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TMI Blog2020 (8) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... on business and he has achieved huge turnover but without using of these heavy/light machineries/vehicles huge turnover cannot be achieved. If the assessee uses partly for own use and for hire charges he is not entitled to claim excess depreciation as per the provisions of the Income Tax Act. The rule for charging higher depreciation has been prescribed only for the vehicles which are running on hire. Respectfully following the above judgment of ANUPCHAND AND CO. [ 1999 (6) TMI 25 - MADHYA PRADESH HIGH COURT] the assessee is not eligible/entitled for the claim of excess depreciation on impugned 14 items as mentioned by the AO in his order. In the peculiar facts and circumstances of the case, the case laws and circular relied on assessee are not applicable in the present case in hand but the case laws cited by the ld. CIT-DR support the case to the extent of their applicability in the present case. - Decided against assessee. - ITA No.280/CTK/2017 - - - Dated:- 18-8-2020 - Shri C.M. Garg, JM And Shri L.P. Sahu, AM For the Assessee : Shri P.K.Mishra, Advocate For the Revenue : Shri M.K.Gautam, CIT-DR ORDER PER L.P.SAHU, AM: This is an appeal filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d A.O that vehicles against which depreciation claimed @30% are not motor lorries and further the vehicles were not actually given on hire, particularly when, both findings are contrary to the statutory provisions of law and the Appellant is lawfully entitled for depreciation @30% on those vehicles. Impugned addition thus, being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. That, it may be respectfully submitted here that, these two grounds go to the root of the case, it needs to be admitted for hearing in the interest of justice. If these two grounds are not admitted and not adjudicated, then the Appellant Company will be highly prejudiced and will suffer from irreparable loss and injury, Hence the; PRA YE R Under the facts and in the circumstances stated above, it is therefore respectfully prayed that, this Hon'ble Tribunal shall be graciously pleased to consider the genuine difficulties faced by the Appellant Company and be further pleased to accept these additional and revised grounds taken here in the revised grounds of Appeal for adjudication in the interest of justice. And for this Act of kindness, the Appellant Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of depreciation with supportive evidences and legal pronouncements has not been accepted by the learned Assessing Officer on preconceived notion and without application of judicious mind. 7. That, the Appellant craves, leave to add or to amend the grounds before or at the time of hearing of this appeal. 4. On perusal of the all the above grounds, we found that the grounds raised by the assessee in the form of additional/revised grounds are already exist in the grounds raised by the assessee in Form No.36, therefore, the grounds taken by the assessee in Form No.36 are taken into consideration and are being decided in the ensuing paragraphs. In all the above grounds i.e. either in the additional/revised grounds or in the grounds raised in Form No.36, the sole issue involved is regarding claim of additional depreciation on certain assets/machineries. 5. The assessee has taken total five grounds out of which ground No.1 is general in nature and ground No.4 is residuary ground. Therefore, these grounds are not required to be adjudicated. 6. Now, we proceed to decide the remaining grounds raised by the assessee in the present appeal. 7. Brief facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and machinery . On review of accounts it is seen that the company has charged depreciation on certain items wrongfully as excess then the rate allowed and in some cases the depreciation has been charged at a lower rate than the allowed rate. This is claim has been made by mistake with a presumption that the assessee company is entitled for a depreciation at a higher rate higher rate when the plant and equipment are given on hire , accordingly depreciation has been wrongly charged . We are enclosing here with correct computation of depreciation which is prescribed by the Act with the photograph of the Motor lorries and Motor taxies on the basis of which the depreciation may please be allowed as annexure-1 to the submission .The photographs of such motor lorries which are entitled for a higher depreciation is also given as under for your kind consideration. Since the Motor lorries and Motor taxies were used for running them on hire depreciation @30%, which is in line of the rate of depreciation as prescribed under the Income Tax Act, 1961 may pleas be allowed. The relevant schedule showing the rate of depreciation is attached here with for your reference as annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n examined by the qualified Chartered Accountant and no any adverse remarks have been pointed out by him regarding additional claim of depreciation. Further he has submitted that the trucks, tippers, schwing stetter, mobile concrete mixture, ashok Leyland Taurus, conmat concrete paver are in the nature of motor buses, motor lorries and motor taxies and registered as per the Motor Vehicles Act, 1988. The assets were given on hire and the income from which have been credited under the head hire charges. Ld. AR filed paper book containing pages 1 to 18 and in support of his arguments, ld. AR relied on CBDT Circular No.609, dated 29.07.1991. He also relied on the decision of coordinate bench of the Tribunal in the case of M/s Sainik Mining and Allied Services Limited, I.T.Appeal No.30008(Del) of 2007, order dated 29.01.2010 and in the case of M/s Bothra Shipping Services ITA No.586/Kol/2010, order dated 16.07.2010. 13. On the other hand, ld. CITDR strongly opposed the claim of the assessee that the assets were given on hire or can it be given on hire on certain assets which are clearly as per the pictures of the machineries mentioned in the assessment order. The assessee should h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent order at page 12, the AO has already gone through the submissions made by the assessee and after considering the same has observed that the assessee failed to establish that the vehicles were used on hire basis on the following reasons :- i) No agreement was made for giving the vehicles on hire. ii) As claimed by the assessee vehicles were given on hire, to the subcontractors, but no bills and details of hire charge payments were produced to substantiate the claim of the assessee. iii) Assessee claimed that instead of showing hire charges as income it had been credited to the accounting head 'hire charges' and furnished ledger copy of the same, but nowhere in the details it was mentioned that, only 'motor lorries' were given on hire. There is possibility that item forming part of the plant and machinery other than 'motor vehicles/buses/lorries would have been given on hire. The onus lies on assessee to prove that only vehicles eligible for higher depreciation were given on hire. iv) Referring to CBDT circular no. 609 dated 29-07-1991 assessee has claimed that it is using the vehicles for transporting of goods of the third person that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4844691 3418032 1426659 Mobile concrete Mixture 30% 1456832 1075750.52 381081.48 Ajax-2000 15% 220408 162495 57913 EC- 290(Engine) 15% 127715 94157 33558 Conmat Concrete Paver 30% 1004299 761203.68 243095.32 Ex-200 15% 84158 96920 -12762 Schwing Stetter 30% 497066 366459.09 130606.91 Hyundai EX-370 15% 1024590 755374 269216 JCB Machine 15% 97296 106392 -9096 TOTAL 12084447 8742262.29 3342184.71 The CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle; 25. motorcab means any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward; 26. motor car means any motor vehicle other than a transport vehicle, omnibus, road-roller, tractor, motor cycle or invalid carriage; x x x 28. motor vehicle or vehicle means any mechanically propelled vehicle adapted for use upon roads whether the power of 1 Subs. ins. by Act. propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding thirty-five cubic centimetres; 16. From the above provisions of the Motor Vehicles Act, the assessee was required to obtain registration from some assets as is clear from the picture of the assets showing in the assessment order but the assessee also did not produce any registration certificate before us as to whether the assets are registered as a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation at 40 per cent. on the trucks which was allowed by the Income-tax Officer, but subsequently the Commissioner of income-tax exercising his power under section 263 of the Income-tax Act came to the conclusion that the rate of depreciation at 40 per cent. is allowable only when the assessee was carrying on the business of running trucks on hire, accordingly, the reference was answered by the court in favour of the Revenue and against the assessee. Similar view was taken in another decision of the Rajasthan High Court in the case of CIT v. Manjeet Stone Co. [1991] 190 ITR 183. The Karnataka High Court has also taken the same view in the case of Veeneer Mills v. CIT [19931 201 ITR 764 , wherein the assessee was a manufacturer of plywood and used to transport the timber which is the raw material in the manufacture of plywood through its own lorries. The dominant purpose of these lorries was the transportation of the material belonging to the assessee in connection with its manufacturing work. However, on some occasions, when the lorries were idle, they were given on hire. In this case, their Lordships observed that the facts speak for themselves. The provision is only a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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