SHRI RAJ KUMAR YADAV,GURGAON vs. DCIT, GURGAON

ITA 2740/DEL/2016Status: DisposedITAT Delhi11 April 2019AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the bus and tempo traveller clearly fall under the definition of commercial vehicles. Therefore, depreciation at the rate of 50% is allowable as per the Income Tax Act.

What were the facts?

The assessee claimed 50% depreciation on a bus and a tempo traveller, which was disallowed by the lower authorities who restricted it to 30%. The assessee argued that these vehicles were used for commercial purposes, specifically for staff transport.

What were the issues?

Whether depreciation at 50% is allowable on vehicles used for commercial purposes, specifically staff transport, when lower authorities restricted it to 30%.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but related to depreciation provisions for commercial vehicles.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI

Before: SHRI LALIET KUMAR & Dr. B.R.R. KUMAR

Hearing: 09.04.2019Pronounced: 11.04.2019

1. That the Commissioner of Income-tax (Appeals) erred on facts and in law in upholding the disallowance of depreciation to the tune of Rs. 2,82,426 on vehicles (i.e., bus/tempo traveller), on the ground that such vehicles were not used for commercial purposes. 1.1. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that the vehicles were used by the appellant purely for commercial purposes and thereby, depreciation @ 50% was rightly claimed. That the Commissioner of Income-tax (Appeals) erred on 1.2.

facts and in law in not appreciating that the business of the assessee is of transport (carrying the staff for different companies) and therefore the disputed vehicles i.e. Bus and Tempo Traveller are Commercial Vehicles. That the Commissioner of Income-tax (Appeals) erred on 1.3. facts and in law in holding the view taken by A.O. that commercial vehicles cannot be hiring vehicles. 1.4. That the Commissioner of Income-tax (Appeals) erred on fact and in law in holding that the appellant failed to substantiate that the aforesaid vehicles were used for commercial purposes. That the commissioner of Income Tax (Appeals) has 1.5. wrongly mentioned that no evidence has been filed to show the vehicles are commercial in nature is totally wrong as copy of receipt of passenger tax /road permit mentioning the vehicles as Commercial were produced and were put on record.

The moot issue to be adjudicated in this case is that whether the depreciation claimed by the assessee at the rate of 50% as pleaded before us is allowable as per the provisions of the Income Tax Act or not.

The Ld. CIT(A) confirmed the additions made by the AO on the grounds that the depreciation on (a) Bus- 1986 (b) Tempo Traveller- 7344 was to be allowed only at the rate of 30%. The Ld. CIT(A) held while confirming the addition (or) restricting the depreciation that no documentary evidence was produced by the assessee at the assessment stage to show that the vehicles were “commercial” as per the definition and no such claim was made before the AO.

On perusal of the documents filed before us in the paper book namely the Registration certificate and the insurance policy and by the very nature of the vehicle i.e. bus and tempo traveller, we find that they straightly fall under the definition of commercial vehicles and eligible for 50% depreciation as per part B of the depreciation table wherein it has been clearly mentioned that new commercial vehicles which are acquired on or after first day of January, 2009 but before the first day of April, 2009 and is put to use before the first day of April, 2009 for the purpose of business or profession are eligible for depreciation at the rate of 50%. (Vide notification no. 10/2009 dated 19.01.2009 w.e.f. 01.09.2009). Commercial vehicle is defined in the notes to the Depreciation table as under: “3A. Commercial vehicle means heavy goods vehicle, heavy passenger motor vehicle, light motor vehicle, medium goods vehicle and medium passenger motor vehicle but does not include maxi-cab, motor-cab, tractor and road- roller. The expressions heavy goods vehicle, heavy passenger motor vehicle, light motor vehicle, medium goods vehicle, medium passenger motor vehicle, maxi-cab, motor-cab, tractor and road-roller shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988).”

Hence, keeping in view the provisions of the Act, depreciation is hereby allowed at the rate of 50% on the two vehicles.

As a result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 11.04.2019.

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