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TMI Blog2012 (7) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is entitled for depreciation on assets at the rate of 30%. 3. Briefly stated the facts of the case are that the assessee is in the business of hiring of earthmoving equipments. For the year under consideration, the return was filed declaring at ₹ 20,94,014/- on 30.10.2007. The return was selected for scrutiny assessment and the statutory notices u/s. 143(2) 142(1) were issued and served on the assessee. 4. During the course of assessment proceedings, the Assessing Officer found that the assessee has debited ₹ 2,71,22,378/- under the head Administration and other selling expenses . The AO further found that this amount included an amount of ₹ 2,27,71,651/- under the hear Repairs Maintenance . The AO s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and maintenance being of revenue in nature. The AO went on to conclude that the amount has been expended exclusively for increasing the life of the machinery and relying upon the decision of CIT Vs Saravana Spinning Mills Pvt. Ltd. (2007) 293 ITR 201 (SC) disallowed the amount of ₹ 67,62,606/- as being capital in nature. 6. When the matter was agitated before the Ld. CIT(A), the assessee reiterated its stand that the amount spent on repairs and maintenance of machineries was nothing but revenue expenditure required for the maintenance and upkeep of old machineries. After considering the explanation and the submission of the assessee, the Ld. CIT(A) was of the view that the AO has not raised doubts on the genuineness of the expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any logic behind this finding. What the AO is comparing is the WDV of the heavy machineries whereas spare parts and other accessories are purchased at the present market value. The sole test is to find out whether expenditure was incurred to maintain existing asset and no new asset is brought into existence. This is also the finding of the Hon ble Supreme Court in the case of CIT Vs Saravana Spinning Mills Pvt. Ltd. (supra). Considering the nature of items furnished by the assessee before the AO, we are of the considered view that no new asset has come into existence and all the items are either used for the upkeep or maintenance of the existing heavy machineries which are used in the line of business of the assessee. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n @ 15%. 11. The assessee agitated the matter before the Ld. CIT(A). Before the CIT(A) the assessee reiterated his argument that the Transit mixer, concrete pump, JCB holder and mobile crane were heavy commercial vehicles registered with the RTO and were given on hire therefore its claim for higher rate of depreciation is justified. The Ld. CIT(A) was convinced with the explanation of the assessee and allowed the depreciation at the rate of 30%. 12. Before us, the Ld. Departmental Representative relied upon the order of AO. The Ld. Counsel for the assessee reiterated his stand taken before the lower authorities. 13. We have considered the rival submission and perused the orders of lower authorities. As per Appendix-1 to I.T. Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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