URMILA & CO. LTD., V. DCIT CENT. CIR. - 24,

MA 184/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6673 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2002-2003
• Appeal Filed On: 24-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SWTA JAIN
• Keywords: Depreciation

Judgement Text

1 MA NO.184/MUM/2011 ARISING OUT OF ITA NO. 1276/MUM/2006 (ASST YEAR 2002-03 ) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI J SUDHAKAR REDDY , AM & SHRI VIJAY PAL RAO, JM MA NO.184/MUM/2011 ARISING OUT OF ITA NO. 1276/MUM/2006 (ASST YEAR 2002-03 ) M/S URMILA & CO LTD MACHINNON MACKENZIE BUILDING 4 S V MARG BALLARD ESTATE MUMBAI 400 001 VS THE DY COMMR OF INCOME TAX CEN/CIR 24 & 28, MUMBAI (APPLICANT) (RESPONDENT) PAN NO. AAACU1651J ASSESSEE BY MS SWTA JAIN REVENUE BY SHRI A K NAYAK PER VIJAY PAL RAO, JM BY WAY OF THIS MISCELLANEOUS APPLICATION, THE ASSES SEE IS SEEKING RECTIFICATION OF THE MISTAKE IN THE ORDER OF THIS TRIBUNAL IN ITA NO.1276/MUM/2006 DATED 21.1.2001 FOR THE AY 2002-03. 2 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR OF THE ASSESSEE HAS POINTED OUT THAT WHILE DECIDING THE ISSUE OF HIGHER DEPRECIATION @ 40% ON THE TRACTORS/TRAILERS IN THE REVENUES APPEAL, THE TRIBUNAL HAS CONCLUDED IN PAR A 11.5 THAT THE ASSESSEE IS IN THE BUSINESS OF TRANSPORTATION OF GOODS ON HIRE BASIS. THEREFORE, HIGHER RATE OF DEPRECATION WILL BE ADMISSIBLE ON THE MOTOR LORRIES USED BY THE ASSESSEE FOR THE BUSINESS OF TRANSPORTATION OF GOODS ON HIRE. HOWEV ER, THERE IS AN ERROR IN PARA 11.6 OF 2 MA NO.184/MUM/2011 ARISING OUT OF ITA NO. 1276/MUM/2006 (ASST YEAR 2002-03 ) THE IMPUGNED ORDER, WHICH PERTAINS TO THE RESULT OF THE ISSUE OF HIGHER DEPRECATION AND INSTEAD OF DISMISSING THE GROUND OF THE REVENU ES APPEAL, IT HAS BEEN WRITTEN AS ALLOWED THE GROUND OF APPEAL. 2.1 ON THE OTHER HAND, THE LD DR FAIRLY ACCEPTED TH E FACTUAL POSITION. 3 AFTER CONSIDERING THE RIVAL CONTENTION AND CAREFU LLY PERUSED THE IMPUGNED ORDER, WE FIND THAT THERE IS APPARENT ERROR IN PARA 11.6 OF THE IMPUGNED ORDER, WHICH IS IN CONTRADICTION WITH THE REASON AND CONCLUSION FOR DECIDING THE ISSUE OF HIGHER DEPRECIATION. WE REPRODUCE THE PARA 11.5 AND 11.6 O F IMPUGNED ORDER AS UNDER FOR READY REFERENCE: 11.5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEVANT RECORD. IT IS UNDISPUTED FACT THAT THE ASSESSEE IS IN THE B USINESS OF TRANSPORTATION OF THE GOODS ON HIRE BASIS. THEREFORE, IN VIEW OF T HE CIRCULARS NO.652 DATED 15.6.1993 IT HAS BEEN CLARIFIED THAT HIGHER R ATE OF DEPRECIATION WILL BE ADMISSIBLE ON THE MOTOR LORRIES USED BY THE ASSE SSEE FOR THE BUSINESS OF TRANSPORTATION OF GOODS ON HIRE. THE RELEVANT P ORTION OF THE CIRCULAR NO. 652 DATED 14.5.1993 IS REPRODUCED AS UNDER : UNDER SUB-ITEM 2(II) OF ITEM NO. III OF APPENDIX I TO THE INCOME-TAX RULES, 1962, HIGHER RATE OF DEPRECIATION IS ADMISSIBLE ON MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIS USED IN A BUSINESS OF RUNNI NG THEM ON HIRE. A QUESTION HAS BEEN RAISED AS TO WHETHER, FOR DERIVIN G THE BENEFIT OF HIGHER DEPRECIATION, MOTOR LORRIES MUST BE HIRED OUT TO SO ME OTHER PERSON OR WHETHER THE USER OF THE SAME IN THE ASSESSEE'S BUSI NESS OF TRANSPORTATION OF GOODS ON HIRE WOULD SUFFICE. 2. IN BOARD'S CIRCULAR NO. 609, DATED 29TH JULY, 19 91*, IT WAS CLARIFIED THAT WHERE A TOUR OPERATOR OR TRAVEL AGENT USES MOTOR BU SES OR MOTOR TAXIS OWNED BY HIM IN PROVIDING TRANSPORTATION SERVICES T O TOURISTS, HIGHER RATE OF DEPRECIATION WOULD BE ALLOWED ON SUCH VEHICLES. IT IS FURTHER CLARIFIED THAT HIGHER DEPRECIATION WILL ALSO BE ADMISSIBLE ON MOTOR LORRIES USED IN THE ASSESSEE'S BUSINESS OF TRANSPORTATION OF GOODS ON HIRE. THE HIGHER RATE OF DEPRECIATION, HOWEVER, WILL NOT APPLY IF THE MOT OR BUSES, MOTOR LORRIES, ETC., ARE USED IN SOME OTHER NON-HIRING BUSINESS OF THE ASSESSEE. 11.6 IN VIEW OF THE ABOVE CIRCULAR, WE ALLOW THE GR OUNDS OF APPEAL NO.6. 3 MA NO.184/MUM/2011 ARISING OUT OF ITA NO. 1276/MUM/2006 (ASST YEAR 2002-03 ) 3.1 IT IS MANIFEST FROM PARA 11.5 THAT THE ISSUE HA S BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HOWEVER, IN PARA 11.6, THE RESULT OF THE GROUND HAS BEEN MISTAKENLY WRITTEN AS ALLOWED INSTEAD OF D ISMISSED. ACCORDINGLY, THE ERROR CREPT IN PARA 11.6 STANDS CORRECTED AND THE SAME RE ADS AS UNDER: 11.6 IN VIEW OF THE ABOVE CIRCULAR, WE DISMISS THE GROUND OF THE APPEAL OF THE REVENUE 4 IN THE RESULT, THE MISCELLANEOUS APPLICATION FILE D BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 15 TH DAY OF JULY 2011. SD/ SD/- ( J SUDHAKAR REDDY ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 15 TH JULY 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI