TMI Blog2002 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was asked to state reasons why depreciation at the general rate of 10 per cent. applicable to machinery and plant, under the said Appendix should not be applied as "crane" was not included in the items of machinery to which higher depreciation at 40 per cent. was admissible. The assessee replied that the crane was required to be registered with the R.T.O. and it was a heavy motor vehicle and therefore, depreciation at 40 per cent. was admissible under entry No. IIIE(1A) of Part I of Appendix I to the Income-tax Rules. The Income-tax Officer, by simply stating, "crane is not included therein. I therefore grant depreciation only at 10 per cent. on crane", disallowed the claim at the rate of 40 per cent. made by the assessee under entry No. IIIE(1A) of Part I of Appendix I. The Commissioner of Income-tax (Appeals)-I Ahmedabad, before whom the assessee appealed, also negatived its claim by observing: "However, in the absence of any specific mention of 'cranes', in the relevant Income-tax Rules, allowing depreciation at the higher rate of 40 per cent., I am unable to accede to the claim of the appellant and uphold the action of the Income-tax Officer in allowing the depr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anes Tyre and Rubber Products Ltd. [2000] 242 ITR 619, a decision of the Madras High Court, was relied upon for the proposition that, while the entry at item No. III-C(7) in Appendix I refers to vehicles for personal or family use, the entry at item No. III-D(9) refers to vehicles which are used mainly for hire or reward or for carrying of goods, or for operations connected with agriculture, and that the fact that vans and three wheelers were not specifically mentioned in the schedule did not disentitle the assessee from claiming depreciation if those vans and three wheelers are capable of being brought under any of the heads mentioned in the Schedule. (b) V.D. Swami and Co. Ltd. v. CIT [1997] 225 ITR 439, also a decision of the Madras High Court, was cited to point out that, it was held therein that a lift which moved up and down with the help of twisted steel rope within a structure, was a machinery. (c) A decision of the Bombay High Court in Ishardas and Co. v. State of Maharashtra, AIR 1986 Bom 348 was cited to show that the Bombay High Court held therein that a mobile crane was a motor vehicle within the meaning of section 2(18) of the Motor Vehicles Act, 1939, as amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f machinery and plant in Appendix I. In support of his contentions, learned counsel for the Revenue relied upon the following decisions: (a) The decision of the Supreme Court in Liberty Oil Mills (P.) Ltd. v. Collector of Central Excise [1995] 1 SCC 451, was cited for the proposition that, in the case of an ambiguity or doubt regarding an exemption provision in a fiscal statute, the ambiguity or doubt will be resolved in favour of the Revenue and not in favour of the assessee. (b) The decision of the Supreme Court in Sita Devi v. State of Bihar [1995] Suppl. 1 SCC 670, was cited for the proposition that it was a basic rule of interpretation that dear and unambiguous language of a provision has to be given effect to despite suggested absurdity or irrationality. The Supreme Court held that absurdity or irrationality of bringing the enumerated items of agricultural produce within the sweep of the legislation is not a principle of interpretation of the statute and the court cannot strike down the Act on its basis. It was held that, though in the common parlance of animal husbandry, cattle may not be considered to be an agricultural produce, but, when the definition of "agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962. The controversy centres around the question whether mobile crane registered as a heavy motor vehicle under the Motor Vehicles Act and the rules made thereunder with the R.T.O. would fall within the expression "motor lorries" contained in item No. IIIE(1A) of Appendix I of the said Rules. The Tribunal has confirmed the orders of the income-tax authorities holding that since "cranes" are not mentioned as an independent item in Appendix I, depreciation at the rate of 40 per cent. was not admissible to cranes, and that only the rate of 10 per cent. was admissible being the general rate applicable to machinery. The Tribunal rejected the plea of the assessee that the crane was an integral part of the motor lorry on which it was mounted and was worked by the same machine which provided traction to the lorry, on the ground that this required ascertainment of facts and fresh investigation. The Tribunal also rejected the assessee's contention that benefit of depreciation at 30 per cent. should be given to it since it was given to "fork lift trucks" under Instructions No. 617, issued on September 13, 1973, by the Central Board of Direct Taxes, classifying "fork lift trucks" under it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry a quarter of the intercity freight in the United States, and they enjoy an almost total monopoly in intracity freight delivery. In 1896 Gottlieb Daimler of Germany built the first motor truck. It was equipped with a four-horse power engine and a belt drive with two speeds forward and one in reverse. In 1898 the Winton Company of the United States produced a gasoline-powered delivery wagon with a single-cylinder six-horsepower engine. In World War I motor trucks were widely used, and in World War II they largely replaced horse-drawn equipment. A notable vehicle was the four-wheel drive, quarter-ton-capacity, short-wheelbase jeep, capable of performing a variety of military tasks." Lorry or truck would, therefore, mean not only any motor vehicle designed to carry freight or goods but also to perform special services like fire fighting. Fire engine also called fire truck is a self-propelled mobile piece of equipment used in fire fighting. There can be other special services to be performed by motor vehicles designed for such services. Thus, a lorry, i.e., truck adapted or designed to carry a crane is meant for special services of lifting load, moving it side by side, rota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pipe is carried on elevating bolsters. Other common types include high and low lift platform trucks, motorised pedestrian led, side-clamp, tractor, and side-loading trucks." It will, thus, be clear that motor vehicles like fire trucks, fork lift trucks and crane trucks which are designed for special services fall within the category of "motor trucks" (also called "motor lorries"). The word "crane" when used for an inanimate object means a machine for moving heavy objects usually by suspending them from a projecting arm or beam. Crane is any of a diverse group of machines that not only lift heavy objects but also shift them horizontally. Movable cranes are mounted on railway cars, motor trucks or chassis equipped with caterpillar treads and the hoisting machinery is mounted so as to counterpoise part of the load on the boom and thereby, preventing the entire crane from overturning while carrying the load. The fork lift truck, widely used for moving goods between warehouse storages and shipping vehicles, "is a highly manoeuvrable crane adaptable to handling drums, crates, or loaded skids or pallets." (see Encyclopaedia Britannica under the heading "Crane"). Thus, a "fork lif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted for use solely for carriage of the crane mounted on it. The mounted crane is attached to the truck which carries it. The test of carrying goods such as potatoes and tomatoes that require loading and unloading in the context of carriage of freight when transported, as was suggested on behalf of the Revenue, will not be decisive. Unloading, in the context of truck crane where the crane remains mounted and attached to the truck when carried and even at the destination where it is put to use is not a relevant factor at all. Though not required to be loaded or unloaded like other goods transported in carriage of freight, the crane remains fixed, mounted on the truck which has been adapted for use solely for its carriage and such truck crane is used for special service of lifting and moving heavy objects. This is why such a mobile crane is registered as a heavy motor vehicle which is a heavy goods vehicle as defined in section 2(16) of the Motor Vehicles Act. The approach of the Tribunal and the authorities below it that cranes are not mentioned specifically as an independent item falling in the categories for which higher depreciation allowance at the rate of 40 per cent. when u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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