ARJUN SINGH S/O SHRI TARA SINGH vs. ASSISTANT COMMISSIONER OF INCOME TAX

Judgment 22/10/2018 (PER HON’BLE MOHAMMAD RAFIQ, J.) This appeal is directed against the judgement of the Income Tax Appellate Tribunal, Jaipur dated 5.12.2017, whereby the appeal of the assessee against the order of the CIT(A) dated 5.12.2017 was dismissed, thereby affirming the assessment order dated 3.2.2016. The appellant-assessee is a sole proprietorship firm engaged in the business of civil work in the name and style of M/s. Gagan Stone. Appellant filed his return of Income Tax for the Assessment Year 2009-2010 declaring income at Rs. 86,01,100 by claiming the higher rate of depreciation on trucks/dumpers @ 30% under Section 32 read with Rule 5 of the Income Tax Rules, 1962. Assistant Commissioner of Income Tax, Circle-2, Kota on (2 of 4) [ITA-273/2018] 03.01.2016 passed the assessment order for the assessment year 2009-2010 under Section 143(3)/250/147 of the Income Tax Act, 1961 by holding that since the assessee/appellant is not engaged in the business of running vehicles on hire, therefore, higher rate of depreciation is not allowable, hence depreciation @ 30% instead of 15% claimed by the assessee on the above mentioned items (trucks/dumpers) is not allowable, therefore, excess depreciation amounting to Rs. 22,77,188 claimed by the assessee is hereby added to the total income of the assessee. Against the aforesaid assessment order dated 03.01.2016, the appellant- assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Kota. The Commissioner of Income Tax (Appeals), Kota rejected the appeal vide its order dated 05.12.2017. Against the aforesaid order of the Commissioner of Income Tax (Appeals), Kota the appellant-assessee preferred appeal before the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur. The Tribunal dismissed the appeal vide its order dated 06.06.2018. Hence this appeal. Shri Hemant Gupta, learned counsel for the appellant has argued that the CIT(A) as well as Tribunal failed to appreciate that the value of the trucks and dumpers, which were engaged in the business of civil work, tend to depreciate quickly and at a higher rate and such trucks and dumpers in a case of civil contractor should be considered as “machinery” and not merely motor vehicles for which there is a pre-condition that they should be used in the business of running them on hire in order to claim higher depreciation. After taking them as “machinery”, they should

(3 of 4) [ITA-273/2018] be considered for higher rate of depreciation @ 30% under the provisions of Section 32 read with Rule 5 of the Income Tax Rules, 1962 to be granted to the assessee irrespective of the fact that the trucks and dumpers were not being used in the business of running them on hire. Another argument of learned counsel for the appellant is that higher rate of depreciation of 40% on new commercial vehicles used in the business and profession was granted only in the years 1999, 2001 and 2009 and not in the subsequent assessment years including the assessment year in question. Learned counsel in support of this argument has relied on judgement of the Supreme Court in D.S. Nakara vs. UOI-AIR 1983 SC 130. Learned counsel argued that the two substantial questions of law, which the appellant has proposed in the memo of appeal on the basis of the aforesaid two arguments arise for consideration and therefore the appeal ought to be admitted and decided on merits. Perusal of the impugned orders passed by the CIT(A) as also of Income Tax Appellate Tribunal does not indicate whether any of the aforesaid two arguments were raised on behalf of the appellant-assessee before either of the forums. On a pointed query by the Court, learned counsel for the appellant has submitted that since these are arguments of law, they can be raised directly before this Court as the action of the respondents is violative of Article 14 of the Constitution of India. Having heard the learned counsel for the appellant and perused the impugned order, we find that the two arguments,

(4 of 4) [ITA-273/2018] which the appellant has raised now on the basis of which he proposed two questions of law do not arise in the facts of the present case as no such arguments were raised on behalf of the appellant-assessee before any of the authorities below. Perusal of the order passed by the CIT(A) as also of Income Tax Appellate Tribunal does not reflect whether any one of these arguments were raised by the appellant before them, therefore, such arguments cannot be allowed to be raised before this Court for the first time. The Tribunal in the impugned order has relied on the judgement of the Madhya Pradesh High Court at Gwalior in M/s. Anamay Construction Co. vs. UOI & Ors., ITA No.2/2013, wherein it was held that the assessee had engaged his own trucks for transporting earth to facilitate laying of roads. Under such circumstances, the assessee cannot be said to be in the business of hiring out his trucks for removal of earth to make him entitled for higher rate of depreciation, as removal and transportation of earth are only sub-processes of his main business of laying of roads. The Tribunal on the same assumption had also relied on judgement of the Kerala High Court in Gaylord Constructions- (2010) 190 Taxman 406 (Ker). In view of above discussion, in our considered view, no question of law, much less substantial question of law, arises in this appeal. The appeal is dismissed. (GOVERDHAN BARDHAR),J (MOHAMMAD RAFIQ),J Rs/47