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TMI Blog2019 (7) TMI 1655X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, the cranes are used by the assessee for his own business of construction. There is thumping documentary evidence on record to indicate that the assessee is very much in the business of hiring. The depreciation at the higher rate could not have been declined merely on the assumption that the cranes might have been used by the assessee for his own business of construction. In fact, it would be an error to take the view that for the purpose of claiming depreciation at the rate of 30% the assessee is obliged to establish that the cranes are used exclusively for the hiring business and that they are not used for any other purpose. Decision of this Court in the case of Deputy Commissioner of Income-Tax v. Pradip N.Desai (HUF), [ 2011 (7) TMI 304 - GUJARAT HIGH COURT] wherein this Court took the view that if the assessee is not involved in the business of hiring the vehicle on rent, then he is not entitled to claim higher depreciation under clause (2)(ii) of Entry-III of Appendix-I. There need not be any debate on the proposition of law as explained by this Court in the said judgment. However, as discussed above, there is thumping evidence on record to indicate that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otor Lorries and Motor Taxis used in the business of running them on hire. 7. The Assessing Officer took the view that hiring out construction equipments is an ancillary activity of the appellant and there is every possibility that the cranes are used for the appellant's own construction business. To put it in other words, the Assessing Officer took the view that the cranes referred to above do not fall within the ambit of Motor Bus, Motor Lorries and Motor Taxis. One reason for taking such view is that the cranes are not registered with the RTO. In such circumstances, the Assessing Officer made a disallowance of ₹ 97,52,455=00 by restricting depreciation to 15% on other plant and machinery. 8. The appellant, being dissatisfied with the order passed by the Assessing Officer, preferred an appeal before the Commissioner of Income Tax (Appeals). 9. The appellant submitted before the CIT(A) that the equipments were used for hire. It was pointed out that the appellant is engaged only in hiring equipments, which is indicative from the profit and loss accounts. It was also pointed out that the appellant does not use the cranes for any other activity except hire. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002)122 taxman 2006 (Guj) held that motor vehicle like fire truck, fork lift truck and crane truck which are designed for special services fall within the category of other trucks also called motor lorries. Further in the case of Gujco Carrier the motor crane was registered as a heavy motor vehicle and was an integral part of motor vehicles on which it was mounted and it was registered as heavy motor vehicles and that crane was used for lifting and moving goods. Mobile crane was also registered with RTO as heavy motor vehicle which was mounted on a truck. It was held in the above cited case that lorry or truck would mean not only any motor vehicle designed to carry freight or goods but also to perform said services like fire fighting, therefore, a truck adopted or designed to carry a crane is mounted for such services on lifting load, moving it side by side, rotating it or moving it horizontally. Similarly the CBDT Instruction No.617 refer to folk lifting truck of higher rate of depreciation. On the perusal of the findings of the jurisdictional High Court in the case of Gujco Carrier it is clear that types of cranes having with the assessee are completely of different from categori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr.Hemani pointed out documentary evidence in support of his submissions to show that the major revenue is generated from letting out cranes and equipments used in the construction industry. In this regard, reliance is placed on a decision of the Supreme Court in the case of ICDS Limited v. CIT, (350) ITR 527 (SC). 16. Mr.Hemani submitted that the depreciation at the rate of 30% could not have been denied solely on the assumption that the cranes might have been used in the assessee's own business of construction. It is submitted that there is no mandate under the Act that the underlying asset, i.e. cranes, should be used exclusively for the hiring business. 17. It is also submitted that the Revenue authorities have wrongly concluded that the cranes do not fall within the ambit of Motor Bus, Motor Lorries or Motor Taxis so as to enable the assessee to claim depreciation at the rate of 30%. 18. Mr.Hemani pointed out that even the CDBT, vide Instruction No.617 dated 13th September 1973, had clarified that Forklift Crane , which is admittedly not a motor vehicle would still be entitled for higher rate of depreciation of 30%. Mr.Hemani, by placing strong reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12)21 taxmann.com 151 (Gujarat). 23. Ms.Bhatt submitted that it is true that the very same issue was considered in the Assessment Year 2007-08 for the very same cranes and depreciation was allowed at the rate of 30%. According to Ms.Bhatt, the same was a mistake, and in such circumstances, the principle of consistency as explained by the Supreme Court in the case of Excel Industries (supra) would not be applicable. Ms.Bhatt also submitted that in the absence of any registration of the cranes with the RTO the assessee is not entitled to claim depreciation at the rate of 30%. ANALYSIS : 24. It is not in dispute that similar issued had cropped up in the Assessment Year 2007-08, and after due consideration of all the relevant aspects of the matter, the Assessing Officer had granted depreciation at the rate of 30%. The very same cranes are involved in the present Tax Appeal which were the subject matter of consideration in the Assessment Year 2007-08. However, according to the Revenue, it was a mistake committed by the Assessing Officer at the relevant point of time and such a mistake can always be corrected at a later stage. 25. This is where the principle of rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. These observation were made in a case where taxation was in issue. 15. This Court in Parashuram Pottery Works Co. Ltd. v. Income-Tax Officer, Circle 1, Ward A, Rajkot, (106 ITR 1 at p.10 : 1977 SC 429 at p.435) stated : At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. Assessments are certainly quasi-judicial and these observations equally apply. 16. We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year, but where a fundamental aspect permeating through the different assessment years has been found as a fact, one way or the other, and the parties have allowed that position to be sustained by not challengin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c two orders and did not file any appeal against them. It, however, challenged the subsequent orders of the Tribunal, and while refusing to entertain the appeal, the Delhi High Court held that there was no reason to discard the principle of consistency which requires that when the revenue has accepted a particular view by not filing an appeal that view should be adhered to, unless there is a just cause for departure. The High Court deprecated the practice of pick and choose. 28. The basis of the rule of consistency seems to us, with respect, to be the classic observations of His Lordship Justice H.R. Khanna speaking for the Supreme Court in the case of Parshuram Pottery Works Co. Ltd. v. ITO 106 ITR 01 (SC) . It was held that : We have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity. 29. It is significant to note that the aforesaid observations were noticed by the Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave no end, except when legal ingenuity is exhausted. It is a principal of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. 30. Reference was also made to Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) and then it was held (page 329 of 193 ITR) : We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee for his own business of construction. There is thumping documentary evidence on record to indicate that the assessee is very much in the business of hiring. The depreciation at the higher rate could not have been declined merely on the assumption that the cranes might have been used by the assessee for his own business of construction. In fact, it would be an error to take the view that for the purpose of claiming depreciation at the rate of 30% the assessee is obliged to establish that the cranes are used exclusively for the hiring business and that they are not used for any other purpose. 35. We may refer to a decision of this Court in the case of Gujco Carriers (supra), on which the assessee has placed strong reliance. The issue before this Court in Gujco Carriers (supra) was that the assessee had purchased a mobile crane and claimed depreciation at 40% thereon stating that it was being used in the business of running it on hire and so it will fall under entry No.IIIE(1A) of Part I of Appendix I to the Income Tax Rules, 1962. This Court, after due consideration of all the relevant aspects of the matter, ultimately held that the mobile crane of the assessee which was reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee claimed depreciation before the Tribunal on the basis of the C.B.D.T. Instruction No. 617 dated 13-9-1973, which has been reproduced in the order of the Tribunal, as under: 132. Fork lift trucks - Rate of depreciation prescribed in Part 1 of Appendix 1 to Income Tax rules. Fork lift trucks would be classified under item III (ii) - D(9) of Appendix I to the Income Tax Rules, 1962 and would be entitled to depreciation at the rate of 30 per cent. Item III (ii) - D(9) which is referred to in the aforesaid Instruction No. 617 which relates to fork lift trucks, reads as under : Motor buses and motor lorries other than those used in a business of running them on hire. In the year 1973, the entry D(9) read as under : Motor buses, motor lorries, motor taxis, motor tractors The origin of word 'lorry' is uncertain. 'Lorry' means, (i) a large strong motor vehicle for transporting goods etc. , (ii) a long flat low wagon, or, (iii) a truck used on railways or tramways , as per the Concise Oxford Dictionary. As per Webster's II New River Side University Dictionary, the word 'lorry', in the meaning relevant to the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n making moves. Most industrial trucks permit mechanized pickup and deposit of the loads, eliminating manual work in lifting as well as transporting. Depending on their means of locomotion, industrial trucks may be classified as hand trucks or power trucks. Hand trucks with two wheels permit most of the load to be carried on the wheels, but some of the load must be assumed by the operator to balance the truck during movement. Common two-wheel hand trucks include the barrel, box, drum, hopper, refrigerator, paper-roll, and tote-box trucks. Four-wheel hand trucks are found in many more varieties, including dollies, high and low-bed flat trucks, carts, rack carriers, wagons, and various hand-lift trucks having mechanical or hydraulic lifting mechanisms for raising and lowering a load. Power trucks are propelled by batteries and an electric-motor or by an internal - combustion engine with either a mechanical drive or a generator and electric - motor drive. Propane and diesel engines are used in place of gasoline engines on some types. The non-lift platform truck is used simply for hauling, but other power trucks are provided with mechanisms, usually hydraulic, for lifting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Crane Hoist - McGraw Hill - 'Encyclopedia of Science and Technology'). A crane is usually typed according to its undercarriage. Some of the cranes which undercarriage is not a truck are, 'crawler cranes' mounted on continuous tracks, the 'rail or locomotive crane' on special chasis with flanged wheels for use on railway tracks and 'floating crane' on a barge or scow. Therefore, search for the item 'cranes' in the Entries in Appendix 1 without keeping in mind the nature of equipment, was based on an erroneous premise. A crane mounted on a truck is a truck crane which is a well known machinery which can easily move over roads and highways and is not a stationary equipment. Truck crane is described under the heading 'crane' in Encyclopaedia Britannica, as under : A commonly used type of small movable crane is the truck crane, which is a crane mounted on a heavy, modified truck. Such cranes frequently use unsupported telescoping booms; these are made up of collapsible sections that can be extended outward like the sections of an old nautical telescope or spyglass. The extension of the boom is usually managed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, amounts to imposing a burden on a person to prove something of which Court or Tribunal can take judicial notice. For example, if a witness deposes that he had seen a horse, the Court need not insist upon him for a proof of the anatomy of a horse and can take a judicial notice of horse as an animal. The Courts and Tribunals are not required to act dumb or ignorant of the facts of which judicial notice can be taken. Thus, just as a court can presume what a horse is, it can as well know what a crane is, and also that crane is an integral part of a truck-crane which is registered as a heavy motor vehicle. Lack of effort and knowledge sufficient for taking such judicial notice should not be a burden on the citizens in judicial proceedings. As provided by section 56 of the Evidence Act, no fact of which the Court will take judicial notice, need be proved. This equally applies to the Tribunals which are not in fact strictly bound by the rules of evidence. The mobile crane of the assessee which admittedly was registered as a heavy motor vehicle, would, for the above reasons, clearly fall within the expression 'motor lorries' (which means motor trucks) in Entry III E(1A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the owner of the building. The Tribunal, in our view, was justified in holding that the assessee was the owner of the building, fixtures and fittings of Alpana Talkies within the meaning of section 32 of the Income-tax Act. Consequently, the assessee would be entitled to depreciation under section 32 of the Incometax Act, 1961, on the above items. 5. The expression owned by the assessee also came up for interpretation before the Allahabad High Court in Addl CIT v. U.P. State Agro Industrial Corpn. Ltd. [1981] 127 ITR 97. In this case, depreciation was claimed by the U.P. State Agro Industrial Corporation Ltd., in respect of a building which stood in the name of the State of U.P. The claim was sought to be rejected on the ground that no sale deed had been executed by the State Government in favour of the assessee. The contention of the assessee was that even though the U.P. Government had not transferred the immovable property by a registered deed, the property for all practical purposes belonged to it. It was the beneficial and equitable owner of the property and was entitled to claim depreciation on it. It was held: the expression 'building owned by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in respect of motor vehicles claimed to be owned by it though not registered under the Motor Vehicles Act in its name. The Calcutta High Court held that the provisions of the Motor Vehicles Act, 1939, do not prevent a person from becoming the owner of the motor vehicles without registration. Registration is not an essential prerequisite for the acquisition of ownership of the motor vehicle but is an obligation cast upon an owner of the vehicle for the purpose of running the vehicles in any public place. Hence, it was immaterial whether the buses were registered in the assessee's name or the original owner's name. On the facts of the case, it was held that the assessee was the owner of the vehicles though the same were not registered in its name under the Motor Vehicles Act and that it was entitled to depreciation in respect thereof. 9. To the same effect is the decision of the Kerala High Court in the case of CIT v. Nidish Transport Corporation [1990] 185 ITR 669. In this case also the sole question for determination was whether the assessees were entitled to depreciation on certain vehicles used by them in their business though the vehicles purchased b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted; (b) the transferee shall, within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he resides, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration. 11. From a plain reading of this section, it is clear that this section does not deal with transfer of the ownership of any motor vehicle nor does it impose any restriction on transfer of such ownership. It simply obligates the transferor and the transferee to report within the specified time from the date of transfer the fact of transfer to the registering authority. This section, in fact, presupposes transfer of ownership of a motor vehicle. It is only after the actual transfer is effected that the obligation contemplated by this section comes into operation. Moreover, non- comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y public place. Registration is not an essential pre-requisite for acquisition of owner ship of a motor vehicle but is an obligation cast upon the owner of a vehicle for the purpose of running of the vehicle in any public place. Therefore, in our opinion, whether the buses were registered in the assessee's name or not is not very material for the purpose of this case. This may be a factor that has to be taken into consideration. But when under the agreement the new buses that were acquired by the assessee in replacement of the old buses became the property of the assessee- firm, there is no reason to hold that the asses see was not the owner of the buses because the buses were not registered in the name of the assessee. 16. Section 22(1) of the Motor Vehicles Act does not lay down that a person cannot be the owner of a motor vehicle unless the motor vehicle is registered in his name. 17. The Supreme Court had also occasion to consider this question in the case of K.L. Johar Co. v. Deputy Commercial Tax Officer [1965] 16 STC 213 and observed as follows : So far as the dealer is concerned the whole pi ice is paid by the appellant. Agreement also shows that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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