The order of the Bench was delivered by
Mahavir Singh, Judicial Member - This appeal by the assessee is arising out of the order of Commissioner of Income-tax (Appeals)-VI, Kolkata ("CIT(A)" for short) in Appeal No. 929/CIT(A)-VI/09-10/Cir-5/Kol, dated December 2, 2010. The assessment was framed by Assistant Commissioner of Income-tax, Circle-5, Kolkata under section 147/143(1) of the Income-tax Act, 1961(hereinafter referred to as "the Act") vide his order dated November 18, 2009 for the assessment year (AY) 2005-06.
2. The only issue in this appeal of the assessee is against the order of the Commissioner of Income-tax (Appeals) confirming the action of the Assessing Officer (AO) in restricting the depreciation to 25 per cent as against 40 per cent claimed by the assessee on the asset "reach stacker" which falls under the head "motor lorries as envisaged in Entry III E (1A) of Part I of Appendix-I". For this, the assessee has raised following ground No. 2 :
"2. That on the facts and on the circumstances of the case the Commissioner of Income-tax (Appeals) had grossly erred in not holding/appreciating the fact that 'reach stacker' which is a sophisticated mobile crane used by the appellant for the purpose of its business of cargo lifting, handling and moving, on hire, and registered as a heavy motor vehicle, clearly falls within the scope and ambit of the expression 'motor lorries' as envisaged in Entry III E (1A) of Part I of Appendix I and thus is entitled to depreciation of 40 per cent instead of 25 per cent. as allowed by the Assessing Officer. Such action of the Commissioner of Income-tax (Appeals) in upholding/confirming the Assessing Officer's action in restricting the depreciation to 25 per cent only, instead of 40 per cent as claimed by the appellant, is bad in law, illegal and ab-initio void and is subjected to be cancelled/ quashed/set aside."
3. Briefly stated facts are that the assessee is engaged in the business of cargo lifting (that means, loading the container from the godown of the port and unloading the same in the ship or vice-versa). The assessee is having one asset reach stackers, which have the road permit under the area Motor Vehicles Act, 1988 and the vehicle is used for carrying of goods in the port area. The assessee claimed depreciation on the reach stacker at 40 per cent but the Assessing Officer during the course of assessment proceedings restricted the depreciation to 25 per cent. Aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who confirmed the action of the Assessing Officer by observing in para 4 of his order, which reproduced as under :
"4. I have carefully considered the above submissions of the learned authorised representative. First of all let us see the type of assets on which depreciation is allowable at 40 per cent for the assessment year 2005-06. As per Appendix 1A read with rule 5(1A) of the Income-tax Rules, for the assessment year 2005-06 depreciation at 40 per cent. was allowable for the following assets :
'Motor buses, motor lorries and motor taxis used in a business of running them on hire.'
Here, the 'reach stacker' used by the assessee is neither motor bus nor motor taxi. The learned authorised representative has claimed that it should be treated as a 'motor lorry'. In this respect I would like to point out that as per the registration certificate of the RTO produced by learned authorised representative this reach stacker has been registered as 'H.G.V. non-transport' and its type has been shown as a 'mobile crane'. These facts clearly show that this machinery 'reach stacker' has not been approved by the Transport Department itself as a transport vehicle. When some vehicle is not a transport vehicle it will be extremely far fetched to try and bring it under the category of a 'motor lorry'. Whenever we use the term 'motor lorry' it means a vehicle which is used to transport freight or goods from one place to another. But here the machine 'reach stacker' is merely a mobile crane which is used to shift containers and other heavy articles from one place to another within port or dock area. Even in the brochure for this machine submitted by the learned authorised representative it is mentioned as follows :
'Reach stacker Loaded container handler'
Further, in this brochure itself it is mentioned that the speed of this machine cannot be more than 25 kmph. These things clearly show that this 'reach stacker' is basically a mobile crane which is used for handling loaded containers in 'cargo handling facilities' and is not a vehicle for carrying goods from one place to another as is done by motor lorries. The transport department has itself said that it was a non-transport vehicle. Hence this 'reach stocker' cannot be equated with a 'motor lorry' as provided in the depreciation chart.
As regards the case of Gujco Carriers v. CIT [2002] 256 ITR 50 (Guj) relied on by the learned authorised representative I feel that from the contents of the decision it appears that in that case the vehicle under consideration was a transport vehicle (registered as a heavy motor vehicle) on which a crane had been mounted. Since such vehicle had been registered as a transport vehicle honourable court may have accepted it as a motor lorry though a crane was mounted on it. But in this case 'reach stacker' is not a transport vehicle at all hence the question of treat in this as a motor lorry does not arise. However, as against this case in the case of CIT v. Shriram Transport Finance Co. Ltd. [2002] 254 ITR 558/[2003] 128 Taxman 123 (Mad), the honourable Madras High Court has held that a mobile crane could not be called a road transport vehicle. In this decision honourable High Court observed as follows :
'The purpose for which the cranes are used is altogether different from the purpose for which a road transport vehicle is used.
The fact that the crane is capable of lifting weights and carrying them over a distance as also the fact that the crane is capable of motion, being mounted on wheels, does not take way its essential character of being a machinery used in mining.
The crane was used in the quarry, and not on public roads, for moving the granite mobile crane used in quarrying operation was not a road transport vehicle but an item of machinery and was entitled to additional depreciation.'
In view of the above discussion I hold that 'reach stacker' used by the assessee in its business of cargo handling is a machinery on which depreciation is allowable at the rate of 25 per cent and not 40 per cent. Therefore, I confirm the disallowance of depreciation of Rs.39,28,138 made by the Assessing Officer."
Aggrieved, the assessee came in the second appeal before us.
4. We have heard the rival contentions and gone through facts and circumstances of the case. We find that the Assessing Officer during the course of assessment proceedings noticed from the schedule of depreciation that the assessee has claimed depreciation on "reach stacker" at 40 per cent. According to Assessing Officer, "reach stacker" does not fall in the category of heavy motor vehicle and rate of depreciation should have been at 25 per cent instead of 40 per cent claimed by the assessee. The Commissioner of Income-tax (Appeals) also confirmed the action of the Assessing Officer. We find that the nature of vehicle mentioned in the registration certificate issued by the Regional Transport Officer, Kohima, Nagaland is that of non-transport mobile crane. This certificate is enclosed in the assessee's paper book at page 44. Further, as per the copy of invoice of TIL Ltd., which is enclosed in the assessee's paper book at page 48. The description of vehicle is as under :-
"1(one) no. reach stacker (container handler) model RSL-45, capacity 4ST, 4 high in 1st row, 2ST, 4 high in 2nd row and 12T, 3 high in 3rd row, complete in all respects machine srl. No. 34052"
5. Learned counsel for the assessee has also drawn our attention to the certificate of CRL dock permit, wherein this vehicle was taken on hire to prove that the assessee is giving this vehicle on hire basis. The relevant document is enclosed at the assessee\qs paper book page 51. Learned counsel for the assessee also drew our attention to the definition of heavy goods vehicle as per section 2 of the Motor Vehicle Act, 1988, which is as under:
"(16) 'heavy goods vehicle' means any goods carriage the gross vehicle weight of which, or a tractor or a road-roller the unladen weight of either of which, exceeds 12,000 kilograms ;"
6. Even unladen weight mentioned in the certificate of registration in this vehicle 45,000 kgs. Learned counsel for the assessee also drew our attention to the observations made in the assessment order for the assessment year 2007-08 and on the same vehicle the Assessing Officer has allowed the depreciation at 40 per cent vide order under section 143(3) of the Act dated December 15, 2009. We find from the income and expenditure account that the assessee's only income is that from hiring of this "reach stacker", i.e., crane. We are of the view that this crane is a heavy goods vehicle falling under entry in old Appendix I (applicable for the assessment years 2003-04 to 2005-06) under the heading III machinery and plant (3) (ii), which is on the basis of definition given in the Motor Vehicle Act, 1988. In this table of rates at which depreciation is admissible is prescribed on this motor lorries at 40 per cent. From the facts in entirety, we are of the view that "reach stacker" which is a sophisticated mobile crane manufactured by TIL Limited with a brand name RSL 45 is nothing but motor car also called motor lorries under the heavy goods vehicle. "Heavy goods vehicle" as per section 2 of the Motor Vehicle Act, 1988 means any goods carriage the gross weight of which, or a tractor or a road roller the unladen weight of either of which, exceeds 12,000 kilograms. Certificate of registration issued by the Regional Transport Officer, Kohima, Nagaland as mobile crane having vehicle No. NL 01 G 1810 proves that "reach stacker" is a mobile crane under the heavy goods vehicle. Nature and utility of the "reach stacker" will clear the type of vehicle and help us to come to the conclusion that "reach stacker" is nothing but a industrial motor car and/or industrial motor lorries. It is a special type of industrial truck which provides special services of lifting load, moving it side by side, rotating it or moving it horizontally. Most industrial trucks permit mechanized pick up and deposit of the loads, eliminating manual work in lifting as well as transporting. It will thus, be clear that motor vehicles like fire trucks, fork lifts trucks, crane trucks and reach stacker which are designed for special services fall within the category of "motor trucks" (also called "motor lorries". Even the Revenue in future assessment years has allowed the claim of the assessee.
7. Once fall under this category, the assessee is entitled the depreciation at 40 per cent and this view is supported by the honourable High Court of Gujarat in the case of Gujco Carriers v. CIT , wherein it is held as under (page 59) :
"14. Thus, a mobile crane mounted on a truck constitutes a single unit known as a 'truck crane' which is adapted for use upon roads for special services. The truck on which the crane is mounted is constructed and adapted specially to carry the crane.
14.1 'Goods carriage' as defined in section 2(14) of the Motor Vehicles Act, 1988, means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. This definition is not confined only to carriage of freight which is narrower than the expression 'carriage of goods'. In the instant case, the truck is adapted for use solely for carriage of the crane mounted on it. The mounted crane is attached to the truck which carries it. The test of carrying goods such as potatoes and tomatoes that require loading and unloading in the context of carriage of freight when transported, as was suggested on behalf of the Revenue, will not be decisive. Unloading, in the context of truck crane where the crane remains mounted and attached to the truck when carried and even at the destination where it is put to use is not a relevant factor at all. Though not required to be loaded or unloaded like other goods transported in carriage of freight, the crane remains fixed, mounted on the truck which has been adapted for use solely for its carriage and such truck crane is used for special service of lifting and moving heavy objects. This is why such a mobile crane is registered as a heavy motor vehicle which is a heavy goods vehicle as defined in section 2(16) of the Motor Vehicles Act.
15. The approach of the Tribunal and the authorities below it that cranes are not mentioned specifically as an independent item falling in the categories for which higher depreciation allowance at the rate of 40 per cent when used for hire and at 30 per cent. when not so used has been provided as against 10 per cent of machinery in general, and therefore, they should be treated as falling in the general category of machinery, is an over-simplification of the matter. The approach of the Tribunal that the plea taken by the assessee that crane was an integral part of the motor vehicle on which it is mounted required ascertainment of facts and fresh investigation, amounts to imposing a burden on a person to prove something of which a court or the Tribunal can take judicial notice. For example, if a witness deposes that he had seen a horse, the court need not insist upon him for a proof of the anatomy of a horse and can take a judicial notice of the horse as an animal. The courts and Tribunals are not required to act dumb or ignorant of the facts of which judicial notice can be taken. Thus, just as a court can presume what a horse is, it can as well know what a crane is, and also that crane is an integral part of a truck-crane which is registered as a heavy motor vehicle. Lack of effort and knowledge sufficient for taking such judicial notice should not be a burden on the citizens in judicial proceedings. As provided by section 56 of the Evidence Act, no fact of which the court will take judicial notice, need be proved. This equally applies to the Tribunals which are not in fact strictly bound by the rules of evidence.
16. The mobile crane of the assessee which admittedly was registered as a heavy motor vehicle, would, for the above reasons, clearly fall within the expression 'motor lorries' (which means motor trucks) in entry No. IIIE(1A) of the table in Appendix I under rule 5 of the said Rules, since it was used by the assessee in its business of running the crane on hire.
16.1. We, therefore, hold that the Tribunal was not right in holding that the assessee was not entitled to depreciation at the rate of 40 per cent on crane mounted on motor truck. The question referred to us is, therefore, answered in the negative, in favour of the assessee and against the Revenue. The reference stands disposed of accordingly with no order as to costs."
8. In view of the above, we allow the appeal of the assessee.
9. In the result, the appeal of the assessee is allowed.
The order pronounced in the open court on July 11, 2013.