October 2008
Investment allowance : S. 32A : Dumpers, tippers and hydraulic excavators are construction equipment vehicles, not road transport vehicles : Eligible for investment allowance
By K. B. Bhujle, Advocate
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8 Investment allowance : S. 32A of
Income-tax Act, 1961 : A.Ys. 1989-90, 1990-91 and 1992-93 : Dumpers, tippers
and hydraulic excavators are construction equipment vehicles and not road
transport vehicles : Eligible for investment allowance.
[CIT v. Gotan Lime Stone Khanij Udyog, 170 Taxman
442 (Raj.)]
The assessee was engaged in the business of running
hydraulic excavators and tippers for cement companies on hire basis by
realising rent for operation of the same. For the A.Ys. 1989-90, 1990-91 and
1992-93, its claim for investment allowance on the hydraulic excavators and
tippers was declined by the Assessing Officer on the ground that they were
road transport vehicles and, moreover, the same were not used by the assessee
for its own business. The Commissioner(A) and the Tribunal allowed the
assessee’s claim.
On appeal by the Revenue, the Rajasthan High Court upheld
the decision of the Tribunal and held as under :
“(i) Under the Motor Vehicles Act, 1989, the dumpers,
tippers and hydraulic excavators are construction equipment vehicles within
the definition of Rule 2(ca) of the 1989 Rules and are non-transport
vehicles by virtue of Explanation attached to this definition, and cannot be
categorised as road transport vehicles for the purpose of entitlement of
investment allowance u/s.32A.
(ii) The construction equipment vehicles like dumpers,
tippers and hydraulic excavators are not road transport vehicles and profit
gained out of it by letting them out on hire basis to a cement producing
industrial undertaking could not debar them from claiming investment
allowance u/s.32A.”
