Arjun Singh v. Assistant Commissioner Of Income Tax, Circle Kota (Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 273/2018 Arjun Singh S/o Shri Tara Singh, R/o Behind Kohli Medical StoreKeshavpura Kota ----Appellant Versus Assistant Commissioner Of Income Tax, Circle Kota (Raj) ----RespondentFor Appellant(s) : Shri Hemant GuptaFor Respondent(s): HON'BLE MR. JUSTICE MOHAMMAD RAFIQ HON'BLE MR. JUSTICE GOVERDHAN BARDHAR 22/10/2018 Judgment (PER HON’BLE MOHAMMAD RAFIQ, J.) This appeal is directed against the judgement of the IncomeTax Appellate Tribunal, Jaipur dated 5.12.2017, whereby theappeal of the assessee against the order of the CIT(A) dated5.12.2017 was dismissed, thereby affirming the assessment orderdated 3.2.2016. The appellant-assessee is a sole proprietorship firm engagedin the business of civil work in the name and style of M/s. GaganStone. Appellant filed his return of Income Tax for the AssessmentYear 2009-2010 declaring income at Rs. 86,01,100 by claimingthe higher rate of depreciation on trucks/dumpers @ 30% underSection 32 read with Rule 5 of the Income Tax Rules, 1962.Assistant Commissioner of Income Tax, Circle-2, Kota on 03.01.2016 passed the assessment order for the assessment year2009-2010 under Section 143(3)/250/147 of the Income Tax Act,1961 by holding that since the assessee/appellant is not engagedin the business of running vehicles on hire, therefore, higher rateof depreciation is not allowable, hence depreciation @ 30%instead of 15% claimed by the assessee on the above mentioneditems (trucks/dumpers) is not allowable, therefore, excessdepreciation amounting to Rs. 22,77,188 claimed by the assesseeis hereby added to the total income of the assessee. Against theaforesaid assessment order dated 03.01.2016, the appellant-assessee preferred an appeal before the Commissioner of IncomeTax (Appeals), Kota. The Commissioner of Income Tax (Appeals),Kota rejected the appeal vide its order dated 05.12.2017. Againstthe aforesaid order of the Commissioner of Income Tax (Appeals),Kota the appellant-assessee preferred appeal before the IncomeTax Appellate Tribunal, Jaipur Bench, Jaipur. The Tribunaldismissed the appeal vide its order dated 06.06.2018. Hence thisappeal. Shri Hemant Gupta, learned counsel for the appellant hasargued that the CIT(A) as well as Tribunal failed to appreciate thatthe value of the trucks and dumpers, which were engaged in thebusiness of civil work, tend to depreciate quickly and at a higherrate and such trucks and dumpers in a case of civil contractorshould be considered as “machinery” and not merely motorvehicles for which there is a pre-condition that they should beused in the business of running them on hire in order to claimhigher depreciation. After taking them as “machinery”, they should be considered for higher rate of depreciation @ 30% under theprovisions of Section 32 read with Rule 5 of the Income Tax Rules,1962 to be granted to the assessee irrespective of the fact thatthe trucks and dumpers were not being used in the business ofrunning them on hire. Another argument of learned counsel for the appellant is thathigher rate of depreciation of 40% on new commercial vehiclesused in the business and profession was granted only in the years1999, 2001 and 2009 and not in the subsequent assessment yearsincluding the assessment year in question. Learned counsel insupport of this argument has relied on judgement of the SupremeCourt in D.S. Nakara vs. UOI-AIR 1983 SC 130. Learned counsel argued that the two substantial questions oflaw, which the appellant has proposed in the memo of appeal onthe basis of the aforesaid two arguments arise for considerationand therefore the appeal ought to be admitted and decided onmerits. Another argument of learned counsel for the appellant is thathigher rate of depreciation of 40% on new commercial vehiclesused in the business and profession was granted only in the years1999, 2001 and 2009 and not in the subsequent assessment yearsincluding the assessment year in question. Learned counsel insupport of this argument has relied on judgement of the SupremeCourt in D.S. Nakara vs. UOI-AIR 1983 SC 130. Learned counsel argued that the two substantial questions oflaw, which the appellant has proposed in the memo of appeal onthe basis of the aforesaid two arguments arise for considerationand therefore the appeal ought to be admitted and decided onmerits. Perusal of the impugned orders passed by the CIT(A) as alsoof Income Tax Appellate Tribunal does not indicate whether any ofthe aforesaid two arguments were raised on behalf of theappellant-assessee before either of the forums. On a pointedquery by the Court, learned counsel for the appellant hassubmitted that since these are arguments of law, they can beraised directly before this Court as the action of the respondents isviolative of Article 14 of the Constitution of India. Having heard the learned counsel for the appellant andperused the impugned order, we find that the two arguments, (4 of 4) which the appellant has raised now on the basis of which heproposed two questions of law do not arise in the facts of thepresent case as no such arguments were raised on behalf of theappellant-assessee before any of the authorities below. Perusal ofthe order passed by the CIT(A) as also of Income Tax AppellateTribunal does not reflect whether any one of these argumentswere raised by the appellant before them, therefore, sucharguments cannot be allowed to be raised before this Court for thefirst time. The Tribunal in the impugned order has relied on thejudgement of the Madhya Pradesh High Court at Gwalior in M/s.Anamay Construction Co. vs. UOI & Ors., ITA No.2/2013, whereinit was held that the assessee had engaged his own trucks fortransporting earth to facilitate laying of roads. Under suchcircumstances, the assessee cannot be said to be in the businessof hiring out his trucks for removal of earth to make him entitledfor higher rate of depreciation, as removal and transportation ofearth are only sub-processes of his main business of laying ofroads. The Tribunal on the same assumption had also relied onjudgement of the Kerala High Court in Gaylord Constructions-(2010) 190 Taxman 406 (Ker). In view of above discussion, in our considered view, noquestion of law, much less substantial question of law, arises inthis appeal. The appeal is dismissed. (GOVERDHAN BARDHAR),J (MOHAMMAD RAFIQ),J