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2018 (11) TMI 136 - HC - Income TaxHigher rate of depreciation on trucks/dumpers u/s 32 - @15% or 30% - assessee is a sole proprietorship firm engaged in the business of civil work - Held that - Having heard the learned counsel for the appellant and perused the impugned order, we find that the two arguments, which the appellant has raised now on the basis of which he proposed two questions of law do not arise in the facts of the present case as no such arguments were raised on behalf of the appellant-assessee before any of the authorities below. Perusal of the order passed by the CIT(A) as also of Income Tax Appellate Tribunal does not reflect whether any one of these arguments were raised by the appellant before them, therefore, such arguments cannot be allowed to be raised before this Court for the first time. The Tribunal in the impugned order has relied on the judgement of the Madhya Pradesh High Court at Gwalior in M/s. Anamay Construction Co. vs. UOI & Ors 2015 (10) TMI 2740 - MADHYA PRADESH HIGH COURT wherein it was held that the assessee had engaged his own trucks for transporting earth to facilitate laying of roads. Under such circumstances, the assessee cannot be said to be in the business of hiring out his trucks for removal of earth to make him entitled for higher rate of depreciation, as removal and transportation of earth are only sub-processes of his main business of laying of roads. The Tribunal on the same assumption had also relied on judgement of the Kerala High Court in Gaylord Constructions 2009 (8) TMI 1156 - KERALA HIGH COURT . No substantial question of law.
Issues:
1. Claim of higher rate of depreciation on trucks/dumpers by the appellant-assessee. 2. Rejection of the appeal by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal. 3. Arguments presented by the appellant's counsel regarding the classification of trucks/dumpers as "machinery" for depreciation purposes. 4. Reference to the judgment of the Supreme Court in D.S. Nakara vs. UOI-AIR 1983 SC 130. 5. Admissibility of the proposed questions of law raised by the appellant. 6. Consideration of whether the arguments raised by the appellant were presented before the lower authorities. 7. Reliance on the judgments of the Madhya Pradesh High Court and the Kerala High Court by the Tribunal. 8. Conclusion of the High Court on the appeal. Analysis: 1. The appellant-assessee claimed a higher rate of depreciation on trucks/dumpers at 30% under Section 32 of the Income Tax Rules, 1962. The Income Tax Appellate Tribunal dismissed the appeal against the assessment order, which disallowed the higher rate of depreciation, resulting in excess depreciation being added to the total income of the assessee. 2. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal rejected the appellant's appeal against the assessment order, leading to the filing of the current appeal before the High Court. 3. The appellant's counsel argued that trucks and dumpers, used in the business of civil work, should be considered as "machinery" for depreciation purposes, justifying the claim for a higher rate of depreciation at 30%, irrespective of whether they were used for hiring out. 4. Reference was made to the judgment of the Supreme Court in D.S. Nakara vs. UOI-AIR 1983 SC 130 to support the argument for granting higher depreciation rates. 5. The appellant's counsel proposed two questions of law based on the arguments presented, seeking their admission and consideration by the Court. 6. The High Court noted that the arguments raised by the appellant were not presented before the lower authorities, and as such, could not be raised for the first time before the Court. 7. The Tribunal relied on judgments of the Madhya Pradesh High Court and the Kerala High Court to support its decision regarding the classification of the appellant's activities and the eligibility for higher depreciation rates. 8. After considering the arguments and the orders of the lower authorities, the High Court concluded that no substantial question of law arose in the appeal, leading to the dismissal of the appeal. This detailed analysis covers the various issues involved in the legal judgment, providing a comprehensive understanding of the case and the reasoning behind the High Court's decision.
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