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TMI Blog2018 (2) TMI 1937X X X X Extracts X X X X X X X X Extracts X X X X ..... S. S. GODARA, JUDICIAL MEMBER This Revenue's appeal for assessment year 2012-13 arises against the CIT(A)-3, Rajkot's order dated 06.06.2016 in case no. CIT(A)-3/A3/0958/14-15, in proceedings u/s.143(3) of the Income Tax Act, 1961; in short "the Act". 2. We notice at the outset that the Revenue's sole substantive ground pleads that the CIT(A) has erred on facts as well as in law in defining assessee's business as transporter thereby concluding that it is entitled for higher rate of depreciation on dumpers as against 15% allowed in assessment proceedings resulting in disallowance of ₹ 77,61,266/- in question. The lower appellate findings discussed at length all the relevant facts, Assessing Officer's reasoning for invoking the impugned disallowance as well as assessee's submissions as under: "5.1.0 I have carefully considered the submission of the appellant and perused facts of the case in A.O's order. Ground No.1, 2 & 3 are basically arising out of the grievance from the A.O's action of denying higher depreciation on vehicles on the proposition that appellant is not in the business of running vehicles on hire. The undisputed fact is that appellant is civil contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of excavated material are road transport vehicles. 5.1.3 The Ld. AR has argued that the appellant had used more than 50 such vehicles to carry out the business of transport and removal of overburdened/ waste rock of third parties. He argued that the contracts allotted to him were partly or fully for this purpose. He submitted copy of the letter of intent of such contracts. A copy of Purchase Order from M/s. Jindal Saw Limited No.4720000245, dt.30/6/2011 was made available which were detailing the 'Terms of Delivery' as under :- (Quote) "TRANSPORTATION: Transportation of crushed material from crusher site up to Buyer's site at Nanakapaya, Distt.: Kutchh, Gujarat shall be arranged by the Contractor FREIGHT: Extra @ ₹ 145/- PMT shall be to Buyer's account WORK DESCRIPTION: Contractor (M/s. Bhimji Vekli Sorathia)shall carry out the job work as per the following. (a) shall unload the iron ore from lorries being received at their site for crushing. (b) shall crush the iron ore lumps supplied by Buyer for making of iron ore fines at his own crusher at Adipur to desired size given in the specification and load the material to dumpers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for AY 2012-13. It was held by the Ld. CIT(A) as under: "The issue involved in this matter needs to be looked at from the following angles; 1. Whether the assets were eligible for higher rate 2. Whether the assets were given on hire 3. Whether the assets were used in transportation of something 4. Whether the assets were used in asses see's own business. As regards the first point regarding the assets being eligible for higher rate of depreciation, I understand that there is no dispute even from the side of the AO. Hence, we have to conclude that assets are eligible for higher rate of depreciation. The next question is that whether the assets were actually, given on hire or were used in the business of hiring. I have attended to this point in detail in the forgoing paragraphs and elaborated earlier, after duly considering all the facts and evidences. The above referred discussion has convinced me that the assets were actually given on hire or were used in the business of running them on hire. The assets which are otherwise eligible for higher rate of depreciation can claim that higher rate only if they are actually used in an activity which involves tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, in my considered opinion, the test of user will come into play only when facts point out that the assets were used in assessee's own business. If the assets are used in assessee's own business, than it will have to be decided as to whether that business of the assessee is that of transportation or not. In the case under consideration, I am of the opinion that it is clearly established that the appellant had given assets on hire in terms of tender. Once it is established that the vehicles were given on hire in response to an open tender, the existence of two parties are confirmed and there is no scope whatsoever to speculate whether the same were used in the business of the appellant. It is absurd to think that one will hire one's assets to a "third party" in order to carry out "one's own business operation." Thus, I am quite clear in my mind that facts of the case clearly point to a situation that the assets were not used in appellant's own business. Business transaction involved here is that the appellant has given certain of his assets on hire to certain third parties and those third parties have put those assets to use in such activ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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