Prasad Multi Services Pvt. Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad

ITA 2270/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8645 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 02-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: P B PARMAR
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2270/AHD/2016 (ASSESSMENT YEAR: 2012-13) PRASAD MULTI SERVICES PRIVATE LIMITED 306 ZODIAC SQUARE, S.G. HIGHWAY, OPP. GURUDWARA, AHMEDABAD-380054 V/S DY. COMMISSIONER OF INCOME-TAX, CIRCLE-3(1)(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACCP 0464A APPELLANT BY : SHRI P.B. PARMAR, AR RESPONDENT BY : SHRI S. K. DEV, SR. D.R. ( )/ ORDER DATE OF HEARING : 05 -12-201 8 DATE OF PRONOUNCEMENT : 21 -12-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-9, AHMEDABAD DATED 08.06.2016 PERTAINING TO A.Y. 2012- 13 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 2270 /AHD/2016 . A.Y. 2012-1 3 2 1. LEARNED AO ERRED IN LAW AS WELL AS ON FACTS IN DENYING DEPRECIATION @ 30% ON TELESCOPIC CRANE AMOUNTING TO RS. 4,02,964/- AND IN STEAD ALLOWED DEPRECIATION @ 15% DESPITE THESE CRANES ARE USED IN THE BUSINESS OF RUNNING THEM ON HIRE. LEARNED C1T(A) ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE SAME. 2. LEARNED AO ERRED IN LAW AS WELL AS ON FACTS IN DENYING DEPRECIATION @ 30% ON RAIL FOR TOWER CRANE AMOUNTING TO RS. 73,303/- AND INSTEAD ALLOWED DEPRECIATION @ 15% DESPITE THESE CRANES ARE USED IN THE BUSINESS OF RUNNING THEM ON HIRE. LEARNED C1T(A) ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE SAME, 3. LEARNED AO ERRED IN LAW AS WELL AS ON FACTS IN DENYING DEPRECIATION @ 30% ON TOWER CRANE AMOUNTING TO RS. 3,12,681/- AND INSTEAD ALLOWED DEPRECIATION @ 15% DESPITE THESE CRANES ARE USED IN THE BUSINESS O F RUNNING THEM ON HIRE. LEARNED C1T(A) ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE SAME. 4. LEARNED AO ERRED IN LAW AS WELL AS ON FACTS IN DENYING DEPRECIATION @ 30% ON MOBILE TOWER CRANE AMOUNTING TO RS. 99,90,872/- AND INSTEAD ALLOWED DEPRECIATION @ 15% DESPITE THESE CRANES ARE USED IN THE BUSINESS OF RUNNING THEM ON HIRE. LEARNED CIT(A) ERRED IN LAW AS WELL A S ON FACTS IN CONFIRMING THE SAME. 5. LEARNED AO ERRED IN LAW AS WELL AS ON FACTS IN DENYING DEPRECIATION @ 30% ON CRAWLER CRANE AMOUNTING TO RS. 31,45,164/- AND INST EAD ALLOWED DEPRECIATION @ 15% DESPITE THESE CRANES ARE USED IN THE BUSINESS O F RUNNING THEM ON HIRE. LEARNED CN~(A) ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE SAME. 6. LEARNED AO ERRED IN LAW AS WELL AS ON FACTS IN DENYING DEPRECIATION @ 30% ON TOWER CRANE MASTS AMOUNTING TO RS. 9,75,571/- AND I NSTEAD ALLOWED DEPRECIATION @ 15% DESPITE THESE CRANES ARE USED IN THE BUSINESS OF RUNNING THEM ON HIRE. LEARNED CIT(A) ERRED IN LAW AS WELL A S ON FACTS IN CONFIRMING THE SAME. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE WAS HAV ING SEVEN EQUIPMENTS CLASSIFIED AS CRANE IN A SEPARATE BLOCK OF ASSETS C ARRYING 30% DEPRECIATION AS ITA NO. 2270 /AHD/2016 . A.Y. 2012-1 3 3 SAID ASSETS CONSIDERED TO BE A MOTOR LORRIES USED I N A BUSINESS RUNNING THEM ON HIRE. B. THE LEARNED AO RECASTED THE AMOUNT OF OPENING WDV BY ADDING RS. 97,52,455/-BEING THE DISALLOWANCE OF DEPRECIATION I N IMMEDIATE PREVIOUS ASSESSMENT YEAR VIDE ORDER MADE U/S. 143(3) FOR A. Y. 2011-12 C. DURING THE YEAR IN THIS BLOCK OF ASSET AN ADD ITION OF RS. 20,50,000/- AND RS. 4,53,200/- WAS MADE FOR MORE THAN 180 DAYS AND OTHER RESPECTIVELY. D. THERE IS A DEDUCTION OF RS. 27,92,645/- DURIN G THE YEAR. E. APPELLANT CLAIMED DEPRECIATION AT THE RATE OF 30% CONSIDERING ALL THIS ITEM FALLING INTO CATEGORY OF ASSETS IN APPENDIX I PART A III (3) (II) BEING MOTOR BUSES, MOTOR LORRY AND MOTOR TAXES USED IN A BUSINE SS OF RUNNING THEM ON HIRE. TOTAL CLAIM OF DEPRECIATION MADE BY THE ASSES SEE WAS RS. 1,77,55,394/-ON THE ASSETS. F. LEARNED AO RAISED SHOW CAUSE QUERY IN PROCEE DING IT THAT WHY DEPRECIATION SHOULD BE ALLOWED ON THIS EQUIPMENT AT THE RATE OF 30% AS THEY DID NOT FALL IN THE CATEGORY OF MOTOR BUSES, MOTOR LORRY AND MOTOR TAXES USED IN THE BUSINESS OF RUNNING THEM ON HIRE. G. THE LEARNED AO DISAGREE WITH THE REPLY SUBMIT TED BY THE APPELLANT AND DISALLOWED THE DEPRECIATION ON THE FOLLOWING CRANES AS PER DETAILS GIVEN BELOW : SR. NO. PARTICULARS OF CRANES DEPRECIATION DISALLOWED 1 TELESCOPIC CRANE 71,958 2 RAIL FOR TOWER CRANE 13,090 3 TOWER CRANE 55,836 4 MOBILE TOWER CRANE 31,97,272 5 CRAWLER CRANE 6,43,318 6 TOWER CRANE MASTS 2,66,150 ITA NO. 2270 /AHD/2016 . A.Y. 2012-1 3 4 7 HYDRA CRANES 10,32,103 TOTAL DEPRECIATION DISALLOWED 52,79,726 3. THE ASSESSEE HAS SUBMITTED FOLLOWING REPLY TO ASSIS TANT COMMISSIONER OF INCOME TAX VIDE LETTER DATED 03.03.2015 REGARDING C LARIFICATION OF DEPRECIATION CLAIMED @ 30% ON CRANES, WHICH IS AS UNDER: 'WE HAVE CLAIMED DEPRECIATION OF RS. 1,77,55,394/- O N VARIOUS CRANES. IT MAY PLEASE BE NOTED THAT HIRING OF VARIOUS TYPES OF CRA NES AND EQUIPMENTS IS ONE OF OUR MAIN BUSINESS ACTIVITY. REIVING ON THE DECISION OF VARIOUS HON'BLE COURTS AND TRIBUNALS, HIGHER RATE OF DEPRECATION SHOULD BE ALL OWED ON CRANES RUNNING THEM ON HIRE BY TREATING THE CRANE AS MOTOR LORRIES. IT MAY PLEASE BE NOTED THAT THE ISSUE FOR CLAIMING HIGHER RATE OF DEPRECIATION WAS RAISED IN THE IMMEDIATE PREVIOUS ASSESSMENT YEAR I. E. IN A. Y. 11-12 AND LEARNED AO DISALLOWED THE HIGHER RATE OF DEPRECATION ON CRA NES. AS AGAINST THAT ASSESSMENT ORDER, WE PREFERRED AN APPEAL BEFORE THE HON'BLE CIT (APPEALS). WE HAVE JUST FEW DAYS BACK RECEIVED AN ORDER FROM THE HON'BLE CIT(APPEALS) AND APPEAL WAS PARTLY ALLOWED. THE HON'BLE CIT (APPEALS ) GRANTED HIGHER RATE OF DEPRECIATION ONLY ON HYDRAULIC MOBILE CRANE AND DIS ALLOWED THE HIGHER RATE OF DEPRECIATION ON OTHER CRANES I.E. CRAWLER CRANES, T ELESCOPIC CRANE, TOWER CRANES ETC. A COPY OF ORDER OF THE HON'BLE CIT (APPEALS) I S ENCLOSED HEREWITH IN THIS REGARDS. YOU ARE REQUESTED TO KINDLY REFER THE ORDE R OF THE HON'BLE CIT(APPEALS), IN WHICH OUR SUBMISSION FOR JUSTIFICATION FOR CLAIM ING HIGHER RATE OF DEPRECIATION WAS INCORPORATED. WE ARE GOING TO FILE AN APPEAL BE FORE THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL AGAINST THE ORDER OF THE CIT(APP EALS) FOR HIGHER RATE OF DEPRECATION ON OTHER CRANES.' ITA NO. 2270 /AHD/2016 . A.Y. 2012-1 3 5 4. BUT LD. A.O. WAS NOT AGREE WITH THE CONTENTION OF T HE APPELLANT AND HELD THAT CRANES ARE NOT MOTOR VEHICLES ACT AND DISALLOWED TH E DEPRECIATION @ 30% CALCULATED BY THE ASSESSEE AND DISALLOWED DEPRECIAT ION OF RS. 52,79,726/-. 5. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSE E. 6. NOW APPELLANT IS BEFORE US. 7. AT THE OUTSET, LD. A.R. SHRI P.B. PARMAR FAIRLY CON CEDED THAT MATTER IS AGAINST THE ASSESSEE IN ASSESSEES OWN CASE AND FILED AN OR DER OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 960/AHD/2015 IN THE ASSESSMENT YEAR 2011- 12 WHEREIN ASSESSMENT YEAR IN QUESTION BEFORE US IS 2012-13 AND OPERATIVE PARA OF THE CO-ORDINATE BENCH IS REPRODUCED: 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. AS PER PROFIT AND LOSS ACCOUNT FOR THE Y EAR 31ST MARCH, 2011 THE ASSESSEE HAS SHOWN INCOME FROM MACHINE HIRING DURIN G THE YEAR UNDER CONSIDERATION. OUT OF TOTAL INCOME OF RS. 17,17,92, 943/-, ASSESSEE HAS SHOWN HIRING INCOME OF RS. 2,10,04,957/- FROM AIR COMPRES SOR, CRANES, DG SET, GENI, HYDRA CRANE, BOORN PLACER, TRANSIT MIXER. IN ITS SU BMISSION BEFORE THE ASSESSING OFFICER AND CIT(A), THE ASSESSEE HAS MAINLY REFERRE D TO HYDRA CRANES. THE ASSESSEE HAS ONLY FURNISHED RC BOOKS IN RESPECT OF HYDRA CRA NE. BUT THE ASSESSEE HAS FAILED TO FURNISH ANY RELEVANT MATERIAL AND SUPPORT ING EVIDENCES TO JUSTIFY ITS CLAIM OF DEPRECATION AT HIGHER RATE IN RESPECT OF T ELESCOPING CRANE, RAIL FOR TOWER CRANE, TOWER CRANE, MOBILE TOWER CRANE, CRAWLER CRA NE AND TOWER CRANE MASTS. THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF ITAT IN THE CASE OF BOTHRA SHIPPING SERVICES HOWEVER WE OBSERVE THAT FACTS OF THE CASE OF THE ASSESSEE ARE CLEARLY DISTINGUISHABLE FROM THE FACTS OF THE ABOVE CITED CASE OF KOLKATA ITAT. IN ITA NO. 2270 /AHD/2016 . A.Y. 2012-1 3 6 THE CASE OF BOTHRA SHIPPING SERVICES THE ISSUE IN T HE APPEAL WAS PERTAINING TO CRANE MOUNTED VEHICLE, JCB AND 400 WHEEL LOADERS WH ICH WERE REGISTERED AS HEAVY OR MEDIUM MOTOR VEHICLE BY RTO AND WERE USED IN THE BUSINESS OF HIRING THEM OUT TO OTHER WITHIN AMBIT OF EXPRESSION MOTOR LORRIES. HOWEVER, IN THE CASE OF THE ASSESSEE IT HAS USED DIFFERENT KINDS OF CRAN ES WHICH ARE NOT MOUNTED ON THE VEHICLE. WE HAVE NOTICED THAT HON'BLE JURISDICT IONAL HIGH COURT OF GUJARAT IN THE CASE OF GUJCO CARRIER VS. DCIT (2002) 122 TAXMA N 2006 (GUJ) HELD THAT MOTOR VEHICLE LIKE FIRE TRUCK, FORK LIFT TRUCK AND CRANE TRUCK WHICH ARE DESIGNED FOR SPECIAL SERVICES FALL WITHIN THE CATEGORY OF OTHER TRUCKS A LSO CALLED MOTOR LORRIES. FURTHER IN THE CASE OF GUJCO CARRIER THE MOTOR CRANE WAS RE GISTERED AS A HEAVY MOTOR VEHICLE AND WAS AN INTEGRAL PART OF MOTOR VEHICLES ON WHICH IT WAS MOUNTED AND IT WAS REGISTERED AS HEAVY MOTOR VEHICLES AND THAT CRANE WAS USED FOR LIFTING AND MOVING GOODS. MOBILE CRANE WAS ALSO REGISTERED WITH RTO AS HEAVY MOTOR VEHICLE WHICH WAS MOUNTED ON A TRUCK. IT WAS HELD IN THE AB OVE CITED CASE THAT LORRY OR TRUCK WOULD MEAN NOT ONLY ANY MOTOR VEHICLE DESIGNE D TO CARRY FREIGHT OR GOODS BUT ALSO TO PERFORM SAID SERVICES LIKE FIRE FIGHTIN G, THEREFORE, A TRUCK ADOPTED OR DESIGNED TO CARRY A CRANE IS MOUNTED FOR SUCH SERVI CES ON LIFTING LOAD, MOVING IT SIDE BY SIDE, ROTATING IT OR MOVING IT HORIZONTALLY . SIMILARLY THE CBDT INSTRUCTION NO.617 REFER TO FOLK LIFTING TRUCK OF HIGHER RATE O F DEPRECATION. ON THE PERUSAL OF THE FINDINGS OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF GUJCO CARRIER IT IS CLEAR THAT TYPES OF CRANES HAVING WITH THE ASSESSEE ARE C OMPLETELY OF DIFFERENT FROM CATEGORIES MENTIONED IN THE DECISION OF HON'ABLE JU RISDICTIONAL HIGH COURT IN THE CASE OF GUJCO CARRIER AND IN THE INSTRUCTION NO.617 OF THE CBDT. AFTER PERUSAL OF THE ABOVE DECISION OF JURISDICTION AL HON'BLE HIGH COURT WE OBSERVE THAT ALL THE 7 CATEGORIES OF CRANES ON WHIC H HIGHER RATE OF DEPRECIATION WERE CLAIMED WERE NOT INTEGRAL PART OF TRUCK CRANE AS ELABORATED ABOVE IN THE JUDICIAL FINDINGS EXCEPT THE HYDRA CRANE BEING MOUN TED ON THE TRUCK ON WHICH THE ID. CIT(A) HAS CORRECTLY ALLOWED THE HIGHER RATE OF DEPRECIATION.THEREFORE WE DO ITA NO. 2270 /AHD/2016 . A.Y. 2012-1 3 7 NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE AN D APPEAL OF THE REVENUE. ACCORDINGLY, BOTH THE APPEALS ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE A ND THE APPEAL OF THE ASSESSEE ARE DISMISSED. 8. RESPECTFULLY FOLLOWING THE CO-ORDINATE BENCH ORDER, WE DISMISS THE APPEAL OF THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON 21 - 12- 2018 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 21/12/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD