M & B Engineering Pvt. Ltd., Ahmedabad V. The ACIT, (OSD) -1, Circle -4, Ahmedabad

ITA 2218/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6009 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SUTARIA
• Keywords: Depreciation
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M & B ENGINEERING PVT. LTD. 51, CHANDRODAYA SOCIETY, OPP. GOLDEN TRIANGLE STADIUM ROAD, AHMEDABAD - 380013 PAN: (APPELLANT) VS THE ACIT(OSD) - 1, CIRCLE - 4, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI DEEPAK SU TARIA , SR. D . R. ASSESSEE BY: S H RI SUNIL TALATI , A.R. DATE OF HEARING : 29 - 03 - 2 017 DATE OF PRONOUNCEMENT : 03 - 05 - 2 017 / ORDER P ER : AMARJIT SINGH, ACC OUNTANT MEMBER : - THESE TWO ASSESSEE S APPEAL S FOR A.Y. 2009 - 10 & 2010 - 11 , AR ISE FROM ORDER OF THE CIT(A) - VIII, AHMEDABAD DATED 14 - 06 - 2013 IN APPEAL NO S. CIT(A) - VIII/ACIT/R.4 / 253/11 - 12 & CIT(A) - VIII/JCIT/R.4/125/12 - 13 , IN PROCEEDINGS UNDER SECTION 143(3 ) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO S . 2218 & 2219 / A HD/20 13 A SSESSMENT YEAR 200 9 - 10 & 2010 - 11 I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 2 2. THE ASSESSEE HAS RAISED FOLLOWING SUBSTANTIVE GROUND OF APPEAL: - ITA NO. 2218/AHD/2013 1. THE LEARNED C.I.T. (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION ON MOTOR CAR CLAIMED AT 5 0% ON THE BASIS OF THE BOARD CIRCULAR AND NOTIFICATION SPECIALLY MADE AVAILABLE FOR THE RELEVANT ASST. YEAR 2009 - 2010. IT IS SUBMITTED THAT THE LEARNED C.I.T. (APPEALS) IS NOT CORRECT IN MENTIONING THAT DEPRECIATION AT 50% IS AVAILABLE ONLY TO THE ASSESSEE S, WHO ARE OWNING AND USING THE SAME IN THE BUSINESS OF HIRING OF VEHICLES. IT IS SUBMITTED THAT THE DEPRECIATION CLAIMED ON THE MOTOR CAR - WDV BE ALLOWED AT THE RATE OF 50%. IT IS SUBMITTED THAT DISALLOWANCE OF RS.97,817/ - BE DELETED. 3. AS THE FACTS I N BOTH THE APPEALS ARE SIMILAR, SO, WE TAKE ITA NO. 2218/AHD/2013 AS THE LEAD CASE AND DECIDE BOTH OF THEM ACCORDINGLY. 4. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 1,11,86,260/ - WAS FILED ON 30 - 09 - 2009. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE ADDITION TO THE MOT O R CAR AT RS. 5,58,945/ - AND HAD CLAIMED DEPRECIA TION AT THE RATE OF 50%. T HE ASSESSING OFFICER OBSERVED THAT AS PER THE APPENDIX/DEPRECIATION ON MOTOR CAR UNDER THE HEAD MACHINERY & PLANT AS PER CLAUSE (2) DEPRECIA TION AT THE RATE 15% HAS BEEN PROVIDED ON THE MOTOR CARS OTHER THAN USED IN A BUSINESS OR RUNNING THEM ON HIRE. H E FUR THER OBSERVED THAT DEPRECIA TION IN THE OTHER CASES I.E. USE IN THE BUSINESS OF RUNNING THEM AT HIRE ETC. HAS BEEN PROVIDED IN CLAUSE (3) AND AS I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 3 PER (VIA) OF CLAUSE (3), DEPRECIATION @ 50% ON MOTOR CAR IS AVAILABLE TO ONLY NEW COMMERCIAL VEHICLES WHICH A RE ACQUIRED ON OR AFTER THE 1 ST DAY OF JANUARY, 2009 BUT BEFORE THE 1 ST DAY OF APRIL 2009 AND IS PUT TO USE BEFORE THE 1 ST DAY OF APRIL, 2009 FOR THE PURPOSE OF BUSINESS OR PROFESSION. THE ASSESSING OFFICER OBSERVED THAT THE CASE OF THE ASSESSEE DOES NOT FALL UNDER THE ABOVE CATEGORY OR IT IS NOT ENTITLED FOR DEPRECIATION @ 50%. THE ASSESSING OFFICER NOTICED THAT THE ASSS SEE HAD PUT THE MOTOR CAR TO US E FOR LESS THAN 180 DAYS AND THE ASSESSEE WAS NOT ENTITLED FOR HIGHER RATE OF DEPRECIATION THEREFORE, THE ASSESSEE WAS ALLOWED DEPRECIATION @ 7.5% ONLY ON THE MOTOR CAR AFTER APPLYING THE NORMAL CATEGORY RATE OF 15% TO THE CASE OF THE ASSESSEE. 5. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAD SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 2.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT CAREFULLY. THE AO HAS DISALLOWED THE CLAIM OF DEPRECIA TION ON VEHICLES OF RS. 97, 817/ - . THE APPELLANT HAS SUBMITTED THAT THE LEGISLATURE HAS GIVEN THE BENEFIT OF HIGHER DEPRECIATION TO THE ASSESSEE NOT ENGAGED IN THE BUSINESS OF RUNNING MOTOR BUSES; MOTOR LORRIES AND MOTOR TAXIS ON HIRE BY DEFINING LIGHT MOTOR VEHICLES AS COMMERCIAL VE HICLES. THEREFORE, ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION AT THE RATE OF 50 PER CENT ON THE MOTORCAR WHICH IS AMOUNTED TO RS. 2,09,604/ - AS PER THIRD PROVISO TO SEC. 32 OF THE IT. ACT, 1961 TILL SUCH CAR IS USED FOR BUSINESS PURPOSES AND THUS IT SHOULD BE ALLOWED ACCORDINGLY. THE CONTENTION OF THE APPELLANT ARE CONSIDERED BUT I AM NOT IN AGREEMENT OF THE APPELLANT SUBMISSION THAT BOLERO VEHICLE IS A I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 4 COMMERCIAL VEHICLE. SECONDLY, THE A.O. WHILE COMPLETING THE ASSESSMENT FOR THE A.Y. 2009 - 10 U/S. 143(3) HELD THAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION AT THE NORMAL RATE OF 15% AS THE VEHICLE WAS NOT PLIED FOR HIRE PURPOSE AND AS THE VEHICLE WAS USED FOR LESS THAN 6 MONTHS, THEREFORE, HE ALLOWED DEPRECIATION AT 1/2 I.E. 7.5% AND DISALLOWED THE REMAINING CLAIM OF DEPRECIATION. THIS VIEW IS ALSO SUPPORTED BY THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SANDESH LTD. PRONOUNCED ON 27.07.2011 WHEREIN IT HAS BEEN HELD THAT HIGHER RATE OF DEPRECIATION IS AVAILABLE ONLY WHEN THE ASSESSEE OWNING THOS E ARE ALSO IN THE BUSINESS OF HIRING OF VEHICLES. THESE FACTS HAVE NOT 'BEEN CONTROVERTED BY THE APPELLANT. THE CBDT HAS ISSUED THE CIRCULAR FOR COMMERCIAL VEHICLE AND NOT FOR MOTOR CAR WHICH ARE NOT USED FOR HIRE PURPOSE. IN VIEW OF THE ABOVE, THE ADDITIO N MADE BY THE APPELLANT IS SUSTAINED. 6. WE HAVE HEARD BOTH THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT THE CO - ORDINATE BENCH OF THE ITAT AHMEDABAD HAD DECIDED THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF S HREE BALAJI PRODUCTS V. ITO (2016) 75 TAXMANN. COM 231 REPRODUCED AS UNDER: - 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE ITAT, MUMBAI BENCH IN TH E CASE OF DALEEP S. CHANDNANI VS. ACIT, REPORTED IN 14 SOT 0233. THE TRIBUNAL HAS CONSIDERED VERBATIM SAME SITUATION IN THAT CASE. DISCUSSION MADE BY THE TRIBUNAL READS AS UNDER: WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECO RD, ORDERS OF AUTHORITIES BELOW AND APPLICABLE LEGAL PROVISIONS. THE INTERESTING QUESTION WHICH HAS ARISEN BEFORE US IS REGARDING THE RATE OF DEPRECIATION APPLICABLE TO MOTOR CAR ACQUIRED BETWEEN 2 - 10 - 1998 AND 31 - 3 - 1999 AND IF THE SAME HAS BEEN PUT TO USE BETWEEN THE SAME PERIOD FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. AS FAR AS USE OF THE CAR ACQUIRED BY THE ASSESSEE DURING THIS PERIOD FOR THE PURPOSE OF BUSINESS IS CONCERNED, THE SAME IS NOT IN DISPUTE. WE CONSIDER IT PERTINENT TO REPRODUCE THE RELEVA NT STATUTORY PROVISIONS AS UNDER FOR BETTER APPRECIATION OF LEGAL POSITION. 1. IIIRD PROVISO TO SECTION 32 , AND EXPLANATION THERETO. I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 5 PROVIDED ALSO THAT WHERE AN ASSET BEING COMMERCIAL VEHICLE IS ACQUIRED BY THE ASSESSEE ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 BUT BEFORE THE 1ST DAY OF APRIL, 1999 AND IS PUT TO USE BEFORE THE 1ST DAY OF APRIL, 1999 FOR THE PURPOSES OF BUSINESS OF PROFESSION, THE DEDUCTION IN RESPECT OF SUCH ASSET SHALL BE ALLOWED ON SUCH PERCENTAGE ON THE WRITTEN DOWN VALUE THEREFORE, AS MAY BE PRESCRIBED. EXPLANATION.' FOR THE PURPOSES OF THIS PROVISO' (A) THE EXPRESSION 'COMMERCIAL VEHICLE' MEANS' 'HEAVY GOODS VEHICLE', 'HEAVY PASSENGER MOTOR VEHICLE', 'LIGHT MOTOR VEHICLE', 'MEDIUM GOOD S VEHICLE' AND 'MEDIUM PASSENGER MOTOR VEHICLE', BUT DOES NOT INCLUDE 'MAXI - CAB', 'MOTOR - CAB', 'TRACTOR' AND 'ROAD - ROLLER'. (B) THE EXPRESSION 'HEAVY GOODS VEHICLE', 'HEAVY PASSENGER MOTOR VEHICLE'. 'LIGHT MOTOR VEHICLE', 'MEDIUM GOODS VEHICLE', 'MEDIUM PA SSENGER MOTOR VEHICLE', 'MAXI - CAB', 'MOTOR - CAB', 'TRACTOR' AND 'ROAD - ROLLER' SHALL HAVE THE MEANINGS RESPECTIVELY AS ASSIGNED TO THEM IN SECTION 2 OF THE MOTOR VEHICLES ACT, 1988 (59 OF 1988). 2. RELEVAN T PROVISIONS OF APPENDIX - I AND NOTE THERETO. (IIA COMMERCIAL VEHICLE WHICH IS ACQUIRED BY THE ASSESSEE ON OR AFTER THE 1ST DAY OF OCTOBER, 1998, BUT BEFORE THE 1ST DAY OF APRIL, 1999 AND IS PUT TO USE FOR ANY PERIOD BEFORE THE 1ST DAY OF APRIL, 1999 FOR TH E PURPOSE OF BUSINESS OR PROFESSION IN ACCORDANCE WITH THE THIRD PROVISO TO CLAUSE (II) OF SUB - SECTION (1) OF SECTION 32 (SEE NOTE 3A BELOW THE TABLE) 3A. 'COMMERCIAL VEHICLE' MEANS 'HEAVY GOODS VEHICLE' , 'HEAVY PASSENGER MOTOR VEHICLE', 'LIGHT MOTOR VEHICLE', 'MEDIUM GOODS VEHICLE' AND 'MEDIUM PASSENGER MOTOR VEHICLE' BUT DOES NOT INCLUDE 'MAXI - CAB', 'MOTOR - CAB', 'TRACTOR' AND 'ROAD - ROLLER'. THE EXPRESSIONS 'HEAVY GOODS VEHICLE', 'HEAVY PASSENGER MOTOR V EHICLE', 'LIGHT MOTOR VEHICLE', 'MEDIUM GOODS VEHICLE', 'MEDIUM PASSENGER MOTOR VEHICLE', 'MAXI - CAB', 'MOTOR - CAB', 'TRACTOR' AND 'ROAD - ROLLER' SHALL HAVE THE MEANINGS RESPECTIVELY AS ASSIGNED TO THEM IN S ECTION 2 OF THE MOTOR VEHICLES ACT, 1988 (59 OF 1988)) I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 6 3. RELEVANT PROVISIONS OF THE MOTOR VEHICLES ACT , 1988. 'HEAVY GOODS VEHICLE' MEANS ANY GOODS CARRIAGE THE GROSS VEHICLE WEIGHT OF WHICH, OR A TRAC TOR OR A ROAD - ROLLER THE UNLADEN WEIGHT OF EITHER OF WHICH, EXCEEDS 12,000 KILOGRAMS; 'HEAVY PASSENGER MOTOR VEHICLE' MEANS ANY PUBLIC SERVICE VEHICLE OR PRIVATE SERVICE VEHICLE OR EDUCATIONAL INSTITUTION BUS OR OMNIBUS THE GROSS VEHICLE WEIGHT OF ANY OF W HICH, OR A MOTOR CAR THE UNLADEN WEIGHT OF WHICH, EXCEEDS 12,000 KILOGRAMS; 'LIGHT MOTOR VEHICLE' MEANS A TRANSPORT VEHICLE OR OMNIBUS THE GROSS VEHICLE WEIGHT OF EITHER OF WHICH OR A MOTOR CAR OR TRACTOR OR ROAD - ROLLER THE UNLADEN WEIGHT OF ANY OF WHICH, DOES NOT EXCEED (7,500) KILOGRAMS; 'MAXI - CAB' MEANS ANY MOTOR VEHICLE CONSTRUCTED OR ADAPTED TO CARRY MORE THAN SIX PASSENGERS, BUT NOT MORE THAN TWELVE PASSENGERS, EXCLUDING THE DRIVER, FOR HIRE OR REWARD; 'MEDIUM GOODS VEHICLE' MEANS ANY GOODS CARRIAGE O THER THAN A LIGHT MOTOR VEHICLE OR A HEAVY GOODS VEHICLE; 'MEDIUM PASSENGER MOTOR VEHICLE' MEANS ANY PUBLIC SERVICE VEHICLE OR PRIVATE SERVICE VEHICLE, OR EDUCATIONAL INSTITUTION BUS OTHER THAN A MOTOR CYCLE, INVALID CARRIAGE, LIGHT MOTOR VEHICLE OR HEAVY PASSENGER MOTOR VEHICLE; 'MOTOR CAB' MEANS ANY MOTOR VEHICLE CONSTRUCTED OR ADAPTED TO CARRY NOT MORE THAN SIX PASSENGERS EXCLUDING THE DRIVER FOR HIRE OR REWARD; 8. AS PER THE THIRD PROVISO TO SECTION 32 OF THE ACT, IN RESPECT OF THE ASSET BEING COMMERCIAL VEHICLE ACQUIRED BETWEEN 2 - 10 - 1998 AND 31 - 3 - 1999, THE DEPRECIATION HAS TO BE ALLOWED ON SUCH PERCENTAGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED. AS PER THE PROVISIONS OF SECTION 43(6)(C)(II) . W.D.V. MEANS THE WRITTEN DOWN VALUE OF THAT BLOCK OF ASSET AS INCREASED BY THE ACTUAL COST OF ANY ASSET FALLING WITHIN THAT BLOCK ACQUIRED DURING THE PREVIOUS YEAR AND AS REDUCED BY THE MONIES PAYA BLE TOGETHER WITH SCRAP VALUE IF ANY IN RESPECT OF I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 7 THE ASSETS FALLING WITHIN THAT BLOCK WHICH ARE SOLD OR DISCARDED OR DEMOLISHED OR DESTROYED DURING THAT PREVIOUS YEAR. HOWEVER, FOR OUR PURPOSE THE MATERIAL PROVISION IS THAT THE ACTUAL COST OF THE ASSET S O ACQUIRED WOULD FALL WITHIN THAT BLOCK IN THE YEAR OF ACQUISITION AND THEREAFTER THE W.D.V., I.E., THE ACTUAL COST LESS DEPRECIATION ALLOWED THEREON WOULD BE MATERIAL FOR COMPUTING DEPRECIATION IN SUBSEQUENT YEARS. THUS THE COST OF CAR IS TO BE TREATED AS W.D.V. FOR COMPUTING DEPRECIATION THEREON AT THE SPECIFIED PERCENTAGE. FURTHER THE EXPLANATION TO THIS PROVISO DEFINES THAT THE EXPRESSION 'COMMERCIAL VEHICLE' WOULD MEAN... 'LIGHT MOTOR VEHICLE' AND THE 'LIGHT MOTOR VEHICLE' AS DEFINED IN THE MOTOR VEHICLES ACT , 1988, MEANS ANY TRANSPORT VEHICLE OR OMNI BUS, THE GROSS PHYSICAL WEIGHT OF EITHER OF WHICH OR A MOTOR CAR OR A TRACTOR OR ROAD ROLLER THE UNLADEN WEIGHT OF WHICH DOES NOT EXCEED 75,00 KGS. THUS A MOTOR CAR NOT EXCEEDING THE SPECIFIED WEIGHT IS COVERED UNDER THE DEFINITION OF 'LIGHT MOTOR VEHICLE'. IT IS FURTHER PROVIDED THAT COMMERCIAL VEHICLE WOULD NOT INCLUDE 'MAXI - CAB' AND 'MOTOR - CAB'. THE MAXI - CAB AS PER PROVISIONS OF MOTOR VEHICLES ACT MEANS ANY MOTOR VEHICLE CONSTRUCTED OR ADAPTED TO CARRY MORE THAN SIX PASSENGERS BUT NOT MORE THAN TWELVE PASSENGERS EXCLUDING THE DRIVER FOR HIRE OR REWARD. SIMILARLY THE TERM 'MOTOR C JO' ALSO EXCLUDES ANY MOTOR VEHICLE FOR HIRE OR REWARD. IF THE PROVISIONS OF EXPLANATION TO THIS PROVISO AND THE DEFINITION OF MAXI - CAB AND MOTOR CAB AS GIVEN IN MOTOR VEHICLES ACT , 1988 ARE READ TOGETHER THEN MOTOR VEHICLES USED FOR HIRE OR REWARD WOULD NOT BE COVERED UNDER THIS PROVISO TO SECTION 32 OF THE ACT, AND SUCH MOTOR VEHICLES WOULD BE COVERED UNDER ENTRY (2)(II) OF ITEM - 3 OF PART - A OF APPENDIX - I TO RULE 5 OF THE RULES. THIS CONCLUSION FURTHER LEADS TO AN INTERFERENCE THAT THE LEGISLATURE HAS GIVEN BENEFIT OF HIGHER DEPRECIATION TO THE ASSESSEES NOT ENGAGED IN THE BUSINESS OF MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIES ON HIRE AND DEFINING SUCH LIGHT MOTOR VEHICLES AS COMMERCIAL VEHICLES THOUGH INTENTIONALLY EXCLUDING VEHICLES COMMERCIALLY EXPLOITED FOR YIELDING INCOME FROM THE DEFINITION OF COMMERCIAL VEHICLE FURTHER SUPPORTS THE CASE OF THE ASSESSEE. WE ALSO FIND SUFFICIENT FORCE IN THE CONTENTION OF THE ASSESSEE THAT DIFFERENT ENTRIES EXIST IN APPENDIX - I FOR DIFFERENT CATEGORIES OF MOTOR VEHICLES FOR PROVIDING DEPRECIATION AT A SPECIFIED RATE DEPENDING UPON THE PERIOD OF ACQUISITION AND THE PURPOSE FOR WHICH THEY ARE DEPLOYED. THEREFORE, NOMENCLATURE OF I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 8 COMMERCIAL VEHICLE SHOULD NOT BE SO CONSTRUED TO DEPRIVE THE ASSESSEE OF HIGHER DEPRECIATION WHEN ALL THE CONDITIONS SPECIFIED IN THE ACT AND THE RULES HAVE BEEN MET BY THE ASSESSEE. WE ALSO HOLD THAT, TILL SUCH CAR IS USED BY THE ASSESSEE FOR ITS BUSINESS PURPOSE T HE ASSESSEE WOULD GET THE DEPRECIATION AT THE RATE OF 40 PER CENT AS PER THE THIRD PROVISO TO SECTION 32 OF THE ACT. THUS, GROUND NOS. 1 TO 3 OF THE ASSESSEE STAND ACCEPTED. 5. IN THE PRESENT CASE, THE LD.AO HAS GRANTED DEPRECIATION AT THE RATE OF 15% WITHOUT EXAMINING RELEVANT PROVISIONS. IT APPEARS THAT HIS FINDING IS BASED UPON HIS EXPERIENCE AND PAST IMPRESSION. HE WAS OF THE OPINION THAT ONCE BOARD HAS NOT GRANTED HIGHER RATE OF DEPRECIATION TO CA RS, WHICH ARE PUT IN THE BUSINESS OF HIRING, THEN HOW A PARTNER, WHO USED MOTOR CAR FOR THE PURPOSE OF BUSINESS CAN BE GRANTED AT A SUCH RATE. IN THE CASE HE HAD AN IMPRESSION, HIGHER RATE OF DEPRECIATION AT THE MOST COULD BE GRANTED TO THE CAR USED FOR T HE PUBLIC TRANSPORTATION FOR THE PEOPLE. ON APPEAL, THE LD.CIT(A) HAS OBSERVED THAT CBDT HAS AMENDED I.T. RULES BY INCOME TAX (THIRD AMENDMENT) RULES, 2009 AND NEW APPENDIX HAS BEEN INTRODUCED. THE LD.CIT(A) MADE REFERENCE TO NOTIFICATION NO.10/2009 DAT ED 19.1.2009 AND ALSO PARA - 6 OF THE SAID NOTIFICATION WHICH GIVES DEFINITION OF COMMERCIAL VEHICLE. I HAVE EXAMINED THIS NOTIFICATION AVAILABLE ON PAGE NO.1.426 OF INCOME TAX RULES (3 RD EDITION) OF TAXMANN I.E. 2016 EDITION. PARAGRAPH - 6 CONTEMPLATES DEFI NITION OF COMMERCIAL VEHICLE . THIS PARAGRAPH IS AVAILABLE AT PAGE NO.1.433 OF THE TAXMANN S INCOME TAX RULES. I FIND IT IS VERBATIM SAME AS CONSIDERED BY THE ITAT, MUMBAI. THERE IS NO SUCH CONDITION THAT VEHICLE WOULD QUALIFY AS COMMERCIAL VEHICLES WHEN LICENSED TO BE USED AS PUBLIC TRANSPORT. FOR FACILITY OF REFERENCE, I TAKE NOTE OF THIS AS UNDER: 6. COMMERCIAL VEHICLE MEANS HEAVY GOODS VEHICLE , HEAVY PASSENGER MOTOR VEHICLE , LIGHT MOTOR VEHICLE , MEDIUM GOODS VEHICLE AND MEDIUM PASSENG ER MOTOR VEHICLE BUT DOES NOT INCLUDE MAXI - CAB , MOTOR - CAB , TRACTOR AND ROAD - ROLLER . THE EXPRESSIONS HEAVY GOODS VEHICLE , HEAVY PASSENGER MOTOR VEHICLE , LIGHT MOTOR VEHICLE , MEDIUM GOODS VEHICLE , MEDIUM PASSENGER MOTOR VEHICLE , MAXI - CAB , MOTOR - CAB , TRACTOR AND ROADROLLER SHALL HAVE THE MEANINGS RESPECTIVELY AS ASSIGNED TO THEM IN SECTION 2 OF THE MOTOR VEHICLES ACT, 1988 (59 OF 1988). I.T.A NO S . 2218 & 2219 /AHD/20 13 A.Y. 200 9 - 10 & 2010 - 11 PAGE NO M & B ENGINEERING PVT. LTD. VS. ACIT 9 6. IN VIEW OF THE ABOVE, I DO NOT FIND ANY DISPARITY ON FACTS. I ALLOW APPEAL OF THE ASSESSEE A ND DELETE DISALLOWANCE MADE BY THE AO. RESPECTFULLY FOLLOW THE DECISION OF THE CO - ORDINATE BENCH AS SUPRA, WE ALLOW THE APPEAL OF THE ASSESSE E. 7. IN THE RESULT , BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OU RT ON 03 - 05 - 201 7 SD/ - SD/ - ( S.S. GOD ARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 03 /05 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,