TMI Blog2023 (10) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... ed screen plant etc. The hiring of vehicles in terms of Section 32 could not be specified and therefore, the Learned PCIT has rightly observed to disallow such additional depreciation when the vehicles are used in the own business of the assessee and not on hire. No merit in the contention of the assessee and infirmity in the order of PCIT, therefore PCIT was correct in invoking the provision of Section 263, since the order of Learned AO was satisfactorily held to be erroneous so far as prejudicial to the interest of Revenue. - Shri Ravish Sood, Judicial Member And Shri Arun Khodpia, Accountant Member For the Appellant : Shri Sakshi Gopal Aggarwal Sidharth Parakh, CAs For the Respondent : Shri V. K. Singh, CIT-DR ORDER PER ARUN KHODPIA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Principal Commissioner of Income Tax (Appeals)-1, Raipur, dated 30.03.2022, and pertains to assessment year 2017-18. 2. The assessee has raised the following grounds of appeal: 1. That the H'ble PCIT, Raipur erred in appreciating the facts properly. 2. That the Hon'ble PCIT erred in treating the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had claimed and was allowed depreciation @30% on heavy vehicle (Hyva and Tipper) amounting to Rs.1,25,41,649/- (1,18,71,149 6,70,500), however, it was the Learned PCIT observed that the assessee is engaged in mining contract, these vehicles are primarily used on assessee own business and furthermore, no hire income was shown from the heavy vehicle, therefore, depreciation @15% only should have been allowed to the assessee and thus the excess allowance of depreciation amounting to Rs.62,70,825/- was proposed to be disallowed. In the light of above facts, a show-cause notice under Section 263 of the Act dated 22.03.2022 was issued to the assessee incorporating the above facts, to furnish its reply in support of its claim. Assessee responded towards notice under Section 263, but, the reply of the assessee was not found convincing and therefore, Learned PCIT invoking the provisions of Section 263 of the Act assuming the jurisdiction over the case of assessee have considered that the assessment order passed by Learned AO was erroneous in so far as it is prejudicial to the interest of Revenue, therefore, the assessment order was set aside and the AO was directed to reexamine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said MDO agreement. Learned AR drew our attention to the page 25 of the paper book showing Balance Sheet of the assessee having gross receipt of Rs.79,91,44,513/- and also shows the schedule of Fixed Assets placed in the paper book at page no.27. It was the submission of Learned AR that the machines i.e. vehicles used for transportation under the scope of work assigned to the assessee by Godawari Power and Ispat Ltd. were actually for the work of Godawari Power and Ispat Ltd and thus the said work should be considered as hiring of vehicles, in order to establish the contention of the assessee that the heavy vehicles i.e. Hyva and Tipper are covered within the meaning of motor lorries as prescribed in appendix 1 effective from A.Y. 2006-07 for the purpose of calculation of depreciation under the Income-tax Act. A written submission was furnished by Learned AR, extracted as under: As per the appendix I to the income tax rules, 1962 entry no. 3(a) the following assets qualify to depreciated at higher rate of depreciation (ii)(a) Motor buses, motor lorries and motor taxis used in a business of running them on hire other than those covered under entry (b). The word m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on various decisions has come to the conclusion that dumpers, trucks, tippers, TATA 407, TATA 709. TATA Tankers and other similar vehicles were used in transportation of goods from one place to another and, therefore, they were falling in the category of motor versus motor lorries or other motor taxies and were entitled for depreciation at the rate of 40 per cent as per entry III (3)(ii) of part A of appendix I of 1. T. Rules, 1962. Therefore your honors in the light of the aforesaid observations of the courts, since the tippers/hyva which were used by the assessee are also registered with the RTO as Heavy Goods Vehicle (copy of the RC books have already been submitted) and also owing to the fact that they were being used for transportation of ores by the assessee would fall within the meaning of motor trucks/motor lorries and would qualify for the higher rate of depreciation. 9. Learned AR of the assessee also relied upon the order of ITAT, Rajkot Bench in the case of ACIT vs. M/s. H. D. Enterprise, Bhuj, wherein it was the observation of ITAT that the appellant engaged in in the business of heavy earth moving equipment and vehicles for excavation of over burden (ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted accordingly the order of Learned PCIT deserves to be sustainable wherein it was clearly established that the assessment order is erroneous and so far as it is prejudicial to the interest of revenue in view of Section 263 of the Act. 12. We have considered the rival contentions and perused the material available on record and have analyzed the judicial pronouncement relied upon by the assessee. It was the admitted fact that during the year under consideration assessee has claimed a higher depreciation on heavy vehicles used by the assessee in its mining contract which were treated as used by assessee in its own business by the Learned PCIT. Assessee s submissions that the Hyva and Tipper were used for transportation of goods, which were in the scope of work of the MDO contract with Godawari Power and Ispat Ltd., therefore, the assessee had accounted for the entire receipt for the contract under one head i.e. Gross Work . Therefore, only by for not showing the hire / transportation income separately in the books of account, the assessee cannot be barred to avail the benefit of additional depreciation as available under the provisions of Income-tax Act. It was also the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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