2009-VIL-440-KER-DT

KERALA HIGH COURT

IT Appeal No. 1255 of 2009

Date: 19.08.2009

CIT, COCHIN

Vs

GAYLORD CONSTRUCTIONS

BENCH

C. N. Ramachandran Nair and C. K. Abdul Rehim, JJ.

JUDGMENT

3. Admittedly JCB which is used on road is registered as a motor vehicle. Though it is not used as a transport vehicle, JCB is a four-wheeled excavator-cum-transport vehicle used for excavation of earth and movement of the same, though for limited distances. Even though the purpose of Motor Lorry which is a heavy motor vehicle used for transport of goods from place to place, cannot be served by a JCB, we are of the view that the expression "motor lorry" covered by the above entry of the Income-tax Rules providing for higher rate of depreciation, has a wide meaning. JCB though basically is used for excavation of soil, it is a heavy vehicle also used for transport of excavated soil, sand or other goods, for a limited distance and the machine is also used to level and shape the land. Therefore, it serves as a transport equipment as well and so long as it is registered under the Motor Vehicles Act, it is a motor vehicle within the meaning of the said term as held by the Supreme Court in the decision above referred. We therefore feel that in a larger sense JCB answers the description of Motor Lorry within the meaning of the entry referred above contained in the Income-tax Rules. There is no dispute that the item is not let on hire by the assessee which is one of the items of business carried on by them. The argument of Senior Standing Counsel that the case decided by the Gujarat High Court is on different facts, appears to be true because their the crane in that case is mounted on the truck and the truck is admittedly entitled to depreciation at 40 per cent. When the crane mounted on the truck, the crane becomes mobile and when both are let out on hire as a mobile crane, the value of the crane also becomes part of the motor lorry entitling for depreciation on the combined value. Even though the facts in the Gujarat decision are different, we still feel the principle applied by the Gujarat High Court is applicable in this case also, because in this case JCB itself is functionally and operationally used as motor vehicle for transport of goods within limited distances. We therefore uphold the view of the Tribunal that JCB is entitled to higher rate of depreciation claimed by the assessee. In the circumstances, the appeal is dismissed.

 

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