Pr. Commissioner Of Income Tax , Ajmer v. Shri Amar Singh Bhandari

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. .. D.B. INCOME TAX APPEAL NO. 110/2018. Pr. Commissioner Of Income Tax , Ajmer. ----Appellant Versus Shri Amar Singh Bhandari, C/o Harsh Palace, Old RTO Road,Gandhi Nagar, Bhilwara (Rajasthan). ----Respondent For Appellant(s) : Mr. K.K. Bissa. Mr. H.G. Chanda. HON'BLE MS. JUSTICE NIRMALJIT KAUR HON'BLE MR. JUSTICE DINESH MEHTA 19/07/2018 Order The present appeal under Section 260-A of the Income TaxAct, 1961 is directed against the judgment and order dated14.09.2017 passed by the Income Tax Appellate Tribunal, JodhpurBench, Jodhpur (hereinafter referred as the ‘Tribunal’) by which,the assessee’s appeal was allowed. Briefly stated the facts within the precincts of the questionscanvassed before this court are that the assessment of therespondent-assessee for the Assessment Year 2011-2012 wascompleted on 03.08.2015. During the course of assessmentproceedings, the Assessing Officer disallowed depreciation to thetune of ` 12,03,668/-, as claimed by the assessee on dumper andVolvo, inter alia, observing that the higher rate of depreciation (30%) was not permissible, as the assessee had his own miningbusiness also. Against the disallowance of the depreciation aforesaid, theassessee filed an appeal which came to be rejected by theCommissioner (Appeals) (hereinafter referred to as the “AppellateAuthority”), vide his order dated 13.12.2016. The AppellateAuthority repelled the assessee’s contention and affirmed theaction of the Assessing Officer (AO) in confining the claim of thedepreciation. He, however, additionally observed that the higherrate of depreciation was applicable only for motor buses, motorlorries and motor taxies used in the business of renting them onhire. Against the aforesaid order dated 13.12.2016 passed by theAppellate Authority, the assessee preferred second appeal beforethe Tribunal, which has been allowed, vide the order impugned.The learned Members of the Tribunal, while relying upon variousjudicial pronouncements held that the expression ‘motor lorry’used in the Appendix-1 includes ‘dumper’ and the ‘Volvo Machines’also. Mr. K.K. Bissa, learned counsel for the appellant questioningthe legality of the order under challenge, contended that theassessee has his own mining business and the subject dumperand Volvo were used by the assessee in his own business, forwhich, he is not entitled for higher rate of depreciation, asclaimed. Having heard learned counsel for the appellant and afterperusal of the impugned order dated 14.09.2017, we are of thefirm view that neither any substantial question of law arises forour consideration nor does the order suffer from any infirmity. The Income Tax Appellate Tribunal and the authorities belowhave found, as a matter of fact, that the subject motor vehicleswere used by the assessee for his own mining purposes as well asgetting rent by giving them on hire. Contention of Mr. Bissa, that with a view to claim higher rateof depreciation, the vehicles should be exclusively used on hireand reward, cannot be accepted. The language used in Item No.(iii) of Appendix-1 to the Rules do not make it obligatory for theassessee to use vehicles/machines exclusively for hire and reward.For ready reference, the relevant excerpts of the Rules is quotedhere-in-below:- “III.Machinery and Plant (1)Machinery and plant other than those covered by sub-items (2), (3) and (8) below:(2), (3) and (8) below: (2)Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1[st] day ofApril, 1990them on hire, acquired or put to use on or after the 1[st] day ofApril, 1990 (3)(i) …………………… ……………. …………….. (ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire business of running them on hire “III.Machinery and Plant (1)Machinery and plant other than those covered by sub-items (2), (3) and (8) below:(2), (3) and (8) below: (2)Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1[st] day ofApril, 1990them on hire, acquired or put to use on or after the 1[st] day ofApril, 1990 (3)(i) …………………… ……………. …………….. (ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire business of running them on hire (iii) Commercial vehicle which is acquired by the assesseeon or after the 1[st] day of October, 1998, but before the1[st] day of April, 1999 and is put to use for any periodbefore the 1[st] day of April, 1999 for the purposes ofbusiness or profession in accordance with the thirdproviso to clause (ii) of sub-section (1) of Section 32[See Note 6 below this Table]”on or after the 1[st] day of October, 1998, but before the1[st] day of April, 1999 and is put to use for any periodbefore the 1[st] day of April, 1999 for the purposes ofbusiness or profession in accordance with the thirdproviso to clause (ii) of sub-section (1) of Section 32[See Note 6 below this Table]” It is not in dispute that the assessee has earned rentalincome from these vehicles. The requirement of the provisionstands satisfied, in wake of such finding recorded by none otherthan the Assessing Officer himself. The Commissioner (Appeals) has tried to non-suit theassessee on the ground that the subject dumper and Volvo do notfall within the expression of motor buses, motor lorries and motortaxies, as provided in Entry No. III (3)(ii) of Part-A of Appendix-1.It is pertinent to note that the depreciation for motor buses,motor lorries and motor taxies has been provided under theHead-IIIMachinery and Plant, wherein Clause (ii) of EntryNo.III (3) deals with the motor buses, motor lorries and motortaxies, while Clause 3(iii) concerns with commercial vehicles. Assuch, if the vehicles in question are not held to be falling in sub-clause (ii) of Clause (3), they would well fall in sub-Clause (iii) ofthe Clause 3 of Entruy No. III of Appendix-1, entailing evenhigher rate of depreciation to the assessee. The expression used in sub-clause (ii), namely motor buses,motor lorries and motor taxies is having wide amplitude and theterm motor lorries used therein, would take in its sweep thesubject vehicles, i.e., dumper and Volvo. In view of the above discussion and in view of the finding asrecorded by the Assessing Officer himself, that the vehicles inquestion were used for hire purposes, the assessee cannot bedenied depreciation @ 30%. The appeal, therefore, fails. (DINESH MEHTA),J (NIRMALJIT KAUR),J