TMI Blog2018 (2) TMI 1937X X X X Extracts X X X X X X X X Extracts X X X X ..... ER PER S. S. GODARA, JUDICIAL MEMBER This Revenue s appeal for assessment year 2012-13 arises against the CIT(A)-3, Rajkot s order dated 06.06.2016 in case no. CIT(A)-3/A3/0958/14-15, in proceedings u/s.143(3) of the Income Tax Act, 1961; in short the Act . 2. We notice at the outset that the Revenue s sole substantive ground pleads that the CIT(A) has erred on facts as well as in law in defining assessee s business as transporter thereby concluding that it is entitled for higher rate of depreciation on dumpers as against 15% allowed in assessment proceedings resulting in disallowance of ₹ 77,61,266/- in question. The lower appellate findings discussed at length all the relevant facts, Assessing Officer s reasoning for invoking the impugned disallowance as well as assessee s submissions as under: 5.1.0 I have carefully considered the submission of the appellant and perused facts of the case in A.O's order. Ground No.1, 2 3 are basically arising out of the grievance from the A.O's action of denying higher depreciation on vehicles on the proposition that appellant is not in the business of running vehicles o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -03 2004-05 wherein it has been explicitly held that dumpers used for loading-unloading and transportation of excavated material are road transport vehicles. 5.1.3 The Ld. AR has argued that the appellant had used more than 50 such vehicles to carry out the business of transport and removal of overburdened/ waste rock of third parties. He argued that the contracts allotted to him were partly or fully for this purpose. He submitted copy of the letter of intent of such contracts. A copy of Purchase Order from M/s. Jindal Saw Limited No.4720000245, dt.30/6/2011 was made available which were detailing the 'Terms of Delivery' as under :- (Quote) TRANSPORTATION: Transportation of crushed material from crusher site up to Buyer's site at Nanakapaya, Distt.: Kutchh, Gujarat shall be arranged by the Contractor FREIGHT: Extra @ ₹ 145/- PMT shall be to Buyer's account WORK DESCRIPTION: Contractor (M/s. Bhimji Vekli Sorathia)shall carry out the job work as per the following. (a) shall unload the iron ore from lorries being received at their site for crushing. (b) sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er orders of the third parties. 5.1.7 Similar issue had arisen in the case of M/s. H. D. Enterprises in ITA No.CIT(A)-3/A3/1035/14-15, dt.3/3/2016 wherein the undersigned has followed the decision of the Ld. CIT(A), Jamnagar on identical set of facts in the case of M/s. P.C Patcl Co, for AY 2012-13. It was held by the Ld. CIT(A) as under: The issue involved in this matter needs to be looked at from the following angles; 1. Whether the assets were eligible for higher rate 2. Whether the assets were given on hire 3. Whether the assets were used in transportation of something 4. Whether the assets were used in asses see's own business. As regards the first point regarding the assets being eligible for higher rate of depreciation, I understand that there is no dispute even from the side of the AO. Hence, we have to conclude that assets are eligible for higher rate of depreciation. The next question is that whether the assets were actually, given on hire or were used in the business of hiring. I have attended to this point in detail in the forgoing paragraphs and elabor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's own business, and that own business is something other than the business of transportation, then, higher rate of depreciation is not allowed. The learned AO has referred to the decision of the Hon'ble Supreme Court in the case of Gupta Global Exim P.Ltd. and also referred to the test of user elaborated in the said judgment. However, in my considered opinion, the test of user will come into play only when facts point out that the assets were used in assessee's own business. If the assets are used in assessee's own business, than it will have to be decided as to whether that business of the assessee is that of transportation or not. In the case under consideration, I am of the opinion that it is clearly established that the appellant had given assets on hire in terms of tender. Once it is established that the vehicles were given on hire in response to an open tender, the existence of two parties are confirmed and there is no scope whatsoever to speculate whether the same were used in the business of the appellant. It is absurd to think that one will hire one's assets to a third party in order to carry out one's own business operation. Thus, I am q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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