Self-propelled motor vehicle qualified for depreciation at 33.4%

Fact and issue of the case

The appeal filed by the Revenue and Cross Objection filed by the assessee are against the order of the National Faceless Appeal Centre (NFAC), Delhi, in proceeding u/s. 250 vide order dated 12/07/2022 passed for the assessment year 2016-17

The Department has taken the following grounds of appeal

Whether the CIT(A) has erred in law and on facts in deleting the disallowance of Rs 41,23,26.600/- U/S.14A r.w.r. 8D of the IT Act made while computing income under normal provisions of the Act

Whether the CIT(A) has erred in law and on facts in deleting the disallowance of Rs 41,23,26,600/- u/s.14A r.w.r. 8D of the IT Act made to income computed u/s. 115JBof the Act

Whether the CIT(A) has erred in law and on facts in deleting the disallowance of excess claim of depreciation of Rs 91,07,912/-without appreciating facts brought by the A.O

The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary

It is, therefore, prayed that the order of Id. CIT(A) may be set aside and that of the Assessing Officer be restored

The assessee has taken the following grounds in the cross objection

In law and on the facts and in the circumstances of the appellant’s case, the impugned Appellate Order passed u/s 250 of the Act by the NFAC, Delhi is void and deserves to be quashed

In law and on the facts and in the circumstances of the appellant’s case, the NFAC, Delhi has erred in passing the Appellate Order by restricting the impugned disallowance to Rs.2,66,445/- u/s 14A r.w.r 8D when no such disallowance is called for

The appellant craves to add to, alter, amend and/or withdraw any ground or grounds of appeal eith before or during the course of hearing of the appeal

At the outset, the counsel for the assessee submitted that he shall not be pressing for the cross objections

Accordingly, the cross objections filed by the assessee are being dismissed as not pressed

Observation of the court

We have heard the rival contentions and perused the material on record. It would be useful to refer to some of the judicial precedents which have thrown light on the meaning of self-propelled vehicles. In the case of Crompton Engg. Co. (Madras) Ltd.93 ITR 483 (Madras), the High Court made the following observations in this regard

Merely because the jeep has four-wheel propulsion and is used through jungles and hilly terrains, it would not make it different from a motor car particularly when the motor car and the jeep have the following common features

both the vehicles are mounted on wheels upon which they run over the surface of the land

both the vehicles are guided and controlled by a person riding upon or in them

both are designed and intended to carry one or more persons; and

both are propelled by power not supplied from any source external to themselves but which is for the time being stored and generated within themselves and both are self-moving vehicles

In the case of John Energy Ltd. v. DCIT 59 taxmann.com 75 (Ahmedabad – Trib.), the Ahmedabad ITAT observed as under

Fire engine also called fire truck is a self-propelled mobile piece of equipment used in fire fighting

In the case of Gotan Lime Stone Khanij Udyog 170 Taxman 442 (Rajasthan), the High Court held that

Under the scheme of the Motor Vehicles Act, 193, the “road transport vehicle” has not been specifically defined but the “motor vehicle” or “vehicle” has been defined under section 2(28) of the said Act, which reads as under

motor vehicle’ or ‘vehicle’ means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimetres

From a bare reading of this sub-section, it is clear that any mechanically propelled vehicle adapted for use on roads is a motor vehicle but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimetres

In the case of Gujco Carriers122 Taxman 206 (Gujarat), the Gujarat High Court held that under

Lorry or truck would, therefore, mean not only any motor vehicle designed to carry freight or goods but also to perform special services like fire fighting. Fire engine also called fire truck is a self-propelled mobile piece of equipment used in fire fighting

In light of the observations, we are of the considered view that motor vehicles qualify as self-propelled vehicles and accordingly, we find no infirmity in the order of Ld. CIT(Appeals), who has allowed relief to the assessee with respect to this issue

In the result, ground number 3 of the Department’s appeal is dismissed

The balance grounds of appeal raised by the Department are general in nature and do not require any specific adjudication

In the combined result, the Appeal of the Department is dismissed and the Cross Objections filed by the assessee are also dismissed

Order pronounced in the open court on 25-04-2023