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TMI Blog2011 (6) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... Shiv Constructions Co. v. CIT [1986 (3) TMI 18 - GUJARAT High Court]. Thus CIT(A) has rightly directed AO to allow depreciation at 40 per cent on tippers, vibrator and vibrator soil compactor. Additional depreciation - As assessee fairly conceded that the assessee had never pressed any claim towards additional depreciation either before the AO or CIT(A) therefore the observations of the CIT(A) that the assessee is entitled to additional depreciation need to be vacated. Therefore vacate the observations made by CIT(A) that the assessee is entitled to additional depreciation on the aforesaid items. Expenses to the extent of 60 per cent disallowed on account of repair and maintenance of machinery - bills of expenses were on the small ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in allowing of depreciation on tippers, vibrators, vibrator soil compactor 40 per cent instead of 15 per cent allowed by the Assessing Officer and further erred in the alternative in granting additional depreciation without appreciating the provisions of section 32(1)(iia). (2) That the order of the learned Commissioner of Income-tax (Appeals), Ludhiana, be set aside and that of the Assessing Officer be restored. (3) That the appellant craves leave to add or amend any ground of appeal before it is finally disposed of." 3. The assessee was engaged in the business of civil construction as also in the execution of contract work. He filed his return of income on October 31, 2006 returning total income at Rs. 5,14,470 as against which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd machinery by the Assessing Officer. The argument of the authorised representative are on the basis of the functional tests and the view taken by the respective courts and the Tribunals. The higher depreciation is on the basis of the rigorous and hard use of commercial vehicles in comparison to the stationed and permanently installed machinery. Further these vehicles have been registered with the DTO, the authority responsible for the registration of the commercial vehicle. This fact has also been acknowledged by the Assessing Officer. Further the vehicles are moving vehicles and are used to move earth and thus have to be treated at par with other commercial vehicles such as trucks, etc. That these vehicles are special purpose vehicles do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s allowed depreciation at the rate of 40 per cent on tippers, vibrator and vibrator soil compactor while passing the assessment order in the case of S.C. Jain Construction Co. P. Ltd. on December 29, 2010 under section 143(3) for the assessment year 2008-09 and therefore it was the Department which believed that the appropriate rate of depreciation was 40 per cent and not 15 per cent His second submission was that the order passed by the learned Commissioner of Income-tax (Appeals) is in conformity with the decision taken by this Tribunal in Gujarat Tubewell Co. v. ITO [1992] 43 TTJ (Ahd.) 331; Hindustan Construction Co. v. ITO [1989] 30 ITD 171; CIT v. A. M. Constructions [1999] 238 ITR 775 (AP) and Shiv Constructions Co. v. CIT [1987] 165 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the matter, we hold that the learned Commissioner of Income-tax (Appeals) has rightly directed the Assessing Officer to allow depreciation at 40 per cent on tippers, vibrator and vibrator soil compactor. 9. Apropos the issue as to whether the assessee is eligible to additional depreciation on the aforesaid items, learned counsel for the assessee fairly conceded that the assessee had never pressed any claim towards additional depreciation either before the Assessing Officer or before the learned Commissioner of Income-tax (Appeals) and therefore the observations of the learned Commissioner of Income-tax (Appeals) that the assessee is entitled to additional depreciation need to be vacated. We therefore vacate the observations made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional depreciation on the aforesaid items, for the reasons given earlier in this order. Ground No. 1 is partly allowed. 15. Ground No. 2 taken by the Department reads as under : "2. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals)-II, Ludhiana has erred in allowing the expenses to the extent of 60 per cent out of Rs. 2,09,374 disallowed by the Assessing Officer on account of repair and maintenance of machinery." 16. We have heard both parties. The learned Commissioner of Income-tax (Appeals) has dealt with the issue in paragraph 6 of his appellate order as under : "6. Ground No. (b) : Addition of Rs. 2,09,374 on account of repair and maintenance of machinery. The addition has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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