USHA JOHNSON V. THE COMMISSIONER OF INCOME TAX

ITA/14/2021

AI Insights

The case revolves around an appeal by Usha Johnson, the proprietor of Maruthayath Transports, against the order of the Income Tax Appellate Tribunal, Cochin Bench, which denied her claim for higher depreciation on motor vehicles used in her business for the Assessment Year 2009-10. The Tribunal had treated the vehicles as eligible for only 15% depreciation, contrary to the 30% claimed by the appellant. The primary legal contention was whether the appellant's use of the vehicles qualified for the higher depreciation rate under the specific clause of the Income Tax Rules, 1962. The High Court, referencing a similar case (ITA No.96/2015), ruled in favor of the appellant, allowing the higher depreciation rate.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 752471 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 03-09-2021
• Assessment Year: misc
• Other Referred Cases: ITA No.96/2015
• Laws Referred To: Income Tax Rules, 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: M NAMBIAR; K MATHAI; JOSON MANAVALAN; KURYAN THOMAS; PAULOSE ABRAHAM; RAJAKANNAN; S PARVATHI
• Keywords: Assessment Year 2009-10; Depreciation; Income Tax; Motor vehicles
• Section: III(3)(ii)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE VIJU ABRAHAM FRIDAY, THE 3RD DAY OF SEPTEMBER 2021 / 12TH BHADRA, 1943 ITA NO. 14 OF 2021 AGAINST THE ORDER IN ITA 751/2019 OF I.T.A.TRIBUNAL,COCHIN BENCH, ERNAKULAM APPELLANT/S: USHA JOHNSON AGED 53 YEARS PROPRIETOR, MARUTHAYATH TRANSPORTS, MARUTHAYATH BUILDINGS, PALLIMUKKU, KUNDARA, KOLLAM. BY ADVS. M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN SMT.S.PARVATHI RESPONDENT/S: THE COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695003. OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 03.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A. No. 14/2021 -2- J U D G M E N T S.V. Bhatti, J. Heard learned Counsel Mr Kuryan Thomas and learned Standing Counsel Mr Christopher Abraham for parties. 2. Usha Johnson/Assessee is the appellant. The Commissioner of Income Tax, Thiruvananthapuram/Revenue is the respondent. 2.1 The assessee aggrieved by the order dated 28.02.2020 of the Income Tax Appellate Tribunal (for short ‘Tribunal) Cochin Bench in ITA No.751/Coch/2019 has filed the subject appeal. The appeal deals with the issues arising from the return filed by the assessee for the Assessment Year 2009-10. The assessee raises the following substantial questions of law: I.T.A. No. 14/2021 -3- i. Whether in the facts and in the circumstances of this case the Appellate Tribunal was justified in dismissing the appeal filed by the Appellant holding that the appellant is not eligible for claiming higher depreciation provided under Clause III (3) (ii) of the Appendix I to the Income Tax Rules, 1962? ii. Whether on the facts and the circumstances of the case the Appellate Tribunal is right in holding that the work undertaken by the appellant not hiring of motor vehicles, when it is not disputed that the appellant is not using the trucks owned by it for some other non-hiring business run by it ? iii. Is not the finding of fact by the Appellate Tribunal perverse and contrary to documents on record of the files of the Appellate Tribunal? 2.2 The assessee claims depreciation on motor lorries used by the assessee in running the business, under Appendix-I, at 30%. The Department treated the case of assessee as entitled to depreciation at 15% on the vehicles used by the assessee. The vehicles for which depreciation is claimed are stated as oil tankers transporting fuel from Indian Oil Corporation Ltd I.T.A. No. 14/2021 -4- (IOCL) and Bharat Peroleum Corporation Ltd. (BPCL) to the retail outlets. The Schedule in the Act reads thus: “III. Machinery and Plant (1) Machinery and plant other than those covered by sub-items (2), (3) and (8) below: (2) Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1st day of April, 1990. (3) (i) Aeroplanes – Aeroengines (ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire” 3. The counsel submit that the entitlement of depreciation at 30% of the motor vehicles/tankers used by the assessee for running the business is no more res integra and considered in favour of the assessee in the appeal filed by the assessee in ITA No.96/2015. I.T.A. No. 14/2021 -5- We have perused the judgment in ITA No.96/2015. By following and for the reasons stated in the judgment in ITA No.96/2015, the questions are answered in favour of the assessee and against the Revenue. ITA No.14/2021 is accordingly allowed. Sd/- S.V.BHATTI JUDGE Sd/- VIJU ABRAHAM JUDGE jjj ITA No.14 of 2021 “Oil tankers transporting fuel from Indian Oil Corporation Ltd (IOCL) and Bharat Petroleum Corporation Ltd (BPCL) to the retail outlets” in paragraph 2.2 in page no.3 of the judgment dt.03.09.2021 is corrected as “lorries/trucks for transportation of LPG cylinders of Indian Oil Corporation Ltd (IOCL) and Bharat Petroleum Corporation Ltd (BPCL)” and the word “tankers” in the second line of paragraph 3 in page no.4 of the judgment is replaced with the word “trucks” vide order dated 1st day of October 2021 in I.A. No.2 of 2021 in ITA No.14 of 2021. Sd/- Deputy Registrar I.T.A. No. 14/2021 -6- APPENDIX OF ITA 14/2021 PETITIONER ANNEXURE ANNEXURE A A TRUE COPY OF THE RELEVANT ENTRY IN APPENDIX I TO THE INCOME TAX RULES, 1962. ANNEXURE B A TRUE COPY OF THE ASSESSMENT ORDER DATED 26.9.2014 PASSED BY THE INCOME TAX OFFICER, WARD-4, KOLLAM. ANNEXURE C A TRUE COPY OF THE ORDER DATED 10.10.2019 PASSED BY THE COMMISSIONER (APPEALS), THIRUVANANTHAPURAM. ANNEXURE D A TRUE COPY OF THE COMMON ORDER DATED 28.2.2020 ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. ANNEXURE E A TRUE COPY OF THE JUDGMENT DATED 25.11.2020 PASSED IN ITA NOS. 96 & 100/2015 BY THIS HON'BLE COURT. ANNEXURE F A TRUE COPY OF THE SAMPLE WORK ORDER DATED 14.10.2004 RELATING TO THE EARLIER ASSESSMENT YEARS (AY 2006-07 AND 2007-08). ANNEXURE G A TRUE COPY OF THE WORK ORDER DATED 8.4.2006 RELATING TO THE ASSESSMENT YEAR 2009-10. ANNEXURE G1 A TRUE COPY OF THE WORK ORDER DATED 8.5.2006 RELATING TO THE ASSESSMENT YEAR 2009-10. ANNEXURE G2 A TRUE COPY OF THE WORK ORDER DATED 19.7.2006 RELATING TO THE ASSESSMENT YEAR 2009-10. ANNEXURE G3 A TRUE COPY OF THE WORK ORDER DATED 25.10.2006 RELATING TO THE ASSESSMENT YEAR 2009-10. I.T.A. No. 14/2021 -7- ANNEXURE G4 TRUE COPY OF THE WORK ORDER DATED 30.10.2007 RELATING TO THE ASSESSMENT YEAR 2009-10. ANNEXURE H A TRUE COPY OF THE CIRCULAR NO.652/1993 DATED 14.6.1993 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES. "