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TMI Blog1991 (8) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ssors on the ground that it was an earth moving machinery. It was submitted before the ITO that the assessee had undertaken construction of dam on the site and the work of construction involved activity of removing earth and that air compressor was one of such machineries. The ITO observed that machineries for removing earth would be tractors, shovels, scrapper dozer, dumper, etc., which actually dig out the earth and remove the earth therefrom. According to him, in real practice, air compressor was used for carrying out blast operations and it was not actually used for digging out activity or removing earth and, hence, assessee's claim for higher depreciation on air compressor was not tenable. He, accordingly, allowed depreciation at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Deptl. Representative was that the only function of this machinery was that of drilling or digging holes and that it could not be regarded as earth moving machinery. According to him, the earth which came out as a result of drilling was removed with the help of other machinery. We are unable to accept this submission. It is admitted by the ITO in the assessment order that air compressor was used for carrying out plant operations. The purpose of blast operations was to remove the hard earth. The hard earth is blasted with the object of removing the same. This is done in the course of construction of dam. The only activity of the assessee was construction of dam. The assessee was not engaged in drilling operations. The air-compressor was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, the ITO disagreed with the view expressed by the Tribunal in said decision. The ITO held that the trak shovel was an automobile used for shifting earth during the course of construction activity and the same had been registered under the Motor Vehicles Act and that the nature of work carried on by this machinery was akin to that carried on by the tractors and trucks with basic difference that those vehicles were comparatively light while the trak shovel was comparatively heavy. According to the ITO since trak shovel was a motor vehicle, investment allowance was not allowable. He, accordingly, rejected the claim for investment allowance. 7. In the appeal filed by the assessee the CIT(A) observed that the main work of trak shove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery used in the relevant year in said construction as laid down in the decision of the Special Bench of the Tribunal in the case of ITO vs. Hydel Constructions Pvt. Ltd. (1984) 41 CTR (Trib) 17 (Del) (SB) : (1984) 20 TTJ (Del) 518 (SB) : (1983) 6 ITD 575 (Del) (SB). The same view had been earlier taken by a Bench of the Tribunal in the case of Progressive Engineering Co. vs. ITO (1983) 3 ITD 172 (Hyd). Reliance had been placed in said decision on the decision of Orissa High Court in CIT vs. N.C. Budharaja Co. (1980) 121 ITR 212 (Ori) and also decision of Delhi High Court in National Projects Construction Corporation Ltd. vs. CWT (1969) 74 ITR 465 (Del) and decision of Calcutta High Court in National Planning and Construction Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds or persons. It has been designed to remove earth from the site. It is not akin to an ordinary dumper. From the material on record, we find that trak-shovel in question was not a road transport vehicle and as such proviso to s. 32A(1) under which investment allowance is disallowable in respect of road transport vehicles is not applicable. The decision in the case of Shiv Constructions on which the learned departmental representative has placed reliance is of no assistance in the present case. In that case, the assessee had claimed development rebate on dumpers. The ITO had held that dumpers were road transport vehicles and as such development rebate was not allowable. The Tribunal had held that the dumpers were used for the purpose of con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles it recorded the same decision as far as depreciation was concerned. Thus, the two decisions of Gujarat High Court referred to above are not authority for the proposition that dumpers were road transport vehicles. The two cases were decided on the basis of concession made by the learned counsel for the assessee. Consequently, the said decisions are not of any assistance to the Department. Besides, as we have already observed the trak-shovel in the present case is not akin to dumpers. Its function is essentially that of removing the earth and not that of transporting persons or goods. Consequently, it could not be regarded to be a road transport vehicle. The decision of Bombay High Court in the case of Shah Construction Ltd. relates ..... X X X X Extracts X X X X X X X X Extracts X X X X
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