 77-IPL dated 24-7-1978 amending the entry at item (9) referred to above, to the following effect : "In part of I of Appendix I to the Income-tax Rules, 1962 in the table of rates at which depreciation is admissible in ....

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.... similar to a motortractor and being entirely meant for agricultural land operations its life-supra would normally be shorter than a motor tractor, and, in any case, not longer than that.  Therefore, harvesting combine would not be said to be outside the category of motor vehicle and motor tractors, even before July 24, 1978. 9. We are, therefore, of the considered view that harvesting combines were entitled to 30% depreciation even before the amendment entry of July 24, 1978 (supra). Such being the case, the addition of Rs. 84,694/- made in the assessment is vacated". 4. On the basis of the aforementioned observation made in the order, the Tribunal concluded that the harvesting combine was entitled to 30% depreciation even before th....