TMI Blog1988 (9) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... being used by the assessee in its business of construction of roads. The learned CIT was of the opinion that depreciation on dumpers was available at the rate of 15 per cent only under item III-B(14)(of Appendix I Part i of r. 5 and not under Item III-D(4) of the said Appendix. He, therefore, invoked his jurisdiction under s. 263 of the Act and issued a combined show cause notice t the assessee indicating his intention to pass suitable orders with a view to modify the orders of the ITO. 3. IN response to the show cause notice, the assessee furnished written submissions wearing it was contended that the dumpers had been used for 'earth moving work' and were entitled to depreciation at the rate of 30 per cent. According to the assessee, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment allowance on the dumpers. According to the learned counsel, no attempt was made to disturb the figure of depreciation already allowed by the ITO at 30 per cent. It was further submitted that consequent to the order under s. 263, the ITO once again reformed the assessment and that also after obtaining the necessary instructions of the IAC under s. 144B. The claim of investment allowance, according to him, was once again allowed by the ITO, acting under the directions of the IAC and depreciation at 30 per cent on dumpers was once again allowed. It was submitted that it was this second order of the ITO dt. 27th April, 1983 which was modified by the CIT once again and by resort to the provisions of s. 263. In respect of asst. yr. 1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving machinery". 8. At This stage, we would reproduce the relevant portions of the observations of the IAC in s. 144B proceedings and to which a specific reference was made by the assessee's counsel. They are as under: "I have considered the facts of the case, the submissions and the contentions of the assessee's counsel. I find it as a matter of fact that the assessee uses the dumpers for the purpose of construction of roads as earth moving machinery only". Further considering the normal purposes for which dumpers are used, they cannot be described as "road transport vehicles" in spite of the fact that they may be required to be registered by the Regional Transport Authority. According to the circular, the decisive test in treati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd at each occasion in respect of a different item. It was accordingly submitted that although on merits, the assessee's claim was maintainable, even on the question of jurisdiction the order of the CIT deserves to be set-aside. Before concluding his arguments, the assessee's counsel invited our attention to a circular dt.11th Oct., 1985 issued by the Ministry of Industry and Company Affairs wherein dumpers had been classified a "earth moving machinery". him finally made an impassioned plea for the acceptance of the assessee's claim on merits. 10. The learned departmental representative in the course of his arguments, strongly supported the consolidated order of the CIT. His arguments thereafter proceeded on lines identical to those as h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be necessary to reproduce the relevant entry, viz., Item III-D(4) of Appendix I, part 1: (4) Earth-moving machinery employed in heavy constriction works, such as dams, tunnels, canals etc. "According to us the aforesaid description is only illustrative and not exhaustive since the word used is 'etc". We are also of the view that as far as earth moving work is concerned, it would be the same, whether the construction is that of a road, canal, dam or a tunnel. It would be the same dumper that would have to be said for this type of work although in some cases the earth moving work may be more rigorous and tougher that in other cases, This, however, would not mean that dumpers being used for road construction work would cease to be "eart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned changes". 14. A perusal of the aforesaid circular clearly shows that 'dumpers' have been classified as "earth moving machinery". 15. In the final analysis we would hold that the 'dumpers' being used by the assessee in road construction work would be entitled to depreciation at the rate of 30 per cent. We accordingly set aside the consolidated order of the CIT for all the three years under consideration and restore those of the ITO. 16. Before we part with these appeals, we would like to observe that action under s. 263 should be taken after a proper perusal of the records in respect of all the items which are sought to be encompassed within the said action. It would not desirable to assume jurisdiction under s. 263 in res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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