GUJCO CARRIERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Ahmedabad Bench `C' has referred the following question for the opinion of the High Court under section 256(1) of the Income Tax Act, 1961 :

(2.) The matter relates to the Assessment Year 1982-83. The assessee had purchased for Rs.10,87,248=00 a mobile crane on 19/11/1981 and claimed depreciation of Rs.4,34,898=00 at the rate of 40% thereon stating that it was used in the business of running it on hire and so, it will fall under clause E(1A) of Part I of Appendix 1 to the Income Tax Rules, 1962. This was mentioned in the statement of total income filed alongwith the returns for the Assessment Year 1982-83.

(3.) During the assessment proceedings, the assessee was asked to state reasons why depreciation at the general rate of 10% applicable to machinery and plant under the said Appendix should not be applied as `crane' was not included in the items of machinery to which higher depreciation at 40% was admissible. The assessee replied that the crane was required to be registered with the R.T.O. and it was a heavy motor vehicle and therefore, depreciation at 40% was admissible under Clause III E(1A) of part I of Appendix 1 to the Income Tax Rules. The Income Tax Officer, by simply stating, "crane is not included therein. I therefore grant depreciation only at 10% on crane", disallowed the claim at the rate of 40% made by the assessee under Clause III E(1A) of Part I of Appendix 1.