2019 (12) TMI 1507 - AT - Income Tax

Depreciation on crawler cranes/trailers - Whether the crawler cranes/trailers are in the nature of Plant Machinery and thus eligible for depreciation @15% and not eligible for higher depreciation of 30%? - HELD THAT - As decided in own case 2017 (12) TMI 644 - ITAT MUMBAI in view of the above discussion and considering judicial pronouncements as quoted above we do not find any merit in action of lower authorities for declining higher claim of depreciation at 30% on Crawler Cranes and Dozers. Appeal of the Revenue is dismissed.

Summary

Issues:
- Interpretation of depreciation rates for crawler cranes/trailers as Plant & Machinery.
- Application of higher depreciation rate of 30% instead of 15%.

Interpretation of Depreciation Rates for Crawler Cranes/Trailers as Plant & Machinery:
The Revenue appealed against the Commissioner of Income Tax (Appeals) decision, arguing that crawler cranes/trailers should be classified as Plant & Machinery, eligible for depreciation at 15%, not the higher rate of 30%. The Appellate Tribunal noted that a similar issue was previously decided in favor of the assessee by a Coordinate Bench in a previous case. The Tribunal examined the nature of crawler cranes and dozers, emphasizing their resemblance to motor vehicles due to their power plants, hydraulic systems, and mobility capabilities. The Tribunal further highlighted that registration under the Motor Vehicles Act is not a prerequisite for claiming higher depreciation, citing relevant legal precedents.

Application of Higher Depreciation Rate of 30%:
The Tribunal analyzed the definition of "motor vehicle" under the Motor Vehicles Act, emphasizing that if a vehicle is capable of being run on the road, it qualifies as a motor vehicle. The Tribunal referenced Supreme Court and High Court judgments to support the contention that registration under the Motor Vehicles Act is not mandatory for claiming depreciation. Additionally, the Tribunal clarified that even though the crawler cranes were not permanently registered due to their operational nature in port/factory premises, they were recognized as heavy motor vehicles under the Bombay Vehicle Tax Act. The Tribunal also discussed the type of work carried out by cranes and highlighted the need to categorize vehicles based on their functional similarity to listed machines.

Conclusion:
Considering the judicial pronouncements and precedents, the Tribunal found no merit in the lower authorities' decision to deny the higher claim of depreciation at 30% on crawler cranes and dozers. Upholding the orders of the Commissioner of Income Tax (Appeals) and the Coordinate Bench, the Tribunal dismissed the Revenue's appeal. The judgment reiterated that registration under the Motor Vehicles Act is not a prerequisite for claiming higher depreciation and emphasized the importance of functional similarity in categorizing vehicles for depreciation purposes.