The ACIT, Visakhapatnam V. M/s. Srivalli Shipping & Transport Pvt. Ltd., Visakhapatnam

ITA 340/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3919 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y SESHA SRINIVAS
• Keywords: Business income; Depreciation; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 340 / VIZ /201 7 (ASST. YEAR : 20 13 - 14 ) ACIT, CIRCLE - 4(1), VISAKHAPATNAM. V S . M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD., 23 - 22 - 21, 2 ND FLOOR, SIVALAYAM STREET, OLD TOWN AREA, VISAKHAPATNAM. PAN NO. AAPCS 7844 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI Y. SESHA SRINIVAS SR. DR DATE OF HEARING : 18 / 0 4 /201 8 . DATE OF PRONOUNCEMENT : 25 / 04 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 30 /0 3 /201 7 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE - COMPANY IS ENGAGED IN THE BUSINESS OF STEVEDORING , FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 2,80,69,916/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED 2 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRE D TO AS 'ACT'). DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE OPENING WDV AND ADDITION AT 30% ON MOTOR LORRIES, DUMPERS AND TRAILERS. THE ASSESSING OFFICER ALSO NOTED THAT A S PER PART - III(3)(II) OF THE TABLE OF RATES PRESCRIBED UNDER RULE 5 OF THE IT RULES, 1962, HIGHER RATE OF DEPRECIATION AT 30% IS ELIGIBLE ONLY TO MOTOR LORRIES, MOTOR BUSES AND MOTOR TAXIES , WHICH WOULD BE USED FOR THE PURPOSE OF RUNNING THEM ON HIRE . OTHERWISE, THEY ARE ELIGIBLE FOR DEPRECIATION AT 15% AS PER PART - III(1) OF THE SAID RULES AND DENIED THE CLAIM OF THE ASSESSEE AT HIGHER RATE. 3 . ON APPEAL, LD. CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND ALLOWED THE APPEAL FILED BY THE ASSESSEE BY OBSERVING AS UNDER: - 6. I HAVE CONSIDERED THE SUBMISSIONS AND ALSO THE DETAILS FILED IN THE FORM OF PAPER BOOK. THE ONLY ISSUE FOR RESOLUTION IS WHETHER THE ASSESSEE WOULD BE ENTITLED TO HIGHER CLAIM OF DEPRECIATION ON THE UPPERS, DUMPERS, TRAILERS USED IN HIS BUSINESS. UNDER PART III (3)( II) OF THE DEPRECIATION SCHEDULE IN IT RULES, WHICH PROVIDES AS UNDER: 3(1,) MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIS USED IN A BUSINESS OF RUNNING THEM ON HIRE. IT IS SEEN THAT THE AO HAD DENIED THIS CLAIM OBSERVING THAT THE CORE ACTIVITY OF THE ASSESSEE IS PROVIDING SERVICES TOWARDS CHA, STEVEDORING, C & F, IN WHICH TRANSPORTATION IS AN INTEGRAL PART, AND THAT THE ASSESSEE IS NOT EXCLUSIVELY A TRANSPORT CONTRACTO R. WITH REGARD TO THE ASSESSEE'S PLEA THAT 3 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) SUBSTANTIAL PART OF THESE RECEIPTS WERE FROM TRANSPORTATION , THE AO TOOK THE VIEW THAT THE TRANSPORTATION EMANATED BY VIRTUE OF THE AGREEMENT TO PROVIDE OTHER SERVICES. WITH REFERENCE TO THE RECEIPTS FROM TOP 20 PARTIES THE AO NOTED THAT EXCEPTING A FEW RECEIPTS WHICH ARE EXCLUSIVELY FROM TRANSPORTATION, ALL OTHER RECEIPTS ARE INTERWOVEN AND ARE INEXTRICABLY LINKED TO EACH OTHER AND THEREFORE THE TRANSPORTATION RECEIPTS LOSE THEIR INDEPENDENT CHARACTER. THE AO ALS O NOTED THAT THE ASSESSEE HAD NOT GIVEN ITS VEHICLES ON HIRE AND HENCE NOT ENTITLED FOR HIGHER RATE OF DEPRECIATION. THE AO FURTHER OBSERVED THAT TIPPERS ARE NOT ROAD TRANSPORT VEHICLES AS PER DECISION OF A.P. HIGH COURT IN THE CASE OF CIT VS PROGRESSIVE E NGG. CO. (230 ITR 729) AND HENCE WOULD NOT BE ELIGIBLE FOR HIGHER DEPREDATION. THUS THE AO CONCLUDED THAT THE ASSESSEE WOULD NOT BE ENTITLED FOR HIGHER DEPREDATION. 6.1 ON THE OTHER HAND, THE AUTHORISED REPRESENTATIVE CONTENDED THAT THE NATURE OF ASSESSEE 'S BUSINESS WAS SHIPPING AND TRANSPORT AS SUGGESTED IN ITS NAME. IT WAS POINTED OUT THAT TO CARRY THE BUSINESS OF C & F AND STEVEDORING THE ASSESSEE NEED NOT REQUIRE OR OWN ANY VEHICLES; THAT A CHA AGENT DOES NOT REQUIRE TO UNDERTAKE. TRANSPORTATION. AS TH E ASSESSEE WAS ALSO ENGAGED IN TRANSPORTATION ACTIVITY APART FROM C & F AGENT, ITS OWN VEHICLES WHICH ARE USED IN ITS TRANSPORTATION BUSINESS. IT WAS CONTENDED THAT TRANSPORTATION IS A SEPARATE ACTIVITY, SEPARATELY IDENTIFIABLE AND BILLED ACCORDINGLY. COPI ES OF BILLS WERE ENCLOSED AS PART OF PAPER BOOK. THE ASSESSEE ALSO SUBMITTED THAT THE TURNOVER OF ITS BUSINESS WAS AS UNDER: CUSTOMS HOUSE AGENT 4,11,32,929/ - CARGO HANDLING SERVICES 16,54,97,772/ - PORT SERVICES 5,95,09,835/ - TRANSPORT 19,02,83,456 / - 34,75,21,824/ - 80,39,45,819/ - IT WAS POINTED OUT THAT THE MAJOR CHUNK OF ITS REVENUE WAS FROM TRANSPORT CONTRACT; AND THAT IF THE REIMBURSEMENTS WERE NOT RECKONED, 41% OF ITS REVENUE IS FROM TRANSPORT ACTIVITY. 6.2 IT WAS FURTHER SUBMITTED THAT THE LORRIES/ DUMPER/ TRAILERS WERE USED FOR THE BUSINESS OF RUNNING THEM ON HIRE 4 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) AND BILLED FOR SERVICES RENDERED FOR TRANSPORTATION OF GOODS AND RUNNING THE VEHICLES ON HIRE FOR ITS CUSTOMERS AND THAT ALL THE VEHICLES WERE USED FOR TRANSPORTING / RUNNING ON HI RE OF THIRD PARTIES AND NOT FOR THE BUSINESS OF C & F AGENT. IT WAS ALSO CONTENDED THAT THIS IS NOT A CASE WHERE THE BUSINESS OF C & F AGENT USED THE LORRIES/DUMPER/TRAILERS FOR HIMSELF FOR THE C & F ACTIVITY. IT WAS FURTHER CONTENDED THAT THE VEHICLES CAN NOT BE USED EXCEPT FOR TRANSPORTATION/HIRING CONTRACTS FOR THE A5SESSEE'S BUSINESS, AND THAT THE UTILIZATION OF THE VEHICLES WAS FOR THE SERVICE AS PER AGREEMENT IN THE NATURE OF EITHER TRANSPORTATION OR HIRING OF VEHICLES FOR TRANSPORTATION' AS PER TERM S OF CONTRACT AND NOT FOR ANY USE FOR TRADING OF GOODS OR PROCURING/ PROCESS/MANUFACTURING OF ANY GOODS FOR OWN BUSINESS . THUS IT WAS CONTENDED THAT THE CASE SQUARELY FALLS WITHIN THE CBDT CIRCULAR. IT WAS FURTHER SUBMITTED THAT DUMPERS ARE REGISTERED AS R OAD TRANSPORT VEHICLES WITH THE ROAD TRANSPORT AUTHORITY WITH REGISTRATION NUMBER AND IT IS NOT PURE MACHINERY, AND THAT AS PER CLARIFICATION OF ROAD TRANSPORT AUTHORITY DUMPERS ARE ROAD TRANSPORT VEHICLES TO BE REGISTERED UNDER MOTOR VEHICLE ACT. THE AU THORISED REPRESENTATIVE FURTHER POINTED THAT ALREADY FOR A.Y.2011 - 12 AND A.Y.2012 - 13 THE LD.CIT(A), GUNTUR AND CIT(A) - 1, VISAKHAPATNAM HAS ALLOWED RELIEF IN FAVOUR OF THE ASSESSEE, AND ALSO RELIED ON THE VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED ABOVE. 7. THE PERUSAL OF THE BILLS AND INVOICES FILED BY THE ASSESSEE SHOW THAT THE ASSESSEE HAD CHARGED SEPARATELY FOR THE GOODS TRANSPORT SERVICES. THE TRANSPORTATION CHARGES RELATED TO TRANSPORTATION OF GOODS/ CONTAINER/ CARGO FROM CFS TO PLANT, PORT OR OTHER DES TINATIONS FOR VARIOUS PARTIES. ALL THESE CLEARLY INDICATE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS ACTIVITY OF TRANSPORTING GOODS TO VARIOUS PARTIES AS PER THEIR BUSINESS REQUIREMENT APART FROM C & F ACTIVITY. THE REVENUE FROM THE TRANSPORTATION ACTIVI TY ARE ALSO SUBSTANTIAL. THEREFORE, IT CANNOT BE SAID THAT ITS TRANSPORTATION ACTIVITIES ARE MERELY INCIDENTAL/ ANCILLARY TO THE C & F SERVICES. I ALSO FIND MERIT IN THE ASSESSEE'S CONTENTION THAT C & F AGENCY DOES NOT NECESSARILY INVOLVE TRANSPORTATION. 7.1 IN THE CASE OF ABC INDIA LTD. VS. CIT (226 ITR 914), THE GAUHATI HIGH COURT HELD THAT IN THE BUSINESS OF TRANSPORTATION OF GOODS BY ROAD, THE TRANSPORTER BOOKS GOODS AT ITS OFFICE FOR TRANSPORTATION TO DESTINATION OR LIFTS GOODS FROM THE PARTY'S OFFICE / GODOWN FOR SUCH 5 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) TRANSPORTATION AND IN THE PROCESS USES ITS OWN TRUCKS FOR SUCH TRANSPORTATION FROM BOOKING POINT TO DESTINATION AND CHARGES FREIGHT (HIRE) FROM OWNER OF GOODS IS A BUSINESS OF RUNNING THE TRUCKS ON HIRE AND ENTITLED TO HIGHER DEPREDATION. THE DEC ISION IN THE CASE OF BOTHRA SHIP PING SERVICES WAS RENDERED IN SIMILAR FACTUAL MATRIX AND APPLICABLE TO ASSESSEE'S CASE. 7.2 THE HON'BLE A.P. HIGH COURT IN THE CASE OF CIT VS. AM CONSTRUCTIONS (238 ITR 775) HELD THAT TIPPERS ARE ELIGIBLE FOR HIGHE R RATE OF DEPRECIATION AS THE SUBSTANTIAL INCOME OF THE ASSESSEE IS FROM HIRING OF TIPPERS NOTWITHSTANDING THE FACT THAT THE ASSESSEE USED IT FOR ITS AGRICULTURAL OPERATIONS ALSO. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SC THAKUR AND BROS (322 1TR 463) HELD T HAT WHERE THE ASSESSEE, A CIVIL CONTRACTOR WAS REQUIRED TO TRANSPORT EARTH FROM ONE PLACE TO ANOTHER AND ITS BUSINESS RECEIPTS INCLUDED CHARGES FOR TRANSPORTING GOODS TO A LARGE EXTENT, THE ASSESSEE WOULD BE ENTI TLED TO DEPRECIATION ON TRUC KS/ DUMPER AT A HIGHER RATE, IN VIEW OF THE CBIDT CIRCULAR NO.652 DATED 14.06.1993. THE HON'BLE HIGH COURT HELD THAT THE CIRCULAR MAKES IT CLEAR THAT THE HIGHER RATE OF DEPRECIATION IS ALSO ADMISSIBLE WHEN THE MOTOR LORRY IS USED BY THE ASSESSEE IN HIS OWN BUSINESS OF TRANSPORTATION OF GOODS ON HIRE. THUS, IT IS NOT NECESSARY THAT THE ASSESSEE HAS TO BE EXCLUSIVE TRANSPORTATION CONTRACTOR TO CLAIM THIS RELIEF. 7.3 IN THE LIGHT OF THE CBDT CIRCULAR NO. 652 DATED 14.05.1993, AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE, IT IS HELD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF HIGHER DEPRECIATION AS IT IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF GOODS ON HIRE. MERELY BECAUSE THE ASSESSEE IS ALSO ENGAGED IN OTHER BUSINESS ACTIVITY WHICH IS A CLOSELY IN TERRELATED BUSINESS CANNOT BE A VALID GROUND TO DENY SUCH RELIEF TO THE ASSESSEE. IT IS ALSO NOTED THAT SIMILAR VIEWS WERE TAKEN BY THE CIT(A)S IN THE ASSESSEE'S CASE FOR EARLIER TWO YEARS. IN THESE SCENARIO, I CONSIDER IT APPROPRIATE TO DIRECT THE AO TO D ELETE THE IMPUGNED ADDITION. 4 . LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE GROUNDS OF APPEAL AND ALSO THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER . 6 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) 5. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE VERY SAME ISSUE CAME UP BE F ORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011 - 12 IN ITA NO. 268/VIZ/2016, DATED 22/12/2017 , WHEREIN T HE TRIBUNAL HAS CONSIDERED THE ISSUE AND PASSED AN ORDER IN FAVOUR OF THE ASSESSEE , AND SUBMITTED THAT THE SAME MAY BE FOLLOWED. 6 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 7 . THE ONLY ISSUE BEFORE OUR CONSIDERATION IS WHETHER ASSESSEE IS ELIGIBLE FOR HIGHER DEPRECIATION AT 30% ON TRAILERS, DUMPERS & MOTOR LORRIES , WHICH WERE U SED FOR TRANSPOR TA TION BUSINESS. THE VERY SAME ISSUE HAS BEEN CONSIDERED BY TH E COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE ITA NO. 268/VIZ/2016, DATED 22/12/2017 AND UPHELD THE ORDER OF THE LD. CIT(A) BY OBSERVING AS UNDER: - 10. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER ASSESSEE IS ELIGIBLE FOR HIGHER DEPRECIATION OR NOT. THE CASE OF THE ASSESSEE IS THAT ASSESSEE IS CARRYING ON THE BUSINESS OF C & F AGENCY AND ALSO TRANSPORTATION BUSINESS. INSOFAR AS TRANSPORTATION BUSIN ESS, THE ASSESSEE HAS USED TRAILERS, DUMPERS & MOTOR LORRIES AND SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE IS ENTITLED FOR DEPRECIATION AT 30%. THE CASE OF THE ASSESSING OFFICER IS THAT THE MAIN ACTIVITY OF THE ASSESSEE IS ONLY C & F AGENCY AND TRANS PORTATION BUSINESS CARRIED OUT BY THE ASSESSEE BY USING TRAILERS, DUMPERS & MOTOR LORRIES IS ONLY INCIDENTAL TO THE BUSINESS OF THE ASSESSEE. THEREFORE, HE ONLY ALLOWED NORMAL DEPRECIATION AT 15%. BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED ALL THE DET AILS OF THE BUSINESS RECEIPTS. THE LD. CIT(A) BY CONSIDERING THE DETAILS, GAVE A CATEGORICAL FINDING THAT IN THE TOTAL 7 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) GROSS RECEIPTS OF RS. 55,75,16,582/ - , THE ASSESSEE HAS RECEIVED RS. 22,99,64,332/ - FROM TRANSPORT BUSINESS. THEREFORE, HE IS OF THE OPIN ION THAT THE TRANSPORTATION BUSINESS IS CARRIED OUT BY THE ASSESSEE BY USING THE VEHICLES, SUCH AS TRAILERS, DUMPERS & MOTOR LORRIES IS NOT AN INCIDENTAL TO THE BUSINESS OF THE ASSESSEE, AS THE RECEIPTS FROM THE TRANSPORTATION ARE SUBSTANTIAL AND DIRECTED THE ASSESSING OFFICER TO ALLOW HIGHER RATE OF DEPRECIATION. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE LD. CIT(A)S ORDER IS EXTRACTED AS UNDER: - 5.3.1 ON THE OTHER HAND, THE AR CONTENDED THAT THE TRANSPORTATION IS PART OF THE MAIN BUSINESS OF THE ASSESSEE AND, THEREFORE, IT IS NOT MERELY INCIDENTAL TO CLEARING AND FORWARDING BUSINESS. IT IS FURTHER SUBMITTED THAT CLEARING AND FORWARDING AGENCY BUSINESS DOES NOT AUTOMATICALLY INVOLVE TRANSPORTATION. IN FACT, IT IS CONTENDED THAT TRANSPORTATI ON IS PART OF THE MAIN BUSINESS OF THE ASSESSEE AS CAN BE SEEN FROM THE ASSESSEE'S NAME ITSELF I.E 'SRIVALLI SHIPPING AND TRANSPORT'. FURTHER, THE AR FURNISHED THE DETAILS OF THE TURNOVER FOR THE PREVIOUS YEAR RELEVANT FOR THE ASST. YR. 2011 - 12, AS DETAILED BELOW: SERVICE DETAILS TURNOVER AMOUNT C H A RECEIPTS 490,44,602 CARGO HANDLING RECEIPTS 843,17,989 PORT SERVICE RECEIPTS 430,66,123 TRANSPORT RECEIPTS 2299,64,332 REIMBURSEMENT RECEIPTS 1511,23,536 5.3.2 I HAVE CAREFULLY CONSIDERED THE ABOVE. OUT OF THE GROSS BUSINESS RECEIPTS OF RS.55,75,16,582/ - , THE ASSESSEE RECEIVED RS.22,99,64,332/ - FROM ITS TRANSPORT BUSINESS. THUS, IT IS CLEAR THAT TRANSPORTATION IS NOT MERELY INCIDENTAL TO THE ASSESSEE'S BUSINESS AS THE RECEIPTS FROM TRANSPORT B USINESS ARE ALSO SUBSTANTIAL. 5.3.3 I HAVE ALSO PERUSED THE DECISIONS OF THE HON'BLE SUPREME COURT AND HIGH COURTS RELIED ON BY THE AR IN THIS REGARD. THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT V A.M. CONSTRUCTIONS (SUPRA) HAS HELD THAT TIPPERS ARE ELIGIBLE FOR HIGHER RATE OF DEPRECIATION AS THE SUBSTANTIAL INCOME OF THE ASSESSEE IS FROM HIRING OF TIPPERS. THE RELEVANT PORTION OF THE ORDERS OF THE HON'BLE HIGH COURT IS EXTRACTED BELOW: - THE FACT THAT THE TIPPERS ARE ELIGIBLE FOR DEPRECIA TION IS NOT DISPUTED, BUT THE O DISPUTE IS WITH REGARD TO THE RATE AT WHICH THE DEPRECIATION TO BE ALLOWED. I FINDING OF THE TRIBUNAL IS THAT IN VIEW OF THE FACT THAT 8 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) SUBSTANTIAL INCOME OF T ASSESSEE IS FROM HIRING OF THESE TIPPERS HE WOULD BE ENTITLED TO DEPRECIATION 40% NOTWITHSTANDING THE FACT THAT HE USES THEM FOR HIS AGRICULTURAL OPERATIC ALSO. FURTHER, SUB - ITEM (2)(U) OF ITEM II OF APPENDIX I DOES NOT SAY THAT THE MOL LORRIES SHOULD BE EXCLUSIVELY USED FOR HIRE OR BUSINESS BY THE ASSESSEE 5.3.4 THE HO N'BLE SUPREME COURT IN THE CASE OF GUPTA GLOBAL EX I M (P) LTD. (SUPRA) HAS APPROVED THE SIMILAR VIEW. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW : WHAT IS RELEVANT FOR CONSIDERATION UNDER SUB - ITEM(2)(II) OF ITEM III OF APPENDIX I TO THE I.T. RULES 1962 IS WHETHER THE ASSESSEE WAS IN THE BUSINESS OF HIRING OUT HIS TRUCKS IN ADDITION TO HIS BUSINESS OF TRADING IN TIMBER. THE ORDER OF ASSESSMENT CLEARLY INDICATES THAT THE ASSESSEE WAS ONLY IN THE BUSINESS OF TRADING IN TIMBER. WE DO NOT HAVE THE RETURN S FILED BY THE ASSESSEE BEFORE US. WE DO NOT HAVE THE CONSTITUTION OF THE ASSESSEE COMPANY BEFORE US. THERE IS NO EVIDENCE TO INDICATE THAT THE ASSESSEE WAS IN THE BUSINESS OF HIRING OUT MOTOR LORRIES FOR RUNNING THEM TO EARN BUSINESS INCOME. THE ENTIRE IN FERENCE IS DRAWN BY CIT(A) ONLY ON THE FOOTING THAT THE AO HAD TREATED RS.12,59,639 AS PART OF TOTAL BUSINESS INCOME WHICH IS NOT DETERMINATIVE OF THE ABOVE TEST VIZ., WHETHER THE TRUCKS WERE USED IN THE TRANSPORTATION BUSINESS AS CLAIMED BY THE ASSESSEE. FOR THE AFORESTATED REASONS, WE SET ASIDE THE IMPUGNED JUDGMENT OF THE HIGH COURT AND WE REMIT THE MATTER TO CIT(A) FOR DE NOVO EXAMINATION OF THE CASE IN ACCORDANCE WITH LAW. 5.3.5 IN VIEW OF THE FACTS NARRATED ABOVE AND ALSO IN THE LIGHT OF THE RATIO LAI D DOWN BY THE HON'BLE HIGH COURT OF ANDHRA PRADESH AND THE HON'BLE SUPREME COURT, DISCUSSED ABOVE, I AM OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION AT HIGHER RATE AS IT IS RUNNING ITS VEHICLES I.E. MOTOR LORRIES, TRAILERS AND DUMPERS ON HIRE . ACCORDINGLY, THE AO IS DIRECTED TO ALLOW THE DEPRECIATION CLAIM OF THE ASSESSEE. 11. FROM THE ABOVE ORDER OF THE LD. CIT(A), IT IS CLEAR THAT TRANSPORTATION BUSINESS CARRIED OUT BY THE ASSESSEE BY USING TRAILERS, DUMPERS & MOTOR LORRIES IS NOT AN INCIDENTAL TO THE BUSINESS OF THE ASSESSEE. OUT OF THE GROSS RECEIPTS OF RS.55,75,16,582/ - , THE ASSESSEE RECEIVED RS. 22,99,64,332/ - . THE LD. DEPARTMENTAL REPRESENTATIVE FAILED TO PRODUCE ANY MATERIAL TO SHOW THAT THE ABOVE FINDING GIVEN BY THE LD. CIT(A ) IS NOT CORRECT. THEREFORE, BY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). 9 ITA NO. 340/VIZ/2017 ( M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD. ) 8 . R ESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011 - 12 , WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A). THUS, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 5 T H DAY OF APRIL , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 5 T H APRIL , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. SRIVALLI SHIPPING & TRANSPORT PVT. LTD., 23 - 22 - 21, 2ND FLOOR, SIVALAYAM STREET, OLD TOWN AREA, VISAKHAPATNAM. 2. THE REVENUE - ACIT, CIRCLE - 4(1), VISAKHAPATNAM. 3. THE CIT - 2, VISAKHAPATNAM. 4. THE CIT(A) - 2, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.