ACIT CC.14, MUMBAI V. OCTOPUS PROJECTS & SHIPPING P. LTD ( NOW MERGED WITH MAEARSK INDIA P. LTD), MUMBAI

ITA 4177/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7305 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 07-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMJEET SINGH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C ,MUMBAI BEFPRE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI A. L. GEHLOT, ACCOUNTANT MEMBER I.T.A .NO. 4177/MUM/2009 (A.Y. 2005-06 ) ASST.COMMR. OF INCOME-TAX , CENT.CIR.14, 11 TH FLOOR, OLD CGO BLDG.ANNEXE, M.K.ROAD, MUMBAI-400 020. VS. M/S.OCTOPUS PROJECTS & SHIPPING P.LTD. (NOW MERGED WITH MAEARSK INDIA P. LTD.), CG HOUSE, 11 TH FLOOR, DR.A.B. RD., WORLI COLONY, MUMBAI-400 030. PAN: AAACM8741P APPELLANT RESPONDENT APPELLANT BY SHR I PARAMJEET SINGH. RESPONDENT BY SHRI N IRAJ SHETH. O R D E R PER D. MANMOHAN, VICE PRESIDENT: THIS IS AN APPEAL FILED AT THE INSTANCE OF THE REVE NUE. THE ONLY GROUND URGED IN THIS APPEAL IS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE COMPANY I S ENTITLED TO HIGHER RATE OF DEPRECIATION AS IT IS USING THE VEHI CLES FOR TRANSPORTING GOODS ON HIRE ON BEHALF OF ITS CLIENTS AND NOT FOR ITS OWN PURPOSES. THE ASSESSEE IS A COMPANY INCORPORATED UNDER THE CO MPANIES ACT, 1956, AND WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF CA RGO AND EMPTY CONTAINERS BY TRUCKS BETWEEN THE PORTS, CONTAINER FREIGHT STATION S AND THE SHIPPERS LOCATIONS. IN RESPECT OF THE VEHICLES OWNED BY THE ASSESSEE AN D UTILIZED IN ITS OWN BUSINESS OF TRANSPORTING CARGO ETC., THE ASSESSEE CLAIMED D EPRECIATION @ 40% ON THE GROUND THAT THE VEHICLES/TRAILORS WERE USED IN THE BUSINESS OF RUNNING THEM ON HIRE. THE A.O. WAS, HOWEVER, OF THE OPINION THAT US ING THE VEHICLES IN ITS OWN ITA 4177/M/09 2 BUSINESS WOULD NOT AMOUNT TO RUNNING THEM ON HIRE A ND, BY FOLLOWING THE ORDER PASSED FOR THE ASSESSMENT YEAR 2004-05, DEPRECIATIO N ON THIS ASSET WAS RESTRICTED TO 20%. 2. ON AN APPEAL FILED BY THE ASSESSEE, THE LD. CIT( A) FOLLOWED THE DECISION OF THE ITAT IN THE ASSESSEES OWN CASE (ITA NO.2447/MU M/07) TO HOLD THAT THE ASSESSEE IS ENTITLED TO A HIGHER RATE OF DEPRECIATI ON I.E. 40%. 3. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. T HE LD. COUNSEL PLACED BEFORE US A COPY OF THE ORDER OF THE ITAT IN RESPEC T OF THE ASSESSMENT YEAR 2003- 04 (SUPRA) TO SUBMIT THAT THIS ISSUE WAS ALREADY CO NSIDERED BY THE ITAT IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. FACTS BEI NG SAME, THE LD. COUNSEL SUBMITTED THAT THE LD. CIT(A) WAS JUSTIFIED IN ACCE PTING THE PLEA OF THE ASSESSEE WITH REGARD TO ALLOWABILITY OF DEPRECIATION AT 40%. HE HAS ALSO RELIED UPON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. S.C. THAKUR & BROS. (180 TAXMAN 348) WHEREIN THE HONBLE BOMBAY HIGH COURT HELD THAT DEPRECIATION IS ALLOWABLE AT A HIGHER RATE IF THE A SSESSEE UTILIZES ITS OWN VEHICLES FOR TRANSPORTING THE GOODS FROM ONE PLACE TO ANOTHE R ON BEHALF OF OTHERS. IT IS NECESSARY TO NOTE IT HERE THAT IN THE CASE OF SRIDE VI STEEL & CEMENT STORES (106 ITD 326) THE ITAT (SMC BENCH) (WHEREIN ONE OF US IS A PARTY) HELD THAT MERE UTILISATION OF VEHICLES FOR TRANSPORTATION OF GOODS ON CONTRACT BASIS WOULD NOT AMOUNT TO UTILISATION OF VEHICLES ON HIRE. HOWEVER, HAVING REGARD TO THE DECISION OF THE JURISDICTIONAL HIGH COURT AND ALSO CONSISTEN T WITH THE VIEW TAKEN BY THE ITAT IN THE ASSESSEES OWN CASE FOR THE EARLIER YEA R, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVE NUE. ITA 4177/M/09 3 ORDER PRONOUNCED ON THE 25TH DAY OF MARCH, 20 10. SD/- SD/- (A.L. GEHLOT) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MU MBAI: 25TH MARCH, 2010 COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A),CENT.III,MUMBAI. 4 CIT, CENT.I,MUMBAI. 5.DR,C BENCH,MUMBAI. (TRUE COPY) BY ORDER, NG: ASST.REGISTRAR, ITAT, MUMBAI. ITA 4177/M/09 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 24-3-10 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 25-3-10 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER