By K. B. Bhujle, Advocate
CIT vs. Anand Transport; 396 ITR 204
(Mad):
The assessee was in the business of loading
and unloading of bulk cargo, relating to exports and imports, transportation of
cargo, both within and outside the ports and by see and attending to all works,
incidental to the works connected with the main business. The assessee was
awarded a contract by the MMTC on May 6, 2004. A jetty or loading platform was
erected, albeit, temporarily to facilitate loading of iron-ore onto vessels, in
furtherance of the contract awarded by MMTC, in favour of the assessee. The
assessee claimed 100% depreciation on the jetty. The Assessing Officer came to
the conclusion that the jetty or platform was a plant, as it was an apparatus
or tool which only enabled the assessee to carry on its business. The Assessing
Officer’s observation was that the jetty consisted mainly of a belt conveyor
and electrical support, and that the civil work was negligible. The Assessing
Officer further held that the conveyor belt could be dismantled and reused. He
allowed 25% depreciation on the jetty. The Tribunal allowed the assessee’s
claim.
On appeal by the Revenue, the Madras High
Court upheld the decision of the Tribunal and held as under:
“i) A bare perusal of the
meaning of the word “jetty” would show that, it is in the nature of a
construction which is used either as a landing stage, a small pier, bridge,
staircase or a construction, built into the water to protect the harbor. The
utility of the jetty is limited by its construction. It is used to obtain
either access to a vessel, or protect the harbour.
ii) The provisions of the
contract would show that the jetty or loading platform was constructed by the
assessee on build-operate-transfer basis for a period of three years from the
date of commencement of the vessel loading operation. Quite clearly, the jetty
or loading platform, in this case, was erected by the assessee in order to
effectuate its business under the contract entered into with MMTC, which was
tenure based, and therefore, could not have been treated as anything else but a
temporary erection. Upon completion of the contract the assessee was required
to dismantle it.
iii) The fact that the jetty had other contraptions attached to it, such as a
conveyor belt, to facilitate the process of loading could not convert such a
structure into a plant. Therefore, even if the functional test was employed the
main function of a jetty, in the facts of the instant case, is to provide a
passage or a platform to ferry articles onto the concerned vessels. This could
have been done manually. That it was done by using a conveyor belt would not
convert a jetty into a plant. The assessee was entitled to 100% depreciation on
the jetty.”
