SHRI ARJUN SINGH , KOTA V. ASSISTANT COMMISSIONER OF INCOME TAX, KOTA

ITA 317/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3662 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHANMUGA PRIYAJCIT DHK
• Keywords: Depreciation; Question of law

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 317/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. SHRI ARJUN SINGH S/O SH. TARA SINGH BEHIND KOHLI MEDICAL STORE, KESHAVPURA, KOTA. CUKE VS. THE ACIT, CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AFRPS 7075 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE JKTLO DH VKSJ LS@ REVENUE BY : SHRI SHANMUGA PRIYA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04.06.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 06/06/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 5 TH DECEMBER, 2017 OF LD. CIT (A), KOTA FOR THE ASSESSMENT YEAR 2 009-10. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THIS APPEAL WAS CALLED FOR HEARING DESPITE THE NOTICE SENT THROUGH RPAD AT THE CORRECT ADDRESS OF THE ASS ESSEE. WE FURTHER NOTE THAT EVEN ON THE LAST DATE OF HEARING I.E. 25 TH APRIL, 2018 NONE HAD APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE NOTICE FOR THE SAID HEARIN G WAS SENT THROUGH RPAD. THUS THE REPEATED NOTICES ISSUED TO THE ASSESSEE AT THE GIVEN ADDRESS HAVE NOT YIELDED ANY RESULT AND, THEREFORE, WE PROPOSE TO HEAR AND D ISPOSE OFF THIS APPEAL EX PARTE. THE ASSESSEE HAS RAISED THE SOLITARY GROUND OF APPE AL AS UNDER :- 2 ITA NO. 317/JP/2018 SHRI ARJUN SINGH, KOTA. 1. THE ORDER OF THE LEARNED COMMISSIONER (APPEAL) IS BAD IN LAW & NOT JUSTIFIED IN ADDITION OF RS. 22,77,188/-. 2. OTHER GROUNDS OF APPEALS WILL BE URGED AT THE T IME OF HEARING. 2. WE HAVE HEARD THE LD. D/R AND CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORK. THE ASSESSEE HAS CLAIMED HIGHER DEPRECIATION @ 30% ON D UMPERS, TRUCKS, EXCAVATOR/JCB. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT GIVEN THESE VEHICLES ON HIRE. THER EFORE, THE HIGHER DEPRECIATION IS NOT APPLICABLE WHEN THE ASSESSEE IS NOT IN THE BUSI NESS OF RUNNING THE VEHICLES ON HIRE. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND REITERATED HIS CLAIM OF HIGHER DEPRECIATION THAT TH E VEHICLES ARE REGISTERED AS COMMERCIAL VEHICLES AND, THEREFORE, ILLEGIBLE FOR D EPRECIATION @ 30%. THE LD. CIT (A) HAS CONSIDERED AND DECIDED THIS ISSUE AT PAGES 5 TO 7 AS UNDER :- I HAVE GONE THROUGH ASSESSEES SUBMISSION AND A OS FINDINGS. THE APPELLANT IS A CIVIL CONTRACTOR AND THROUGH THE JCB AND DUMPER AS PER THE CASE LAWS CITED MAY BE CONSIDERED FOR THE D EFINITION OF LORRIES OR TRUCKS BUT THEY ARE NOT BEING USED ON HIRE BUT O NLY BEING USED FOR FACILITATING THE CIVIL CONSTRUCTION BUSINESS OF THE APPELLANT. IN FACT BY DEBITING HIRE CHARGES IN THE ACCOUNT AS MENTIONED B Y THE A.O. IN HIS ORDER APPARENTLY HE IS ALSO HIRING FROM OUTSIDE. HIGH COURT OF MADHYA PRADESH BENCH AT GWALIOR IN IT A NO. 2/2013 IN CASE OF M/S. ANAMAY CONSTRUCTION CO. VS. UNION OF INDIA AND OTHERS HELD 3 ITA NO. 317/JP/2018 SHRI ARJUN SINGH, KOTA. 8. IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE IS IN THE BUSINESS OF CIVIL CONSTRUCTION. THE ASSESSEE HAD ENGAGED HIS OWN TRUCKS FOR TRANSPORTING EARTH TO FACILITATE LAYING OF ROADS. U NDER SUCH CIRCUMSTANCES, THE ASSESSEE CANNOT BE SAID TO BE IN THE BUSINESS OF HIRING OUT HIS TRUCKS FOR REMOVAL OF EARTH TO MAKE HIM ENTITLED FOR HIGHER RATE OF DEPRECIATION, AS REMOVAL AND TRANSPO RTATION OF EARTH ARE ONLY SUB-PROCESSES OF HIS MAIN BUSINESS OF LAYING O F ROADS. THE ORDER OF CIT (A) ENTITLING THE ASSESSEE FOR HIGHER RATE O F DEPRECIATION ON THE PREMISE THAT HIS MOTOR VEHICLES WERE USED FOR REMOV AL OF EARTH AND SINCE THE EARTH DID NOT BELONG TO THE ASSESSEE, THE REFORE, THE USE OF HIS MOTOR VEHICLES WAS ON HIRE, IN THE OPINION OF T HIS COURT, IS NOT CORRECT, EITHER ON FACTS OR IN LAW, BESIDES NOT BEI NG IN CONFORMITY WITH THE TEST LAID DOWN BY THE APEX COURT, AS INDICATED ABOVE, AND ALSO, WITH THE BOARDS CIRCULAR NO. 609/CIRCULAR NO. 652 DT. 14/6/93. 9. IN THE CASE OF GAYLORD CONSTRUCTIONS (2010) 190 TAXMAN 406 (KER) THE QUESTION RAISED IN APPEAL FILED BY THE RE VENUE WAS WHETHER THE TRIBUNAL WAS JUSTIFIED IN UPHOLDING THE ASSESSE ES CLAIM FOR DEPRECIATION OF EARTH MOVING EQUIPMENT, NAMELY, JCB AT THE RATE OF 40%; THE RATE PROVIDED FOR MOTOR BUSES, MOTOR LORR IES, MOTOR TAXIS, USED IN THE BUSINESS OF RUNNING THEM ON HIRE AND AS SUCH, THE ASSESSEE WAS IN THE BUSINESS OF RUNNING THE MOTOR V EHICLES ON HIRE, HOWEVER, THE QUESTION WAS WHETHER HIGHER RATE OF D EPRECIATION WAS AVAILABLE FOR PUTTING THE JCB MACHINE ON HIRE AND THE COURT RULED THAT THE EXPRESSION MOTOR LORRY, COVERED BY THE ENTRY IN THE APPENDIX-1 OF INCOME TAX RULES PROVIDING FOR HIGHER RATE OF DEPRE CIATION, HAS A WIDE MEANING AND WILL INCLUDE THE JCB MACHINE, WHICH IS BASICALLY USED FOR EXCAVATION OF SOIL, IT IS A HEAVY VEHICLE ALSO USED FOR TRANSPORTATION OF EXCAVATED SOIL, RELYING ON THE JUDGMENT OF HONBLE SUPREME COURT IN 4 ITA NO. 317/JP/2018 SHRI ARJUN SINGH, KOTA. THE CASE OF BOSE ABRAHAM V. STATE OF KERALA AND ANO THER, AIR 2001 SC 835. HENCE, THE AFORESAID CASE IS OF NO ASSISTANCE TO THE FACTS IN HAND. IN THE CASE OF CIT VS. GUJRAT TUBEWELL (SUPRA) THE COURT HAD ADDRESSED ON THE ISSUE AS TO WHETHER CONSTRUCTION OF DAM, B RIDGE, BUILDING, ROAD WILL FALL WITHIN THE MEANING OF MANUFACTURE OR PRODUCTION OF AN ARTICLE OR THING ENTITLING DEPRECIATION UNDER SUB-C LAUSE (III) OF CLAUSE (B) OF SUB-SECTION (2) OF SECTION 32A AND ANSWERED THE SAME IN NEGATIVE AND IN FAVOUR OF REVENUE RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. N.C. BUDHARAJA & CO. AND ANR. (1993) 114 CTR (SC) 420 WHERE THE SUPREME COURT HEL D THAT THE AFORESAID PROVISION OF THE INCOME TAX ACT DOES NOT COMPREHEND WITHIN ITS AMBIT THE CONSTRUCTION OF DAM, BRIDGE, BUILDING , ROAD, CANAL AND OTHER SIMILAR CONSTRUCTION. HENCE, THIS CASE IS ALS O OF NO ASSISTANCE TO THE FACTS IN HAND. 10. ACCORDINGLY, THE SUBSTANTIAL QUESTION OF LAW FR AMED IS ANSWERED IN THE NEGATIVE AND IN FAVOUR OF THE REVENUE UPHOLD ING THE ORDER PASSED BY THE ITAT. THE ARGUMENT OF THE APPELLANT THAT THE SHIFTING OF SOIL FROM SITES ETC. WOULD MAKE HIM ELIGIBLE FOR THE DEFINITION OF HIRIN G ON BEHALF OF OTHERS IS THEREFORE NOT RELEVANT IN THIS CASE AND IN MY OP INION HE WILL NOT BE ENTITLED FOR A HIGHER RATE OF DEPRECIATION @ 30% AS HAS BEEN RIGHTLY HELD BY THE AO. THE DISALLOWANCE OF RS. 22,77,188/ - IS ACCORDINGLY UPHELD. THUS IT IS CLEAR THAT THE LD. CIT (A) HAS FOLLOWED VARIOUS DECISIONS OF HIGH COURTS WHILE DECIDING THE ISSUE. IN THE ABSENCE OF ANY CO NTRARY PRECEDENTS BROUGHT TO OUR 5 ITA NO. 317/JP/2018 SHRI ARJUN SINGH, KOTA. NOTICE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF LD. CIT (A). 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 06/06/201 8. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 06/06/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI ARJUN SINGH, KOTA. 2. THE RESPONDENT THE ACIT, CIRCLE-2, KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 317/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 317/JP/2018 SHRI ARJUN SINGH, KOTA.