2021 (7) TMI 37 - 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 - Coordinate bench decided the issue in favour of the assessee by approving the classification of the assets under the head Motor Vehicle in 2017 (12) TMI 644 - ITAT MUMBAI As relying on respecctive own cases 2019 (12) TMI 1508 - ITAT MUMBAI , 2019 (7) TMI 1835 - ITAT MUMBAI and 2019 (12) TMI 1507 - ITAT MUMBAI 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:
1. Classification of assets as Plant & Machinery or Motor Vehicle for depreciation.
2. Disallowance of higher depreciation claim by the assessing officer.
3. Applicability of higher depreciation rate on Crawler Cranes and Dozers.

Analysis:
1. Classification of assets: The issue revolves around the classification of assets as Plant & Machinery or Motor Vehicle for depreciation purposes. The appellant, engaged in providing cranes on hire, claimed depreciation at 30% under the head Motor Vehicle. However, the assessing officer disallowed the claim, allowing only 15% by treating the assets as Plant & Machinery. The Coordinate Bench previously decided in favor of the appellant, approving the classification under the head Motor Vehicle.

2. Disallowance of higher depreciation claim: Over the years, the assessing officer consistently disallowed the higher depreciation claim of the appellant, leading to appeals. The Ld. CIT(A) and Coordinate Benches upheld the appellant's claim, settling the issue in favor of the assessee for various assessment years. The Coordinate Bench's decision in previous years supported the appellant's claim for higher depreciation at 30% on Crawler Cranes and Dozers.

3. Applicability of higher depreciation rate: The Tribunal analyzed the nature of assets, emphasizing that registration under the Motor Vehicles Act is not mandatory for claiming higher depreciation. The Tribunal referred to relevant legal precedents, including the Supreme Court's ruling, to support the appellant's claim for higher depreciation. The Tribunal also highlighted that functional similarity with listed machines determines the asset's category for depreciation purposes.

4. Judicial Pronouncements: The Tribunal cited numerous judicial precedents supporting the appellant's claim for higher depreciation on Crawler Cranes and Dozers. These decisions, including those from different benches and high courts, reinforced the appellant's entitlement to claim higher depreciation at 30%. The Tribunal concluded by dismissing the Revenue's appeal, upholding the Ld. CIT(A)'s decision based on previous favorable rulings and legal interpretations.

In conclusion, the Tribunal's detailed analysis and reliance on legal precedents affirmed the appellant's entitlement to claim higher depreciation on Crawler Cranes and Dozers as Motor Vehicles, settling the issue in favor of the assessee based on consistent judicial decisions and statutory interpretations.