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2019 (7) TMI 1655 - HC - Income TaxHigher rate of depreciation on cranes - @ 15% or 30% - CIT(A) took the view that only the Hydra Cranes can be termed as “Motor Cranes” and accordingly allowed depreciation at the rate of 30% - why depreciation on cranes used in the business of running the same on hire should not be restricted to 15% instead of 30%? - Tribunal confirming the order of the Respondent in limiting allowance of depreciation to 15% as against the claim at the rate of 30% on various types of cranes used in hiring business under Section 32? - HELD THAT:- Disallowance is not sustainable. The Revenue has tried to dismiss the entire issue in the name of a mistake but it does not appear to be a mistake. We are saying so, because even independent of the principle of consistency, the assessee has a good case on merits. We fail to understand as to on what basis the Revenue authorities have come to the conclusion that the assessee is not in the business of hiring and that the main business of the assessee is construction. According to the Revenue authorities, the cranes are used by the assessee for his own business of construction. There is thumping documentary evidence on record to indicate that the assessee is very much in the business of hiring. The depreciation at the higher rate could not have been declined merely on the assumption that the cranes might have been used by the assessee for his own business of construction. In fact, it would be an error to take the view that for the purpose of claiming depreciation at the rate of 30% the assessee is obliged to establish that the cranes are used exclusively for the hiring business and that they are not used for any other purpose. Decision of this Court in the case of Deputy Commissioner of Income-Tax v. Pradip N.Desai (HUF), [2011 (7) TMI 304 - GUJARAT HIGH COURT] wherein this Court took the view that if the assessee is not involved in the business of hiring the vehicle on rent, then he is not entitled to claim higher depreciation under clause (2)(ii) of Entry-III of Appendix-I. There need not be any debate on the proposition of law as explained by this Court in the said judgment. However, as discussed above, there is thumping evidence on record to indicate that the assessee is involved in the business of hiring the cranes. He might be using the cranes for his personal construction business too, but that does not disentitle him to claim higher depreciation once it is shown that the assessee is in the business of hiring the cranes. - Decided in favour of assessee.
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