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TMI Blog2017 (1) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... JM This appeal by the assessee is directed against the order of ld. CIT (A)-I, Jaipur dated 22.02.2016 pertaining to A.Y. 2010-11. The only effective ground in this appeal reads as under :- The ld. Commissioner of Income Tax (appeals) has erred on facts and in law in holding that JCB Excavator, Motor Grader and Soil Compactor used in the business of construction of road exclusively are not commercial vehicles as they are not used solely for carriage of goods and thus entitled to normal depreciation @ 15% as against 50% claimed by assessee and thereby confirming the addition of ₹ 30,52,875/- made by AO on account of excess depreciation. 2. Briefly stated the facts of the case are that the case of the assessee was reopened for assessment and the assessment under section 143(3) read with section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 12.02.2015. While framing the assessment, the AO observed that the assessee claimed depreciation on Soil compactor of ₹ 18,60,000/-, JCB Excavator of ₹ 30,75,000/- and Tata Motor Grader of ₹ 37,87,500/- at higher rate @ 50% amounting to ₹ 43,61,250/-. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO in ITA No. 818/Bang./2010. The ld. D/R also relied on the judgments of the Hon ble Jurisdictional High Court rendered in the case of CIT vs. M/s. Gotan Lime Stone Others in Income Tax Appeal No. 41/2002. He also relied upon the judgment of the Hon ble Gauhati High Court in the case of CIT vs. Sibson Construction Co. and also the judgment of Hon ble Andhra Pradesh High Court tendered in the case of CIT vs. Progressive Engineering Co., 230 ITR 729 (AP). 4.2. In rejoinder, the ld. Counsel for the assessee submitted that these judgments were considered by the Coordinate Bench in the case of ACIT vs. M/s. Sayeed Iqbal in ITA No. 39/JU/2009. 4.3. We have heard rival contentions and perused the material available on record. The only issue to be decided is whether the assessee is entitled for depreciation @ 50% on JCB Excavator, Tata Motor Grader and Soil Compactor as claimed. We find that there are conflicting views by the Coordinate Benches of the Tribunal in respect of availability of the depreciation at higher rate. The ld. CIT (A) decided the issue in para 3.2.2 of his order by observing as under :- 3.2.2. (i) The facts of the case are that the appellant is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. Therefore for a vehicle to be a commercial one, it has to be used as goods carriage . In the instant case under consideration, none of the item under consideration i.e. Soil compactor, JCB Excavator and Motor Grader can be used solely for the carriage of goods. (v) It is pertinent to mention here that as per section 65 of the Motor Vehicles Act, the powers were given to the State Governments to make rules. The relevant extracts of section 65 are reproduced as under :- 65. Power of State Government to make rules. (1) A State Government may make rules for the purpose of carrying into effect the provisions of this Chapter other than the matters specified in section 64. (2) Without prejudice to the generality of the foregoing power, such rules may provide for (a) The conduct and hearing of appeals that may be preferred under this Chapter (the fees to be paid in respect of such appeals and the refund of such fees); (b) The appointment, functions and jurisdiction of registering and other prescribed authorities; (c) The exemption of road-rollers, graders an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor Vehicles Act, 1988, cannot be fitted into the Income tax Act. This definition is an extensive definition which includes all kinds of mechanically propelled vehicles including a trailer. The scope of the Motor Vehicles Act is to bring into its fold all kinds of moving objects plying on the roads under its ambit so as to provide safety measures and regulate traffic. Therefore, any objects which moves on the road by itself such as harvesting combines, road layers, cranes on wheels, etc. requires registration under the Motor Vehicles Act. However, while claiming depreciation under the Income-tax Act, only the relevant provisions of the Income-tax Act has to be applied. 9. In an overall consideration of the facts and circumstances of the issue and also the relevant facts which have been deliberated upon in the fore-going paragraphs, we are of the considered view that the authorities below were justified in restricting the allowability of depreciation at 15% in respect of JCB Earth Movers. It is ordered accordingly. (viii) It may be mentioned that the Hon ble ITAT in the above referred decision analyzed the issue in detail and considered various judicial pronouncements. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Though it is not used as a transport vehicle, JCB is a four- wheeled excavator-cum-transport vehicle used for excavation of earth and movement of the same, though for limited distances. Even though the purpose of motor lorry which is a heavy motor vehicle used for transport of goods from place to place, cannot be served by a JCB, we are of the view that the expression motor lorry covered by the above entry of the IT Rules providing for higher rate of depreciation, has a wide meaning. JCB though basically is used for excavation of soil, it is a heavy vehicle also used for transport of excavated soil, sand or other goods, for a limited distance and the machine is also used to level and shape the land. Therefore, it serves as a transport equipment as well and so long as it is registered under the Motor Vehicles Act, it is a motor vehicle within the meaning of the said term as held by the Supreme Court in the decision above referred. We, therefore feel that in a larger sense JCB answers the depreciation of motor lorry within the meaning of the entry referred above contained in the IT Rules. There is no dispute that the item is not let on hire by the assessee which is one of the ite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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