2019 (7) TMI 1835 - AT - Income Tax

Depreciation on crawler cranes/trailers - Whether the crawler cranes/trailers are in the nature of Plant Machinery and thus eligible for depreciation @15% and not eligible for higher depreciation of 30%? - HELD THAT - As relying on own case 2017 (12) TMI 644 - ITAT MUMBAI we do not find any merit in action of lower authorities for declining higher claim of depreciation at 30% on Crawler Cranes and Dozers - Decided against revenue.

Summary

Issues:
- Whether crawler cranes/trailers are in the nature of plant & machinery eligible for 15% depreciation or motor vehicles entitled for 30% depreciation.

Analysis:
The judgment pertains to an appeal filed by the Revenue against the order of the Commissioner of Income Tax-2, Thane. The main issue in the appeal was whether crawler cranes/trailers should be considered as plant & machinery or motor vehicles for the purpose of claiming depreciation. The Assessing Officer disallowed the claim of depreciation by the assessee at 30% as motor lorries and granted depreciation at 15% by considering them as assets in the nature of plant & machinery. However, the Ld. CIT(A) allowed the higher depreciation of 30% based on a previous order of the ITAT 'E' Bench, Mumbai.

During the proceedings, the Ld. DR relied on the AO's order, while the Ld. counsel for the assessee referred to the ITAT's decision in the assessee's own case for previous assessment years. The ITAT considered the issue in detail, referencing a previous order related to crawler cranes/dozers not being permanently registered under the Motor Vehicles Act, 1988, as they were used within port/factory premises and did not require permanent registration. The ITAT also highlighted the functional similarity with the nature of activity performed by the listed machines to determine their category for depreciation.

Furthermore, the ITAT referred to CBDT instructions and judicial precedents to support the claim for higher depreciation at 30% for crawler cranes. The ITAT's decision was based on a comprehensive analysis of various judicial proceedings, including the appellant's own case for different assessment years, where the issue of crawler cranes being entitled to depreciation as motor lorries was examined. Ultimately, the ITAT upheld the Ld. CIT(A)'s order allowing the higher depreciation rate of 30% for crawler cranes and dozers, dismissing the Revenue's appeal.

In conclusion, the ITAT confirmed the higher depreciation claim of 30% for crawler cranes and dozers, following the precedent set by a Co-ordinate Bench in a similar case. The appeal by the Revenue was dismissed, and the decision was pronounced in open court on 31/07/2019.