2023 (7) TMI 989 - AT - Income Tax

Higher rate of depreciation on dumpers - @30% or @15% - HELD THAT - As relying on HC own case 2018 (5) TMI 1172 - GUJARAT HIGH COURT we have no hesitation in allowing the benefit of higher rate of depreciation @ 30% on Dumper Tipper etc. to the assessee Thus the grounds raised by the Revenue is devoid of merits.

Summary

Issues involved:
The judgment involves the appeal filed by the Revenue against the Appellate order passed by the Commissioner of Income Tax (Appeals)-3, Rajkot u/s 143(3) of the Income Tax Act, 1961 for the Assessment Year 2015-16.

Nature of Business and Depreciation Rate:
The assessee, a Partnership Firm engaged in Earth Moving Equipments on hire basis and Mining Contractor, claimed higher rate of depreciation @ 30% on Dumper, Tipper, etc. The Revenue contended that the assessee's business was as a transporter and questioned the entitlement to higher depreciation. The Ld. CIT(A) allowed the higher rate of depreciation based on the Gujarat High Court judgment in the assessee's favor for earlier assessment years. The Revenue challenged this decision on the grounds that the assessee did not earn income from hiring out the equipment and should not claim depreciation if the equipment was taken on hire.

Judicial Analysis and Conclusion:
The Tribunal referred to the Gujarat High Court judgment which highlighted that the assessee's business involved providing equipments on hire with manpower for specific tasks controlled by the principal. The Tribunal noted that the assessee was awarded contracts to provide specialized equipments and manpower for mining and transportation on hire, even if used in direct mining operations. The Tribunal found no error in the view taken, citing CBDT Circulars and relevant legal precedents. Consequently, the Tribunal allowed the benefit of higher rate of depreciation @ 30% on Dumper, Tipper, etc., in line with the High Court's decision.

Decision:
Respecting the High Court's judgment, the Tribunal dismissed the Revenue's appeal, deeming the raised grounds as lacking merit. The appeal was therefore dismissed, affirming the allowance of higher depreciation rate to the assessee.