TMI Blog2010 (1) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... lying on decision for assessment year 2003-04 treated the pay-loaders, trippers and trucks in the nature of machinery and not as vehicles. Accordingly, depreciation was allowed at the rate of 25 per cent as against claimed by the assessee at the rate of 40 per cent. 3. Before the ld. CIT (Appeals) it was submitted that the assessee was engaged in the business of loading and transportation of coal in mines owned by various coal subsidiaries of Coal India Ltd. The transportation work was done with the help of tippers [trucks fitted with hydraulic system] and loading work was done with the help of pay loaders. The assessee company was raising bills on various coal subsidiaries of Coal India Ltd. for transportation and loading of coal on per tonne per kilometre basis. As the assessee company was using its vehicles for running them on hire for transportation of coal, the assessee had claimed higher rate of depreciation. It was further submitted that the assessee had received three types of receipts i.e. transportation receipts, loading receipts and surface mining receipts. It was pointed out that the assessee had outsourced entirely its surface mining activities through other contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtation activity performed by real dumpers/trucks. In order to arrive at a justifiable conclusion it was necessary to look at the process as a whole and nature of work performed by set of vehicles rather than to go by the name of each vehicle or the spare parts through which it is made or equipments generally manufactured by the company from where these vehicles have been purchased. It was further submitted that in order to determine which asset belongs to same class we have to look into the purpose for which a particular asset was purchased and not the purpose, which was generally served by the asset. The assessee placed reliance on several decisions in support of its contention that the dumpers trucks, tippers excavators bulldozers, graders, pay-loaders etc. were vehicles and since these vehicles were used for transportation for hire, the assessee was entitled for depreciation at the rate of 40 per cent. 5. The ld. CIT (Appeals) relying on the decision of his predecessor held that vehicles used by the assessee in the business of transportation were eligible for depreciation at the rate of 40 per cent. He was of the opinion that the assets were primarily vehicles fitted with hy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In rejoinder, the ld. AR of the assessee relying on the decision in the case of ABC India Ltd. Vs. CIT (supra) submitted that Hon'ble Gauhati High Court has held that where the assessee was engaged in the transportation of goods by road from one place to another using its own trucks for such transportation it has been held that the assessee used the lorries for running them on hire and hence was entitled for depreciation at the rate of 40 per cent. 7. We have heard both the parties and gone through the material available on record. There is no dispute that ld CIT(A) has allowed depreciation @ 40% on assets used by assessee for transporting coal from one place to another place. There is no dispute that the assessee is charging money on per tonne per kilometre basis for transportation purposes. Thus the assets have been used in by the assessee in own business of hiring. Hon ble Gujarat High Court in the case of Gujco Carriers v. CIT [2002] 122 Taxman 206/256 ITR 50 (Guj.) has held that a mobile crane mounted on a truck constitutes a single unit known as a truck crane which is adapted for use upon roads for special services. It will fall under the category of motor truck (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer observed that since the condition laid down under section 36(2) was not satisfied, the claim made by the assessee could not be accepted. Accordingly the addition of ₹ 3,08,890/- was made. 9. On appeal it was submitted by the ld. AR of the assessee that the AO was confused with the facts of the case since she had mainly relied upon the earlier years' orders. He had pointed out that even in earlier years the ld. CIT (A) had deleted the addition made by the AO in respect of bad debts. As regards the amount of ₹ 35,568/- due from Shri Satish Kumar Sharma, it was submitted that the amount was the outstanding in the case of M/s. Garuda Finance, a non-banking finance company relating to AY 2002-03, which merged with Sainik Automobiles Ltd. along with other seven companies vide High Court order dated 11/09/2002 resulting into M/s. Sainik Mining and Allied Services. M/s. Garud Finance Ltd. had lent ₹ 35, 578/- to Mr. Sharma during 2002-03 before merger in the ordinary course of money lending business and, therefore, second condition of section 36(2) was satisfied. As regards ₹ 1,91,600/- it was submitted that the amount represented the de-escalation in ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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