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Issues involved:
The judgment addresses four key issues raised by the Revenue under section 256(1) of the Income-tax Act, 1961: 1. Classification of dumpers as road transport vehicles. 2. Allowance of additional depreciation for dumpers. 3. Eligibility for deduction under section 32A. 4. Depreciation rate for temporary structures at construction sites. Classification of Dumpers: The assessee, a partnership firm engaged in dam construction, claimed investment allowance for a dumper, which the Income-tax Officer deemed a road transport vehicle. The Commissioner of Income-tax upheld this view, but the Income-tax Appellate Tribunal disagreed. The Tribunal reasoned that a dumper, designed for material transport within construction sites, did not qualify as a road transport vehicle. Consequently, the Tribunal allowed the claim, leading to a favorable decision for the assessee. Additional Depreciation for Dumpers: The dispute over additional depreciation for dumpers centered on whether they qualified as earthmoving machinery. The Revenue argued that dumpers did not meet the criteria for 30% depreciation applicable to such machinery. However, the Tribunal determined that dumpers fell under the category of earthmoving machinery, entitling the assessee to the higher depreciation rate. The court sided with the assessee on this issue, affirming their entitlement to the 30% depreciation rate. Deduction under Section 32A: Regarding the deduction under section 32A, the Tribunal allowed the deduction even though the assessee's business did not fall under the specific criteria outlined in section 32A(2)(b) of the Income-tax Act, 1961. The court upheld the Tribunal's decision, ruling in favor of the assessee on this matter as well. Depreciation for Temporary Structures: The final issue concerned the depreciation rate for temporary camp sheds and structures used by the assessee at the construction site. The assessee claimed 20% depreciation, while the Income-tax Officer allowed only 7.5% based on old Appendix-I of the Income-tax Rules. The Tribunal supported the assessee's claim for 20% depreciation, but the court disagreed. It held that the nature of the construction warranted only 7.5% depreciation, ruling in favor of the Revenue on this particular issue. This comprehensive summary highlights the key legal interpretations and decisions made by the High Court in response to the issues raised by the Revenue under the Income-tax Act, 1961.
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