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TMI Blog2023 (12) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Shri Vinod Kumar, Sr-DR ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the Revenue, pertaining to assessment year 2013-14, is directed against the order passed by the National Faceless Appeal Centre, Delhi, [ NFAC/Ld.CIT(A) for short] dated 24.05.2023, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) r.w.s. 263 of the Income Tax Act, 1961 (in short the Act ), dated 28.08.2018. 2. The grounds of appeal raised by the Revenue are as follows: 1. On the facts and circumstances of the case and in law, ld. Learned CIT(A) has erred in directing the Assessing Officer to allow depreciation @ 30% on machineries instead of eligible rate of 15%. 2. On the facts and circumstances of the case and in law, the learned CIT(A) has erred by allowing the depreciation @ 30% on crawler cranes amounting to Rs. 1,32,63,680/- instead of eligible depreciation @ 15%, as the cranes are do not fall under the category of Heavy Motor Vehicles. 3. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in allowing the claim of the higher depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crane and is not being mounted on truck the RTO tax is being paid for the same. A copy of purchase bill as well as receipt for payment of RTO tax is enclosed herewith for your reference and record. 02. Grove GMK 3050-50 MT Crane. This old crane was purchased for Rs. 1,25,00,000/- on 07.08.2012 and was capitalized for Rs. 1,25,00,000/-. Further please note that this crane is not a crawler crane but the same is mounted on a truck and a recurring amount RTO tax is being paid every year and the same is debited to Crane Running Expenses in the books of account. A copy of purchase bill and a copy of receipt for payment made to RTO are enclosed herewith for your reference and record. A photo of the crane is also enclosed for your ready reference please. Sir, we hope the above will clear all doubts at or end. We hope you will consider the matter and will do the needful. 4. However, the Assessing Officer rejected the claim of the assessee and stated that the assessee was eligible for depreciation @15% and not @30% on these cranes. Therefore, Assessing Officer disallowed the excess depreciation claimed by the assessee on above two cranes i.e. Rs. 1,32,63,580/- and made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- per every 1000 kgs or part thereof exceeding 2000 kgs. Further, assessing officer has also noticed that the assessee has not debited any amount against RTO tax in its Profit Loss account for the year under consideration though following capitalization method for sale value of cranes. The assessee-company has not submitted anything in its reply against the show cause notice issued by the assessing officer. Hence, addition made by the Assessing Officer may be confirmed. 8. On the other hand, Ld. Counsel for the assessee defended the order passed by NFAC/Ld. CIT(A). The Ld. Counsel submitted that assessee is entitled to claim the higher depreciation where assessee was in business of hiring out of cranes, even if, such cranes were also used for personal construction business, same would not disentitle the assessee to claim higher depreciation. The Ld. Counsel also stated that where mobile crane may be registered on motor truck, used in business of running on hire, and registered as on heavy motor vehicle, would fall within expression motor lorries and hence, the assessee is entitled to claim depreciation at a higher rate. 9. After giving our thoughtful consideration to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based, e.g., whether a certain property is trust property or not, it has nothing to do with the fluctuations in the income; such questions if decided by a Court on a reference made to it would be res judicata in that the same question cannot be subsequently agitated. 14. One of the decisions referred to by the Full Bench was the case of Hoystead Ors. v. Commissioner of Taxation 1926 AC 155. Speaking for the Judicial Committee Lord Shaw stated: Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be proper apprehension by the Court of the legal result either of the construction of the document or the weight of certain circumstances. If this were permitted litigation would have 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, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 ITR 318. 27. In the first of the above judgements, it was held that although the doctrine of res judicata did not strictly apply to the income-tax proceedings, yet in order to maintain consistency, the Revenue cannot be permitted to rake up stale issues all over again merely because the scope of appeal is wider than the scope of reference. In this case, the assessee had been granted exemption under section 11 for a long period of years and without there being any change in the objects or activities of the assessee, the income-tax authorities sought to deny the exemption in a later year. In the case of Neo Polypack (P.) Ltd. (supra), it was held that although the doctrine of res judicata is not applicable to the income-tax proceedings since each assessment year is independent of the other, yet where an issue has been considered and decided consistently in a number of earlier years in a particular manner the same view should continue to prevail in the subsequent years unless there is some material change in the facts. In the case of Allied Finance (P.) Ltd. (supra), the Tribunal had decided an issue in favour of the assessee by two orders and those two orders were followed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment years in respect of the same issue. 32. The Supreme Court in the case of Excel Industries Ltd. (supra) observed as under : 28. Secondly, as noted by the Tribunal, a consistent view has been taken in favour of the assessee on the question raised, starting with the assessment year 1992-93, that the benefits under the advance licences or under the duty entitlement pass book do not represent the real income of the assessee. Consequently, there is no reason for us to take a different view unless there are very convincing reasons, none of which have been pointed out by the learned counsel for the Revenue. 29. In Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) this court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same fundamental aspect permeates in different assessment years. In arriving at this conclusion, this court referred to an interesting passage from Hoystead v. Commissioner of Taxation [1926] AC 155 (PC) wherein it was said (page 328 of 193 ITR) : Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l question concerning us is the year in which the assessee is required to pay tax. There is no dispute that in the subsequent accounting year, the assessee did make imports and did derive benefits under the advance licence and the duty entitlement pass book and paid tax thereon. Therefore, it is not as if the Revenue has been deprived of any tax. We are told that the rate of tax remained the sane in the present assessment year as well as in the subsequent assessment year. Therefore, the dispute raised by the Revenue is entirely academic or at best may have a minor tax effect. There was, therefore, no need for the Revenue to continue with this litigation when it was quite clear that not only was it fruitless (on merits) but also that it may not have added anything much to the public coffers. 33. Thus, in view of the above, in our opinion, the disallowance is not sustainable. The Revenue has tried to dismiss the entire issue in the name of a mistake but it does not appear to be a mistake. We are saying so, because even independent of the principle of consistency, the assessee has a good case on merits. 34. We fail to understand as to on what basis the Revenue authorities h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies holding that since 'cranes' are not mentioned as independent item in Appendix 1, depreciation at the rate of 40% was not admissible to cranes, and that only the rate of 10% was admissible being the general rate applicable to machinery. The Tribunal, rejected the plea of the assessee that crane was an integral part of the motor lorry on which it was mounted and was worked by the same machine which provided traction to the lorry, on the ground that this required ascertainment of facts and fresh investigation. The Tribunal also rejected the assessee's contention that benefit of depreciation at 30% should be given to it since it was given to 'fork-lift trucks' under Instructions No. 617 issued on 13-9-1973 by the C.B.D.T. classifying 'fork-lift trucks' under item III (ii-D 9) of Appendix 1. Under the heading 'Machinery and plant' of item III of Appendix 1, Part I of the Table of Rates at which depreciation is admissible, read with Rule 5 of the Income-tax Rules, various items of machinery and plant are specified with the rates at which depreciation is to be allowed as are mentioned against them. The assessee claimed depreciation at 40% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red delivery wagon with a single-cylinder six-horsepower engine. In World War I motor trucks were widely used, and in World War II they largely replaced horse-drawn equipment. A notable vehicle was the four-wheel-drive, quarter-ton-capacity, short-wheelbase jeep, capable of performing a variety of military tasks. Lorry or truck would, therefore, mean not only any motor vehicle designed to carry freight or goods but also to perform special services like fire fighting. Fire engine also called fire truck is a self propelled mobile piece of equipment used in fire fighting. There can be other special services to be performed by motor vehicles designed for such services. Thus, a lorry i.e. truck adapted or designed to carry a crane is meant for special services of lifting load, moving it side by side, rotating it or moving it horizontally. Most industrial trucks permit mechanized pickup and deposit of the loads, eliminating manual work in lifting as well as transporting. The crane truck is a portable boom crane mounted on an industrial truck. It may be used with hooks, grabs, and slings for bundled or coiled material. Industrial trucks which would also come within the expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rucks' (also called 'motor lorries'). The word 'crane' when used for an inanimate object means a machine for moving heavy objects usually by suspending them from a projecting arm or beam. Crane is any of a diverse group of machines that not only lift heavy objects but also shift them horizontally. Movable cranes are mounted on railway cars, motor trucks or chassis equipped with caterpillar treads and the hoisting machinery is mounted so as to counterpoise part of the load on the boom and thereby, preventing the entire crane from overturning while carrying the load. The fork lift truck, widely used for moving goods between warehouse storages and shipping vehicles, is a highly manoeuvrable crane adaptable to handling drums, crates, or loaded skids or pallets. (See Encyclopedia Britannica under the heading `crane'). Thus, a 'fork-lift truck' is also a type of crane. The expression 'truck crane' is well known in the truck industry. The truck crane is a unit consisting of a crane house and boom mounted on a truck chassis,.......Originally assembled by contractors from crawler cranes and truck parts, the truck crane for years been manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carriage of freight when transported, as was suggested on behalf of the Revenue, will not be decisive. Unloading, in the context of truck crane where the crane remains mounted and attached to the truck when carried and even at the destination where it is put to use is not a relevant factor at all. Though not required to be loaded or unloaded like other goods transported in carriage of freight, the crane remains fixed, mounted on the truck which has been adapted for use solely for its carriage and such truck crane is used for special service of lifting and moving heavy objects. This is why such mobile crane is registered as a heavy motor vehicle which is a heavy goods vehicle as defined in section 2(16) of the Motor Vehicles Act. The approach of the Tribunal and the authorities below it that cranes are not mentioned specifically as an independent item falling in the categories for which higher depreciation allowance at the rate of 40% when used for hire and at 30% when not so used has been provided as against 10% of machinery in general, and therefore, they should be treated as falling in the general category of machinery, is an over-simplification of the matter. The approach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed by the Supreme Court in R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (at page 578) has different meanings in different contexts and in certain circumstances even a lessee may be considered as the owner of the property leased to him. It was also held to be so by the Bombay High Court in CIT v. Alpana Talkies [1983] 139 ITR 1055. It was a case of a lease of a theatre for exhibiting films. Under the lease agreement, the lessee was to keep the theatre in good condition and make all repairs and the premises were to be surrendered with the fittings and fixtures and additions and alterations on the expiry of the lease period. The assessee demolished the theatre and constructed a new one during the period January-July 1962. In respect of the assessment years 1964-65 to 1969- 70, the assessee claimed depreciation in respect of the theatre building, furniture and fixtures, plant, etc. The claim was rejected by the Income-tax Officer on the ground that the lessor had not divested himself of the ownership of the land and the building. The Appellate Assistant Commissioner and the Tribunal decided in favour of the assessee and held that the assessee was entitled to depreciation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in CIT v. Steelcrete (P.) Ltd [1983] 142 ITR 45. This too was a case of rejection of a claim to depreciation and development rebate under sections 32 and 33 of the Act. The controversy was whether the assets in question were owned by the assessee and used for the purpose of business . There was no real dispute in regard to the user of the assets for the purpose of the business. The sole question for determination was whether the machinery in question could be considered to be owned by the assessee for the purpose of section 32 of the Act. Relying upon the observations of the Supreme Court in R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570, the High Court observed that though the machinery in respect of which the depreciation was claimed stood in the name of the Government of India, to all real intents and purposes and also for purposes of section 32 of the Income-tax Act, 1961, it was intended that the property and the goods should pass to the assessee at the relevant time. Read in this context, it was held that the assessee owned the machinery in question and was entitled to depreciation. 8. Reference may also be made to another decision of the Calcutta High Court in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the decisions of the Calcutta High Court and the Kerala High Court which relate to the transfer of motor vehicles referred to above leave no scope for doubt that the transfer of ownership of a vehicle is not dependent upon the transfer of ownership being recorded under the Motor Vehicles Act. Section 31 of the Motor Vehicles Act, 1939 (corresponding to section 50 of the Motor Vehicles Act, 1988), so far as relevant, reads: 31. (1) Where the ownership of any motor vehicle registered under this Chapter is transferred, (a) the transferor shall - (i) within fourteen days of the transfer, report the fact of transfer to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; (ii) within forty-five days of the transfer forward to the registering authority referred to in subclause (i)-- (A) a no objection certificate obtained under section 29A; or (B) in a case where no such certificate has been obtained, (I) a receipt obtained under sub-section (2) of section 29A; or (II) a postal acknowledgement received by the transferor if he has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, machinery, plant or furniture unless he is the owner of the same (sic). Sub-section (1A) of section 32, which came into effect from 1-4-1971 provides an exception to this rule but this sub-section is confined to buildings only and does not extend to plant, machinery or furniture. But there is no provisions under the Motor Vehicles Act which requires registration of a motor vehicle in the name of a person for the purpose of acquisition of ownership of the vehicle. Section 22(1) of the Motor Vehicles Act which requires registration of motor vehicles is in the following terms : (1) No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place for the purpose of carrying passengers or goods unless the vehicle is registered in accordance with this chapter and the certificate of registration of the vehicles has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner. 15. The provision of this section does not prevent a person from becoming an owner of a motor vehicle without registration. On the contrary, the section ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 22(1) of the Motor Vehicles Act, is ownership of a motor vehicle. Unless a per son is owner of a motor vehicle he is not entitled to get it registered in his name under section 22(1) of the Motor Vehicles Act. The Tribunal in this case has come to the conclusion on a review of the facts and also of the agreement that the assessee was the owner of the five new buses and as such was entitled to claim depreciation allowance on these buses. The Tribunal has not committed any error of law in coming to this conclusion. The requirement of section 34 of the Act, is that the vehicles must be 'owned by the assessee'. This section does not require that the assessee must be a registered owner of the vehicles in order to claim depreciation allowance in respect of them. We are of the view that on the facts of this case the new buses were owned by the assessee within the meaning of section 32 and the assessee was entitled to claim depreciation allowance on these vehicles. 40. At this stage, we may also look into the decision of this Court in the case of Dy. CIT v. Pradip N. Desai (HUF) [2012] 21 taxmann.com 151/341 ITR 277 (Guj.), wherein this Court took the view that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 30 per cent. Heading III (ii) D(9) which is referred to in the aforesaid Instruction No. 617 which relates to fork-lift truck, reads as under : (9)Motor buses and motor lorries other than those used in a business of running them on hire. 11.3 In the year 1973, the Group D(9) reads as under : (9)Motor buses, motor lorries, motor taxis, motor tractors. 12. 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 context, would mean, a motor truck . As per the Encyclopaedia Britannica, truck is also called lorry . Thus, the expression motor lorries in heading III E(1A) of Part I of Appendix I would mean motor trucks . 12.1 Truck is introduced in following terms in the Encyclopaedia Britannica : Truck also called LORRY is any motor vehicle designed to carry freight or goods or to perform special services such as fire fighting. The truck was deri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el 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 loads. Fork-lift trucks are quipped with a forklike mechanism on the front end designed to pick up loads on specially designed platforms, called pallets, elevate the load to the desired height, transport it, and deposit it at the desired location and height. Ram trucks have a single protruding ram for handling coiled material. The crane truck is a portable boom crane mounted on an industrial truck; it may be used with hooks, grass and slings for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in Appendix I 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 wellknown machinery which can easily move over roads and highways and is not a stationary equipment. 13.3 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 hydraulically. Truck cranes make up in mobility and ease of transport what they lack in hoisting capacity. [Emphasis supplied] 14. Thus, a mobile crane mounted on a truck constitutes a single unit known as a truck crane which is adapted for use upon roads for special services. The truck on which the crane is mounted is constructed and adapted specially to carry the crane. 14.1 Goods carriage as defined in section 2(14) of the Motor Vehicles Act, 1988 means any motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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. 16. 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 heading III E(1A) of the Table in Appendix I under rule 5, since it was used by the assessee in its business of running the crane on hire. 16.1 We, therefore, hold that the Tribunal was not right in holding that the assessee was not entitled to depreciation at the rate of 40 per cent on crane mounted on motor truck. The question referred to us is, therefore, answered in the negative in favour of the assessee and against the revenue. The reference stan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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