A,Ppellantcommissionerof Incomepeputypeputy<^Tax, Circle, Korba, Chhattisgarh v. Sarabjeetsinghchhatwal

9 .^L ^.^l'^' IN THE HIGH COURT OF JUDICATURE ATBILASPUR, CHHATTISGARHTAXCASENO.^/2010 | A,ppellantCommissionerof Incomepeputypeputy<^Tax, Circle, Korba, Chhattisgarh Versus SarabjeetSinghChhatwal,Proprietor:M/sSurendraSinghChhatwal&Company,PowerHouse Raod, Korba, Chhattisgarh *°K ^^$T^-"^-INCOMEJIAX APPEAL UNDER SECTION 260-AOF THE INCOME TAX, 1961 ^.-.-^^:.__„ HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM:HON'BLE SHRI YATINDRA SINGH, C.J.HON'BLE SHRI PRITINKER DIWAKER, J. 1 TaxCaseNo.101 of 2010 AppellantSarabjeet Singh Chhatwal, KorbaVERSUS Respondent Commissjoner of Income Tax, Bilaspur 2 TaxCaseNo.71 of 2010 Appellant DeputyCommissionerofIncomeTax,Circle Korba, ChhattisgarhVERSUSSarabjeet Singh Chhatwal, KorbaCircle Korba, ChhattisgarhVERSUSSarabjeet Singh Chhatwal, Korba Respondent Appeals under Section 260A of the Income Tax Act 1961a Appearance: Shri Anand Dadariya, counsel forthe Department.Shri SR Rao and Shri MK Sinha, counsel for the Assessee. JUDGEMENT(3rd May, 2013) 1.These two appeals under section 260A of the Income Tax Act, 1961(the Act) are against the orders of the different Benches of Income TaxAppellate Tribunal (the Tribunal) in respect of the Assessment Years (AY)2004-05 and 2005-06 in respect of same assessee namely SarabjeetSingh Chhatwal (the Assessee).The Tax Case- 101 of 2010 is inrespect of AY-2004-05 by the Assessee, whereas, Tax Case- 71 of 2010isinrespect of AY 2005-06by theIncome Tax Department (theDepartment). The main question involved in both the appeals is,(the Act) are against the orders of the different Benches of Income TaxAppellate Tribunal (the Tribunal) in respect of the Assessment Years (AY)2004-05 and 2005-06 in respect of same assessee namely SarabjeetSingh Chhatwal (the Assessee).The Tax Case- 101 of 2010 is inrespect of AY-2004-05 by the Assessee, whereas, Tax Case- 71 of 2010isinrespect of AY 2005-06by theIncome Tax Department (theDepartment). The main question involved in both the appeals is, 'WhethertheAssesseeisentitledto40%or25%ofdepreciation on Tippers.' THE FACTS 2.The Assessee is a mining and transportation contractor.He enteredinto an agreement with the South Eastern Coalfields Limited (the SECL)on 24.04.2004 for removal of over-burden and transporting the soil to theplace indicated by the SECL.He filed his return for the relevant yearsclaiming 40% depreciation on Tippers involved in the work claiming benefit of Appendix-1 under rule 5 part lll(3)(ii) of the Income Tax Rules(theRules). 3.The Assessing Officer (the AO) by his orders dated 31.03.2005(AY 2004-05) and 23.02.2007 (AY 2005-06) held that the Assessee wasentitled to 25% of depreciation under rule 5 Appendix-1 part 111(1) ratherthan 40% under part lll(3)(ii) ofthe same Appendix. 4. Against the aforesaid orders, the Assessee filed appeals.The^ weredismissed by the Commissioner of Income Tax (Appeats) (the CIT-A) on23.08.2005 and 06.05.2008.dismissed by the Commissioner of Income Tax (Appeats) (the CIT-A) on23.08.2005 and 06.05.2008. 5. The Assessee filed his second appeal before Jabalpur bench of theTribunal in respect of AY 2004-05.It was dismissed on 16.05.2006upholding the orders of the authorities below.He filed miscellaneousapplication to review this order.It was also dismissed on 30.07.2009.Hence, Tax Case-101 of 2010. 6. The appeal of the Assessee in respect of AY 2005-06 was allowed bythe bench of the Tribunal at Bilaspur on 20.01.2010 on the basis ofdivisionbenchdecisionof thisCourtinTaxCase-24of 2006(Commissioner of Income Tax,Bilaspur VsIncome Tax AppellateTribunal and Rajesh Kumar Murarka) (the Murarka case) decidedv on20.10.2009. Hence the Tax Case- 71 of 2010 by the department. POINT INVOLVED 7. We have heard counsel for the parties. 8. Tax Case- 101 of 2010 was admitted on the following substantialquestion of law:question of law: 'Whetherin the facts andcircumstances of the case,thein the facts andcircumstances of the case,theAppellant was entitled to depreciation of 40% or 25%.' 6. The appeal of the Assessee in respect of AY 2005-06 was allowed bythe bench of the Tribunal at Bilaspur on 20.01.2010 on the basis ofdivisionbenchdecisionof thisCourtinTaxCase-24of 2006(Commissioner of Income Tax,Bilaspur VsIncome Tax AppellateTribunal and Rajesh Kumar Murarka) (the Murarka case) decidedv on20.10.2009. Hence the Tax Case- 71 of 2010 by the department. POINT INVOLVED 7. We have heard counsel for the parties. 8. Tax Case- 101 of 2010 was admitted on the following substantialquestion of law:question of law: 'Whetherin the facts andcircumstances of the case,thein the facts andcircumstances of the case,theAppellant was entitled to depreciation of 40% or 25%.' 9.Tax Case- 71 of 2010 was admitted on the following two substantialquestions of law:questions of law: ^~''- 'Whether the ITAT, Bilaspur was justified in allowing the relief tothe assessee inspite of facts on records that there was nochange in the nature of work and receipts of the Assessee aswasin the previous year in which theITAT,Bilaspur hasconfirmed the disallowance of higher rate of depreciation. Whether the ITAT, Bilaspur was justified in allowing the higherrate of depreciation inspite of the facts on records that thebusiness of the Assessee was not of running trucks on hire.' 10. Tax Case- 101 of 2010 was admitted on one substantial question oflaw, whereas Tax Case- 71 of 2010 was admitted on two substantialquestions of law.However, the basic question is as the one that hasbeen pointed out in the opening paragraph of the judgement. THE DECISION 11. The counsel for the Department submits that: (i) Tippers are not covered under rule 5 Appendix-1 part lll(3)(ii) of theRules;Rules; (ii) The Assessee is covered under rule 5 Part 111(1) ofthe Rules, andnot under part lll(3)(ii) of the Rules.He is entitled to 25%depreciation ratherthan 40%.not under part lll(3)(ii) of the Rules.He is entitled to 25%depreciation ratherthan 40%. 1stSubmission 12. Partlll(3)(ii) of the Rules uses the words 'motor buses, motor lorriesand motor taxies'.Lorry is a vehicle to carry heavy load.This is usedmore in generic sense rather than any specific sense.It includes allkinds of vehicles that are used for carrying heavy load. 13. Tipper is a kind of truck to carry heavy load that can be unloaded bylifting the back portion with a hydraulic lift. It is covered in the word motorlorry.This was also so held by a division bench of Punjab & HaryanaHigh Court in Commissioner of Income Tax Vs Rakesh Jain {(2012) 70DTR(P&H) 1}. <l •i/ C1 2nd Submission 14. The decision of the division bench of this Court in the Murarka caseis based on the decision of the Bombay High Court in Commissioner ofIncome Tax Vs SC Thakur an Brothers {(2009)180 Taxman 348 (Bom)}(the Thakur case). 15. In the Thakur case, the Bombay High Court after considering thecircular of the Boardheld that higher rate of depreciationis alsoadmissible when motor lorry is used by the Assessee in his own businessof transportation of goods on hire. 16.In the Murarka case,similar kind of contract with the samecontractee namely SECL was involved where the division bench of thisCourt relyingupon the decisionin the Thakur case held that theassessee in that case was entitled for higher rate of depreciation in hisown business of transportation of goods on hire.So is the case here.The Assesseeisentitledtobenefit of Appendix-1partlll(3)(ii) ofthe Rules. 17.In our opinion the Assessee is entitled to 40% depreciation ontippers as held in AY 2005-06 rather than 25% as held in AY 2004-05. 18. In viewofabove: (i) Tax Case- 101 of 2010 filed by the Assessee is allowed andorders of the Tribunal as well as the authorities below are setaside;orders of the Tribunal as well as the authorities below are setaside; (ii) Tax Case- 71 of 2010 filed by the Department is dismissed andthe order of the Tribunal is upheld.the order of the Tribunal is upheld.