TaxTMI 
TaxTMI 
2018 (5) TMI 46
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....he Assessing Officer also noted that as per Part-III(3)(ii) of the table of rates prescribed under Rule 5 of the IT Rules, 1962, higher rate of depreciation at 30% is eligible only to motor lorries, motor buses and motor taxies, which would be used for the purpose of running them on hire. Otherwise, they are eligible for depreciation at 15% as per Part-III(1) of the said Rules and denied the claim of the assessee at higher rate. 3. On appeal, ld. CIT(A) deleted the addition made by the Assessing Officer and allowed the appeal filed by the assessee by observing as under:- "6. I have considered the submissions and also the details filed in the form of paper book. The only issue for resolution is whether the assessee would be entitled to higher claim of depreciation on the Uppers, dumpers, trailers used in his business. Under part III (3)(ii) of the Depreciation Schedule in IT Rules, which provides as under: 3(1,) Motor buses, motor lorries and motor taxis used in a business of running them on hire. It is seen that the AO had denied this claim observing that the core activity of the assessee is providing services towards CHA, Stevedoring, C & F, in which transportation is an ....
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....ing on hire of third parties and not for the business of C & F agent. It was also contended that this is not a case where the business of C & F agent used the lorries/dumper/trailers for himself for the C & F activity. It was further contended that the vehicles cannot be used except for transportation/hiring contracts for the asessee's business, and that the utilization of the vehicles was for the service as per agreement in the nature of either „transportation‟ or hiring of vehicles for transportation' as per terms of contract and not for any use for trading of goods or procuring/ process/manufacturing of any goods for own business. Thus it was contended that the case squarely falls within the CBDT Circular. It was further submitted that dumpers are registered as road transport vehicles with the road transport authority with registration number and it is not pure machinery, and that as per clarification of road transport authority „dumpers‟ are road transport vehicles to be registered under Motor Vehicle Act. The authorised representative further pointed that already for A.Y.2011-12 and A.Y.2012-13 the Ld.CIT(A), Guntur and CIT(A)-1, Visakhapatnam h....
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....en the motor lorry is used by the assessee in his own business of transportation of goods on hire. Thus, it is not necessary that the assessee has to be exclusive transportation contractor to claim this relief. 7.3 in the light of the CBDT Circular No. 652 dated 14.05.1993, and the judicial pronouncements discussed above, it is held that the assessee is entitled to the claim of higher depreciation as it is engaged in the business of transportation of goods on hire. Merely because the assessee is also engaged in other Business activity which is a closely interrelated business cannot be a valid ground to deny such relief to the assessee. It is also noted that similar views were taken by the CIT(A)s in the assessee's case for earlier two years. In these scenario, I consider it appropriate to direct the AO to delete the impugned addition." 4. Ld. Departmental Representative relied on the grounds of appeal and also the assessment order passed by the Assessing Officer. 5. Ld. counsel for the assessee has submitted that the very same issue came up before this Tribunal in assessee's own case for Assessment Year 2011-12 in ITA No. 268/VIZ/2016, dated 22/12/2017, wherein the Tribun....
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.... contended that transportation is part of the main business of the assessee as can be seen from the assessee's name itself i.e "Srivalli Shipping and Transport". Further, the AR furnished the details of the turnover for the previous year relevant for the Asst. Yr. 2011-12, as detailed below: Service Details Turnover Amount C H A Receipts 490,44,602 Cargo Handling receipts 843,17,989 Port Service receipts 430,66,123 Transport Receipts 2299,64,332 Reimbursement receipts 1511,23,536 5.3.2 I have carefully considered the above. Out of the gross business receipts of Rs. 55,75,16,582/-, the assessee received Rs. 22,99,64,332/- from its transport business. Thus, it is clear that transportation is not merely incidental to the assessee's business as the receipts from transport business are also substantial. 5.3.3 I have also perused the decisions of the Hon'ble Supreme Court and High Courts relied on by the AR in this regard. The Hon'ble Andhra Pradesh High Court in the case of CIT v A.M. Constructions (supra) has held that tippers are eligible for higher rate of depreciation as the substantial income of the assessee is from hiring of tippers. The relevant p....