1. These four appeals are based on identical facts and common grounds of appeal. All these appeals are, therefore, being decided by a common consolidated order for the sake of convenience. ITA Nos. 263 & 264/Jp/1996 have been preferred by the assessee and ITA Nos. 282 & 283/Jp/1996 preferred by the Revenue against the order of the CIT(A). We, therefore, first take up the appeals of the assessee, which are on the following common grounds of appeal :
"(1) That under the facts and circumstances of the case the learned CIT(A) has erred in restricting the additional depreciation to 75 per cent of the dumpers
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used as mining machinery.
(2) That under the facts and circumstances of the case the learned CIT(A) has erred in not allowing investment allowance on dumpers when the facts of the case are entirely different than that of the case cited by the learned CIT(A)."
2. The first ground of appeal taken by the assessee is against restricting the depreciation to 75 per cent on the dumpers used as mining machinery by invoking the provisions of s. 38(2) of the IT Act. It is, therefore, considered reasonable and justified to go through the provisions of s. 38(2), which reads :
"Sec. 38(2) Where any building, machinery, plant or furniture is not exclusively used for the purposes of the business or profession, the deductions under sub-cl. (ii) of cl. (a) and cl. (c) of s. 30, cls. (i) and (ii) of s. 31 and cl. (ii) of sub-s. (1) of s. 32 shall be restricted to a fair proportionate part thereof which the AO may determine, having regard to the user of such building, machinery, plant or furniture for the purposes of the business or profession."
3. The assessee is in mining business and admittedly dumpers were used for mining purposes and some times as alleged by the AO for transport also. The CIT(A) has accepted in principle that dumpers were mostly used to remove the overburden from the mines and hence categorised it as a mining machinery. He also upheld the claim of the assessee in regard to additional depreciation, but restricted the allowance of depreciation only on the ground that it was not used exclusively for mining business but also for transportation. By very nature of this machinery it cannot be used for personal purposes. The use for transportation is also in regard to carrying at times labourers from mines to other places. This cannot be termed as use of dumpers for other than business purposes. We, therefore, do not agree with the conclusion of the CIT(A) for applicability of s. 38(2). This action of the CIT(A) is held as unreasonable and hence AO is directed to allow full additional depreciation on dumpers.
4. The second ground taken by the assessee is in regard to disallowance of the claim of investment allowance on dumpers. The CIT(A) has disallowed the claim of the assessee on investment allowance by applying the ratio of the decision of the Hon'ble Supreme Court in the case of CIT vs. N.C. Budharaja & Co. & Anr. etc. etc. (1993) : 204 ITR 412 (SC). In this connection, it is observed that the facts in the case of N.C. Budharaja & Co. were altogether different than the facts of the appellant. In the case decided by Hon'ble Supreme Court, the company carried on construction of dams, canals and bridges and hence their Lordships of the Supreme Court were of the opinion that since the company did not produce or manufacture any article or thing, it was not entitled to investment allowance. What their Lordships of the Supreme Court adjudicated in this case was that an article or thing is movable and being movable it can pass on like a commodity from person to person. While what the company did was construction work and not the production or manufacture of an article or thing. In the case of the assessee, the Department by its own action has held that dumpers are not motor vehicles and, therefore, the claim of the depreciation from 40 per cent was restricted to 30 per cent. By default, the Revenue has admitted that it is a mining machinery. Even otherwise dumpers have been held and treated so as mining machinery by the CBDT itself in Circular F. No. 236/27/2/74 & PAC-II dt. 24th February, 1975. This circular was issued after extensive consultation of the Ministry of Law wherein it was considered the use of dumpers and whether they can fall in the category of motor vehicle. The Law Ministry thought that dumpers and tippers should not be treated as road transport vehicles. Since in the instant case, there is enough evidence to show that the dumpers are primarily used in the industrial and mining area from the point of excavation to the point of dumping and vice versa they were not used on the roads and, therefore, not includible as road transport vehicle. This view also gets support from the case of the assessee itself from the order of this Bench of the Tribunal in ITA No. 134/Jp/1988 and in ITA No. 719/Jp/1988 for asst. yrs. 1984-85 and 1985-86, which has been upheld by the jurisdictional High Court in the reference filed by the Revenue against the orders of the Tribunal.
5. In view of these facts, we are of the opinion that the CIT(A) was not justified in rejecting the claim of the assessee on account of investment allowance on dumpers, which are mining machinery in the case of the assessee. This ground of the assessee is, therefore, allowed.
6. Coming to the appeals filed by the Revenue in ITA Nos. 282 & 283/Jp/1996, which are on the following common ground of appeal :
"On the facts and in the circumstances of the case, the learned CIT(A), Ajmer has erred in allowing additional depreciation to the extent of 75 per cent on dumpers treating them mining machinery."
7. We have discussed this ground of appeal while deciding Ground No. 1 of the appeals filed by the assessee. After examining the issue in detail, we have directed to allow 100 per cent additional depreciation and held the disallowance by invoking the provisions of s. 38(2) of the IT Act as wrong and unjustified. Following our decision, this ground of appeal filed by the Revenue is dismissed in both the years.
8. Subject to the above, the appeals filed by the Revenue stand dismissed and the appeals filed by the assessee stand fully allowed