Asst.Commissioner of Income Tax Circle-4, Nagpur V. M/s GST Infrastructure, Nagpur

ITA 95/NAG/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3112 (ITAT-NAGPUR)
• Duration Of Justice: 7 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 20-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P T IWARI
• Keywords: Depreciation

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 95 & 96 / N AG / 20 1 2 ( ASSESSMENT YEAR S : 200 7 - 0 8 & 200 8 - 0 9 ) ACIT, CIRCLE 4 , NAGPUR (MS) - 440 001 VS. M/S GST INFRASTRUCTURE MAK, AZAD BUILDING, GANDHIBAGH, NAGPUR - 10. PAN/GIR NO. : A A GF C 5658 L ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : M R. D.P.TIWARI /ASSESSEE BY : MR. K.P.DEWANI DATE OF HEARING : 2 9 TH JAN ., 201 3 DATE OF PRONOUNCEMENT : 6 TH FEB. ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E SE TWO APPEALS HAVE BEEN PREFERRED BY THE DEPARTMENT BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - I I , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YE AR 200 7 - 0 8 AND 200 8 - 0 9 , RESPECTIVELY , WHICH HAVE BEEN HEARD THROUGH E - COURT, MUMBAI . 2 . THE DEPARTMENT IS OBJECTING IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF DEPRECIATION ON HIGHER RATE AT RS. 9,42,621/ - FOR THE ASSESSMENT YEAR 2007 - 08 AND AT RS .78,11,531/ - FOR ASSESSMENT YEAR 2008 - 09, RESPECTIVELY . ITA NO S . 95 & 96 /20 1 2 2 3 . SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE , BOTH THESE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER TOGETHER. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS DOING TRANSPORTATION BUSINESS. THE COMPANY IS ENGAGED IN THE TRANSPORTATION OF READY MIX CONCRETE FROM PLANTS OF L&T, LAFARGE ETC. LOCATED AT NEW DELHI AND NAGPUR. THE READY MIX CONCRETE IS TRANSPORTED TO THE NEAR BY PLACES AND IN AROUND NEW DELHI AND NAGPUR. THE TRANSPORTATION IS DONE THROUGH CONCRETE MIXERS (PUMPS) PURCHASED FROM GREAVES COTTON AND SCHIWING STETTER WHICH ARE MOUNTED ON THE TRUCKS PURCHASED FROM ASHOK LEYLAND AND TATA. THE ASSESSEE SUBMITTED AUDIT REPORT IN FOR NO. 3CB. THE ASSESSEE ALSO PRODUCED BOOKS AND BILLS/VOUCHERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH WERE VERIFIED ON TEST CHECK BASIS. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE BASIS OF COMPUTING DEPRECIATION @25% ON BOTH TRUCKS AND CONCRETE MIXER AS CLAIMED. IT WAS EXPLAINED THAT THE CONCRETE MIXERS (PUMPS0 MOUNTED ON TRUCKS TOGETHER ARE CALLED AS TRANSIT MIXERS. THESE PUMPS ARE FITTED WITH A WATER TANK OF 600 LTR. CAPACITY. WHILE THE TRANSIT MIXER IS ON THE MOVE, RMC MATERIAL (CEME NT, GITTI ETC.) IS ROTATEDIN THE DRUM OF PMP AND WATER AND IS SUPPLIED INTO IT TO KEEP IT WET. THE SURFACE OF THE PUMP GETS DETERIORATED FAST DUE TO CONSTANT ROTATION OF RAW MATERIAL ON ITS SURFACE. THE LIFE OF THE PUMP IS NOT MORE THAN FOUR TO FIVE YEARS. THE PUMP ITSELF IS OF NO USE. A PUMP MOUNTED ON THE TRUCK CAN BE MOVED FROM A PLANT TO THE PLACE OF REQUIREMENT OF RMC MATERIAL. AS THE ITA NO S . 95 & 96 /20 1 2 3 ASSESSEE HAS PILED THESE FOR HIRE CHARGES ON OTHER CONTRACT, DEPRECIATION, THEREFORE, IS CLAIMED ON HIGHER SIDE. HOWEVE R, THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO. RELIANCE WAS PLACED ON A DECISION IN THE CASE OF POPULAR BOREWELL SERVICES, REPORTED IN 1 94 ITR 12 (MAD) , WHEREIN IT WAS HELD THAT, BOREWELL RISE AND COMPRESSOR IS INDEPENDENT MACHINERY INSTALLE D ON TRUCK CHASSIS AND IT IS NOT USED TO CARRY GOODS. ACCORDINGLY, DEPRECIATION WAS ALLOWED AT THE NORMAL RATE ON THE CONCRETE MIXER. 5 . ASSESSEE PREFERRED BEFORE THE LEARNED CIT(A) FOR BOTH OF THE YEARS. SUBMISSIONS MADE BEFORE THE AO WERE REITERATED B EFORE THE LEARNED CIT(A) . WRITTEN SUBMISSIONS WERE ALSO FILED BEFORE THE LEARNED CIT(A) , WHICH ARE INCORPORATED IN THE ORDER OF THE LEARNED CIT(A) AT PAGES 4 & 5. RELIANCE WAS PLACED ON VARIOUS CASE LAWS I.E. IN THE CASE OF SHAH CONSTRUCTION CO. LTD. VS. C IT, REPORTED IN 188 ITR 537 (BOM) , IN THE CASE OF GUJCO CARRIERS VS. CIT, REPORTED IN (2002) 256 ITR 50 (GUJ.) AND IN THE CASE OF CIT VS. GALORD CONSTRUCTION, REPORTED IN 190 TAXMAN 406 (KER) . AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, LEARNED CIT(A) FOUND THAT THE CONCRETE MIXERS IS FITTED WITH THE TRUCK WHICH CANNOT BE SEPARATED FROM THE TRUCK. IT IS ALSO NOTED BY THE CIT(A) THAT WITHOUT CONCRETE MIXER, THERE IS NO USE OF THE TRUCK AS CONCRETE MIXER IS A SPECIAL TYPE WHICH IS A TTACHED WITH THE TRUCK PERMANENTLY. LIFE OF THE CONCRETE MIXER IS ALSO SHORT WHICH IS 4 T O 5 YEARS . THE CIT(A) ALSO NOTED THAT ROTARY CONTAINER IS NOT AN INDEPENDENT PLANT AND MACHINERY BUT PART OF MOTOR LORRY. ITA NO S . 95 & 96 /20 1 2 4 CIT(A) ALSO VIEWED THAT THE CONCRETE MIXER I. E. ROTARY CONTAINER IS A BODY INSTALLED ON CHASSIS AND, THEREFORE, ELIGIBLE FOR DEPRECIATION AS PROVIDED ON MOTOR LORRIES. THE CONTENTION OF THE ASSESSEE THAT IN ORDER TO CARRY THE GOODS LIKE RMC SPECIFIC BODY IS REQUIRED TO BE MADE SO AS TO TRANSPORT THE GOODS LIKE RMC FROM ONE DESTINATION TO ANOTHER. ACCORDINGLY, IT WAS FOUND THAT THE BODY ID A ROTARY CONTAINER PLACED ON CHASSIS HAS NO INDEPENDENT UTILITY AS A PLANT & MACHINERY. THE BODY IS SIMILAR TO FREEZED CONTAINER FOR CARRYING ICE CREAM OR MILK OR HE ATED CONTAINER CARRYING BITUMEN ETC. ACCORDINGLY, LEARNED CIT(A) HELD THAT CRANE MOUNTED ON A TRUCK IS WITHIN EXPRESSION MOTOR LORRIES MOTOR VEHICLE LIKE FIRE TRUCKS FOR LIFT TRUCKS AND CRANE TRUCKS WHICH ARE DESIGNATED SPECIAL SERVICE FALL WITHIN THE CA TEGORY OF MOTOR TRUCKS . IN SUPPORT OF ITS CONTENTION, RELIANCE PLACED BY THE LEARNED AR ON THE DECISION OF THE SHAH CONSTRUCTION CO. LTD. (SUPRA) AND GUJCO CARRIERS (SUPRA) , WAS FOUND ACCEPTABLE. THE DECISION OF THE HON BLE MADRAS HIGH COURT IN THE CASE OF POPULAR BOREWELL SERVICES (SUPRA) WAS FOUND DISTINGUISHABLE AS BOREWELL RISE AND COMPRESSOR IS INDEPENDENT MACHINERY INSTALLED ON TRUCK CHASSIS AND IT IS NOT USED TO CARRY GOODS. ULTIMATELY IT WAS HELD THAT IT IS JUST A LORRY TO CARRY A SPECIAL TYPE OF MATERIAL FROM PLANT TO THE SITE FILLED WITH SPECIAL MECHANISM BUT THIS MACHINERY NOT MUCH USE WHEN USED INDEPENDENTLY AS IN CASE OF BOREWELL, WHICH IS FOR A SPECIFIC PURPOSE OF DRILLING BOREWELLS. ACCORDINGLY, DEPRECIATION WAS ALLOWED AT HIGHER RATES AS CL AIMED BY ITA NO S . 95 & 96 /20 1 2 5 THE ASSESSEE FOR BOTH OF THE YEARS. NOW, THE DEPARTMENT IS IN APPEALS HERE BEFORE THE TRIBUNAL . 6 . LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. ON THE OTHER HAND LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A) . FURTHER A TTENTION OF THE BENCH WAS DRAWN AT PAGE 32 OF THE COMPILATION WHICH IS A COPY OF THE DECISION IN THE CASE OF M/S JINDAL EARTHMOVERS PVT. LTD. , PASSED BY THIS TRIBUNAL IN ITA NO. 7814/MUM/ 2010 FOR THE ASSESSMENT YEAR 2007 - 08 , VIDE ORDER DATED 11 - 7 - 2012 , WHER EIN SIMILAR FACTS WERE INVOLVED. 7 . WE HAVE HEARD RIVAL SUBMISSION AND CONSIDERED THEM CAREFULLY. WE HAVE ALSO PERUSED THE ORDER OF AO AND CIT(A) . AFTER CONSIDERING ALL THE MATERIAL, WE FOUND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) , WHO HAS DECIDE D THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF GUJCO CARRIERS (SUPRA ). SIMILAR ISSUE WAS INVOLVED IN THE CASE O F M/S JINDAL EARTHMOVERS PVT. LTD . (SUPRA ), WHEREIN THE TRIBUNAL HAS HELD THAT ON THE ASSET ATTACH ED WITH THE LORRY, HIGHER DEPRE C I ATION IS ALLOWABLE. WHILE HOLDING SO, THE DECISION OF THE HON GUJARAT HIGH COURT IN THE CASE OF GUJCO CARRIERS (SUPRA) AND THE DECISION OF ANSARI HOLDING & INVESTMENT (P) LTD. VS. DCIT, 12 SOT 438 , WHEREBY I T WAS HELD THAT MOBILE CRANES REGISTERED AS HEAVY MOTOR VEHICLE ARE ELIGIBLE FOR DEPRECIATION AT THE RATE OF 40%, ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE. SIMILAR FACTS ARE INVOLVED HERE IN THE PRESENT FACTS OF THE CASE. LEARNED CIT(A) HAS GIVEN A CATE GORICAL FINDING THAT THE CONCRETE ITA NO S . 95 & 96 /20 1 2 6 MIXERS CANNOT BE USED SEPARATELY WITHOUT MOTOR LORRY AS THE SAME IS BEING FITTED ON THE CHASSIS OF MOTOR LORRY. THE CONCRETE MIXER CANNOT BE USED INDEPENDENTLY WITHOUT MOTOR LORRY AS GOODS STORED IN CONCRETE MIXER HAVE TO BE TRANSPORTED WHILE STORING IN THE CONCRETE MIXER, THEREFORE, IT WAS TREATED THAT THIS IS A PART OF MOTOR LORRY AND HIGHER DEPRECIATION IS ALLOWABLE. THIS FINDING OF THE LEARNED CIT(A) , IN OUR CONSIDERED VIEW, ARE REASONABLE FINDING. ACCORDINGLY, WE CONF IRM THE DECISION OF THE LEARNED CIT(A) FOR BOTH OF THE YEARS. 8 . IN THE RESULT , BOTH THE APPEAL S OF THE DEPARTMENT ARE DISMISSED . ORDER PRONOUNCED IN THE E - COURT ON THIS 6 TH DAY OF FEB , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 6 / 02 / 2 01 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI