SARABJEET SINGH CHHATWAL V. COMMISSIONER OF INCOME TAX

TAXC/101/2010

AI Insights

The case revolves around the entitlement of the assessee, Sarabjeet Singh Chhatwal, to claim 40% depreciation on tippers used in his mining and transportation business, as per the Income Tax Rules. The dispute covered two Assessment Years (2004-05 and 2005-06), with differing initial rulings by the Assessing Officer and subsequent appeals to the Income Tax Appellate Tribunal. The primary legal question was whether the tippers qualified for a higher depreciation rate under Rule 5, Appendix-1, Part III(3)(ii) of the Income Tax Rules, 1961, which the assessee argued for, citing their use in transportation of goods on hire.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 751242 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 03-05-2013
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax, Bilaspur Vs Income Tax Appellate Tribunal and Rajesh Kumar Murarka, Commissioner of Income Tax Vs Rakesh Jain, Commissioner of Income Tax Vs SC Thakur and Brothers
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: ANAND DADARIYA; S R RAO; MK SINHA
• Keywords: Depreciation; Tippers; Mining and transportation contractor; South Eastern Coalfields Limited; Hydraulic lift
• Section: 260A

Judgement Text

"^ c @ .f>-^ IN THE HON'BLE HIGH COURT OF JUDICATURE FOR CHHATTISGARH AT BILASPUR TAX CASE No.^ OF 2010 APPELLANT ^(Assessee ) ,.^- ^s '^.--* .^'•':. ^^ ^ ^..^^^ . riE^PONDENT tevenue) :^SARABJEET SINGH CHHATWAL PROP. M/S.S.S.CHHATWAL & Co S.S.PLAZA, P.H. ROAD, KORBA (CG) VE RSUS COMMISSIONER OF INCOME- ^ TAX, BILASPUR w\"/ APPEAL UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 r}^ HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLE SHRI PRITINKER DIWAKER, J. Appellant Respondent Appellant 1 TaxCaseNo.101 of 2010 Sarabjeet Singh Chhatwal, Korba VERSUS Commissjoner of Income Tax, Bilaspur 2 TaxCaseNo.71 of 2010 Deputy Commissioner of Income Tax, Circle Korba, Chhattisgarh VERSUS Sarabjeet Singh Chhatwal, Korba Respondent Appeals under Section 260A of the Income Tax Act 1961a Appearance: Shri Anand Dadariya, counsel forthe Department. Shri SR Rao and Shri MK Sinha, counsel for the Assessee. JUDGEMENT (3rd May, 2013) 1. These two appeals under section 260A of the Income Tax Act, 1961 (the Act) are against the orders of the different Benches of Income Tax Appellate Tribunal (the Tribunal) in respect of the Assessment Years (AY) 2004-05 and 2005-06 in respect of same assessee namely Sarabjeet Singh Chhatwal (the Assessee). The Tax Case- 101 of 2010 is in respect of AY-2004-05 by the Assessee, whereas, Tax Case- 71 of 2010 is in respect of AY 2005-06 by the Income Tax Department (the Department). The main question involved in both the appeals is, 'Whether the Assessee is entitled to 40% or 25% of depreciation on Tippers.' THE FACTS 2. The Assessee is a mining and transportation contractor. He entered into an agreement with the South Eastern Coalfields Limited (the SECL) on 24.04.2004 for removal of over-burden and transporting the soil to the place indicated by the SECL. He filed his return for the relevant years claiming 40% depreciation on Tippers involved in the work claiming ^ ^ benefit of Appendix-1 under rule 5 part lll(3)(ii) of the Income Tax Rules (theRules). 3. The Assessing Officer (the AO) by his orders dated 31.03.2005 (AY 2004-05) and 23.02.2007 (AY 2005-06) held that the Assessee was entitled to 25% of depreciation under rule 5 Appendix-1 part 111(1) rather than 40% under part lll(3)(ii) ofthe same Appendix. 4. Against the aforesaid orders, the Assessee filed appeals. The^ were dismissed by the Commissioner of Income Tax (Appeats) (the CIT-A) on 23.08.2005 and 06.05.2008. l' 5. The Assessee filed his second appeal before Jabalpur bench of the Tribunal in respect of AY 2004-05. It was dismissed on 16.05.2006 upholding the orders of the authorities below. He filed miscellaneous application to review this order. It was also dismissed on 30.07.2009. Hence, Tax Case-101 of 2010. 6. The appeal of the Assessee in respect of AY 2005-06 was allowed by the bench of the Tribunal at Bilaspur on 20.01.2010 on the basis of division bench decision of this Court in Tax Case- 24 of 2006 (Commissioner of Income Tax, Bilaspur Vs Income Tax Appellate Tribunal and Rajesh Kumar Murarka) (the Murarka case) decidedv on 20.10.2009. Hence the Tax Case- 71 of 2010 by the department. POINT INVOLVED 7. We have heard counsel for the parties. 8. Tax Case- 101 of 2010 was admitted on the following substantial question of law: 'Whether in the facts and circumstances of the case, the Appellant was entitled to depreciation of 40% or 25%.' 9. Tax Case- 71 of 2010 was admitted on the following two substantial questions of law: n