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TMI Blog2019 (7) TMI 1655X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, 1961 ?" 3. The appellant-assessee had filed its return of income on 29th September 2011, declaring the total income of Rs. 80,64,260=00. The return was processed under Section 143(1) of the Act. The case was selected for scrutiny. Accordingly, a notice under Section 143(2) of the Act came to be issued on 28th September 2012 and further notice under Section 143(2) read with Section 129 of the Act was issued on 15th November 2013. 4. It appears from the materials on record that the appellant is engaged in the business of hiring, operation and maintenance of construction equipments. 5. The appellant claims depreciation at the rate of 30% on various types of cranes, viz. Telescopic Cranes, Rail for Tower Cranes, Tower Cranes, Mobile Tower Cranes, Crawler Cranes, Tower Crane Masts and Hydra Cranes. 6. The appellant was served with a show-cause notice, calling upon him to show-cause as to why depreciation at the rate of 30% should be allowed, having regard to the fact that the cranes referred to above do not fall in the category of Motor Bus, Motor Lorries and Motor Taxis used in the business of running them on hire. 7. The Assessing Officer took the view that hiring ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of Hydra Crane. But the assessee has failed to furnish any relevant material and supporting evi8dences to justify its claim of depreciation at higher rate in respect of telescoping crane, rail for tower crane, tower crane, mobile tower crane, crawler crane and tower crane masts. The assessee has placed reliance on the decision of ITAT in the case of Bothra Shipping Services however we observe that facts of the case of the assessee are clearly distinguishable from the facts of the above cited case of Kolkata ITAT. In the case of Bothra Shipping Services the issue in the appeal was pertaining to crane mounted vehicle, JCB and 400 wheel loaders which were registered as heavy or medium motor vehicle by RTO and were used in the business of hiring them out to other within ambit of expression motor lorries. However, in the case of the assessee it has used different kinds of cranes which are not mounted on the vehicle. We have noticed that Hon'ble Jurisdictional High Court of Gujarat in the case of Gujco Carrier Vs. DCIT (2002)122 taxman 2006 (Guj) held that motor vehicle like fire truck, fork lift truck and crane truck which are designed for special services fall within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was granted by the Assessing Officer while framing the assessment under Section 143(3) of the Act vide order dated 24th December 2009. Mr.Hemani would submit that once the claim of depreciation at higher rate (being 30%) came to be accepted by the AO in the past while framing the assessment under Section 143(3) of the Act, then keeping in mind the principle of consistency, it was not open to the department to once again raise the very same issue and deny depreciation at the rate of 30% on the cranes during the year under consideration. 15. Mr.Hemani, in support of his submissions, has placed strong reliance on a decision of the Supreme Court in the case of CIT v. Excel Industries Limited, (358) ITR 295 (SC). Mr.Hemani submitted that even otherwise all the Revenue authorities committed a serious error in taking the view that the appellant is entitled to claim depreciation only at the rate of 15% and not at the rate of 30%. It is submitted that the assessee is in the business of hiring as is evident from its finance. Mr.Hemani pointed out documentary evidence in support of his submissions to show that the major revenue is generated from letting out cranes and equipments used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RTO, and in such circumstances, the reasonings assigned by the Assessing Officer would not hold good for the purposes of claiming depreciation on such cranes. SUBMISSIONS ON BEHALF OF THE REVENUE : 21. Ms.Mauna Bhatt, the learned senior standing counsel appearing for the department, has vehemently opposed this Appeal. According to Ms.Bhatt, no error, not to speak of any error of law, could be said to have been committed by the Revenue authorities in passing the impugned orders. According to Ms.Bhatt, a finding of fact has been recorded by all the three Revenue authorities that the assessee is not into the business of hiring. The assessee is using the cranes for the purpose of his own business of construction. In such circumstances, according to Ms.Bhatt, there is no question of granting depreciation at the rate of 30%. 22. In support of her submission, reliance has been placed on a decision of this Court in the case of Deputy Commissioner of Income-tax v. Pradip N.Desai (HUF), reported in (2012)21 taxmann.com 151 (Gujarat). 23. Ms.Bhatt submitted that it is true that the very same issue was considered in the Assessment Year 2007-08 for the very same cranes and depreciation was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Full Bench was the case of Hoystead & Ors. v. Commissioner of Taxation, 1926 AC 155. Speaking for the Judicial Committee Lord Shaw stated: "Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be proper apprehension by the Court of the legal result either of the construction of the document or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principal of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle - namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken." These observation were made in a case where taxation was in issue. 15. This Court in Parashuram Pottery Works Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence. In this case, the assessee had been granted exemption under Section 11 for a long period of years and without there being any change in the objects or activities of the assessee, the income-tax authorities sought to deny the exemption in a later year. In the case of Neo Polypack (supra), it was held that although the doctrine of res judicata is not applicable to the income-tax proceedings since each assessment year is independent of the other, yet where an issue has been considered and decided consistently in a number of earlier years in a particular manner the same view should continue to prevail in the subsequent years unless there is some material change in the facts. In the case of Allied Finance (P) Ltd. (supra), the Tribunal had decided an issue in favour of the assessee by two orders and those two orders were followed by the Tribunal in the subsequent appeals. The department had accepted the correctness of the basic two orders and did not file any appeal against them. It, however, challenged the subsequent orders of the Tribunal, and while refusing to entertain the appeal, the Delhi High Court held that there was no reason to discard the principle of consistency whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent view unless there are very convincing reasons, none of which have been pointed out by the learned counsel for the Revenue. 29. In Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) this court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same "fundamental aspect" permeates in different assessment years. In arriving at this conclusion, this court referred to an interesting passage from Hoystead v. Commissioner of Taxation [1926] AC 155 (PC) wherein it was said (page 328 of 193 ITR) : "Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be proper apprehension by the Court of the legal result either of the construction of the document or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principal of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle - namely, that of setting to rest rights of litigants, applies to the case where a point, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue is entirely academic or at best may have a minor tax effect. There was, therefore, no need for the Revenue to continue with this litigation when it was quite clear that not only was it fruitless (on merits) but also that it may not have added anything much to the public coffers." 33. Thus, in view of the above, in our opinion, the 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. 34. 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al also rejected the assessee's contention that benefit of depreciation at 30% should be given to it since it was given to 'fork-lift trucks' under Instructions No. 617 issued on 13-9-1973 by the C.B.D.T. classifying 'fork-lift trucks' under item III (ii-D 9) of Appendix 1. Under the heading 'Machinery and plant' of item III of Appendix 1, Part I of the Table of Rates at which depreciation is admissible, read with Rule 5 of the Income Tax Rules, various items of machinery and plant are specified with the rates at which depreciation is to be allowed as are mentioned against them. The assessee claimed depreciation at 40% on its crane under Item III E(1A) of Appendix 1, which reads as follows : "E. (1A) Motor buses, motor lorries and motor taxis used in a business running them on hire." In the alternative, the assessee claimed depreciation before the Tribunal on the basis of the C.B.D.T. Instruction No. 617 dated 13-9-1973, which has been reproduced in the order of the Tribunal, as under: "132. Fork lift trucks - Rate of depreciation prescribed in Part 1 of Appendix 1 to Income Tax rules. Fork lift trucks would be classified under item III (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting. 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, rotating it or moving it horizontally. Most industrial trucks permit mechanized pickup and deposit of the loads, eliminating manual work in lifting as well as transporting. The crane truck is a portable boom crane mounted on an industrial truck. It may be used with hooks, grabs, and slings for bundled or coiled material. Industrial trucks which would also come within the expression 'motor lorries' are described as follows in the Encyclopedia Britannica : "Industrial truck carrier designed to transport materials within a factory area with maximum flexibility in making moves. Most industrial trucks permit mechanized pickup and deposit of the loads, eliminating manual work in lifting as well as transporting. Depending on their means of locomotion, industrial trucks may be classified as hand trucks or power trucks. Hand trucks with two wheels permit most of the load to be carried on the wheels, but some of the load must be assumed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oad. 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 Encyclopedia Britannica under the heading `crane'). Thus, a 'fork-lift truck' is also a type of crane. The expression 'truck crane' is well known in the truck industry. "The truck crane is a unit consisting of a crane house and boom mounted on a truck chassis, ....... Originally assembled by contractors from crawler cranes and truck parts, the truck crane for years been manufactured and sold as a unit. Although the truck crane is difficult to move on soft or slippery ground, it is highly mobile on a firm footing and is easily moved over roads and highways. (See "Crane Hoist" - McGraw Hill - 'Encyclopedia of Science and Technology'). A crane is usually typed according to its undercarriage. Some of the cranes which undercarriage is not a truck are, 'crawler cranes' mounted on continuous tracks, the 'rail or locomotive crane' on special chasis with flanged wheels for use on railway tracks and 'floating crane' on a barge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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% when used for hire and at 30% when not so used has been provided as against 10% of machinery in general, and therefore, they should be treated as falling in the general category of machinery, is an over-simplification of the matter. The approach of the Tribunal that the plea taken by the assessee that crane was an integral part of the motor vehicle on which it is mounted required ascertainment of facts and fresh investigation, amounts to imposing a burden on a person to prove something of which Court or Tribunal can take judicial notice. For example, if a witness deposes that he had seen a horse, the Court need not insist upon him for a proof of the anatomy of a horse and can take a judicial notice of horse as an animal. The Courts and Tribunals are not required to act dumb or ignorant of the facts of which judicial notice can be taken. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the expiry of the lease period. The assessee demolished the theatre and constructed a new one during the period January-July 1962. In respect of the assessment years 1964-65 to 1969-70, the assessee claimed depreciation in respect of the theatre building, furniture and fixtures, plant, etc. The claim was rejected by the Income-tax Officer on the ground that the lessor had not divested himself of the ownership of the land and the building. The Appellate Assistant Commissioner and the Tribunal decided in favour of the assessee and held that the assessee was entitled to depreciation. On a reference, this Court (at page 1058) held: "What is relevant for the purposes of the present case is that during the period of the lease, the assessee was held to be the owner of the building. The Tribunal, in our view, was justified in holding that the assessee was the owner of the building, fixtures and fittings of Alpana Talkies within the meaning of section 32 of the Income-tax Act. Consequently, the assessee would be entitled to depreciation under section 32 of the Incometax Act, 1961, on the above items." 5. The expression "owned by the assessee" also came up for interpretation before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [1971] 82 ITR 570, the High Court observed that though the machinery in respect of which the depreciation was claimed stood in the name of the Government of India, to all real intents and purposes and also for purposes of section 32 of the Income-tax Act, 1961, it was intended that the property and the goods should pass to the assessee at the relevant time. Read in this context, it was held that the assessee owned the machinery in question and was entitled to depreciation. 8. Reference may also be made to another decision of the Calcutta High Court in CIT v. Salkia Transport Associates [1983] 143 ITR 39. The dispute in this case was somewhat similar to the dispute in the case before us. Here also depreciation was claimed by the assessee in respect of motor vehicles claimed to be owned by it though not registered under the Motor Vehicles Act in its name. The Calcutta High Court held that the provisions of the Motor Vehicles Act, 1939, do not prevent a person from becoming the owner of the motor vehicles without registration. Registration is not an essential prerequisite for the acquisition of ownership of the motor vehicle but is an obligation cast upon an owner of the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; (ii)within forty-five days of the transfer forward to the registering authority referred to in sub-clause (i)-- (A)a no objection certificate obtained under section 29A; or (B)in a case where no such certificate has been obtained, - (I)a receipt obtained under sub-section (2) of section 29A; or (II)a postal acknowledgement received by the transferor if he has sent an application in this behalf by registered post acknowledgement due to the registering authority referred to in section 29A, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted; (b) the transferee shall, within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he resides, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicle shall cause or permit the vehicle to be driven in any public place or in any other place for the purpose of carrying passengers or goods unless the vehicle is registered in accordance with this chapter and the certificate of registration of the vehicles has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner." 15. The provision of this section does not prevent a person from becoming an owner of a motor vehicle without registration. On the contrary, the section makes it obligatory for an owner of a motor vehicle to get the vehicle registered and to display the certificate of registration before the vehicle is driven in any public place. Registration is not an essential pre-requisite for acquisition of owner ship of a motor vehicle but is an obligation cast upon the owner of a vehicle for the purpose of running of the vehicle in any public place. Therefore, in our opinion, whether the buses were registered in the assessee's name or not is not very material for the purpose of this case. This may be a factor that has to be taken into consideration. But when under the agreement the new buses that were acquired by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee must be a registered owner of the vehicles in order to claim depreciation allow ance in respect of them. We are of the view that on the facts of this case the new buses were owned by the assessee within the meaning of section 32 and the assessee was entitled to claim depreciation allowance on these vehicles." 40. At this stage, we may also look into the decision of this Court in the case of Deputy Commissioner of Income-Tax v. Pradip N.Desai (HUF), reported in (2012) 341 ITR 277 (Gujarat), 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. 41. In the ov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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