2019 (12) TMI 1508 - 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 Involved:
Interpretation of depreciation for crawler cranes/trailers - 15% or 30%.

Analysis:
The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-2, Thane, dated 30/08/2018, focusing on the issue of whether crawler cranes/trailers should be eligible for depreciation at 15% or 30%. The Assessee argued that previous decisions by the Coordinate Bench favored their stance, citing cases from A.Y. 2011-12 and 2014-15. The Revenue, however, relied on the AO's order and grounds of appeal. The Tribunal noted that a similar issue was decided in favor of the Assessee in A.Y. 2011-12 by the Coordinate Bench. The Tribunal reviewed the nature of crawler cranes and dozers, emphasizing their mechanical propulsion and capability to run on roads, which qualifies them as motor vehicles. The absence of a specific definition of "motor vehicle" in the Income Tax Act led to reliance on the definition in the Motor Vehicles Act. The Tribunal referenced legal precedents, including Supreme Court and High Court judgments, supporting the eligibility of vehicles for depreciation regardless of registration status under the Motor Vehicles Act.

The Tribunal further discussed the misconception by the AO regarding the registration requirements under the Motor Vehicles Act, emphasizing that registration is not a prerequisite for claiming higher depreciation. The Tribunal highlighted the operational context of the vehicles, explaining their deployment in port/factory premises, which exempts them from permanent registration. The AO's assumption regarding entry tax payments was deemed incorrect, with supporting evidence provided regarding temporary permits and tax payments in Gujarat. The Tribunal emphasized the functional similarity of vehicles to those included in the depreciation schedule and referenced CBDT instructions and legal cases supporting the eligibility of similar vehicles for higher depreciation.

Moreover, the Tribunal addressed the argument that cranes should be categorized as "Motor Lorry" for depreciation purposes, citing various judicial precedents, including cases involving crawler cranes in different contexts. The Tribunal concluded that there was no merit in the lower authorities' decision to deny higher depreciation on crawler cranes and dozers. Ultimately, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals) by dismissing the appeal of the Revenue, in line with previous decisions by the Coordinate Bench. The appeal of the Revenue was consequently dismissed, affirming the eligibility of crawler cranes/trailers for depreciation at 30%.