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IN THE INCOME TAX APPELLATE TRIBUNAL " B " BENCH, MUMBAI
,
,
BEFORE SHRI DINESH KUMAR AGARWAL, JM AND
SHRI SANJAY ARORA, AM
./I.T.A. No. 8455/Mum/2010
( / Assessment Year : 2007-08)
Dy. Commissioner of /
M/s Brink's Arya India
Income-tax Vs. Pvt. Ltd.,
Central Circle - 39, International House,
Room No. 32(1), Ist Marine Cross Road,
GroundFloor, Churchgate,
Aayakar Bhavan Mumbai - 400020.
M.K. Road,
Mumbai 400 020.
. / PAN : AAACB3302R
( /Appellant) .. ( / Respondent)
/ Appellant by : Shri Mohit Jain
/ Respondent by : Shri Y.P. Trivedi &
Ms. Usha Dalal
/ Date of Hearing : 07-02-2013
/Date of Pronouncement : 15-02-2013
/ O R D E R
PER DINESH KUMAR AGARWAL, JM. :
This appeal preferred by the Revenue is directed against the order dtd.
18-10-2010 passed by the ld. CIT(A)- 41, Mumbai for the assessment year
2007-08.
2. Briefly stated facts of the case are that the assessee company is engaged
in the business of secured transportation of diamond and jewellery, cash,
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ITA No.8455/Mum/2010
precious metals, ATM services and safe deposit vaults etc. The return was
filed declaring total income of Rs. 14,71,97,951/-. During the course of
assessment proceeding it was observed by the A.O. that the assessee has
claimed depreciation on motor vehicles @ 30% whereas as per normal
provisions, depreciation @ 15% is allowable to the assessee. On being asked,
it was stated that the assessee has claimed depreciation on
Armoured/Security vans @ 30% amounting to Rs. 67,22,156/- on the plea
that it is engaged in the business of secured transportation of diamond and
jewellery, cash, precious metals, ATM services and safe deposit vaults etc. for
which it uses motor lorries customized as Armoured/Security vans and further
that these Armoured/Security vans are customized motor lorries which are
used in the business of running them on hire for transportation of valuables;
thus depreciation thereon is allowable @ 30% as per item III (2) (ii) of Appendix
1 to the Income Tax Rules, 1962, both on the opening WDV of the block as
well as additions made thereto. The assessee also submitted a detailed reply
vide letter dtd. 14/12/2009 which is on similar lines as was done in the earlier
assessment years. However, the A.O. after relying on certain decisions allowed
the depreciation on security van at 15% as against the claim of the assessee at
30% on the ground that the assessee is not engaged in the business of running
the vehicles on hire and accordingly disallowed the excess claim of
depreciation Rs. 33,61,078/- and added the same to the total income of the
assessee and thereby completed the assessment at an income of Rs.
15,05,59,030/- vide assessment order dtd. 24-12-2009 passed u/s 143(3) of
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the Act. On appeal, the ld. CIT(A) following the Tribunal order in assessee's
own case for the assessment years 2000-01 to 2006-07, however, allowed the
claim of the assessee.
3. Being aggrieved by the order of the ld. CIT(A) the Revenue is in appeal
before us taking following grounds of appeal:-
"1. On the facts and in the circumstances of the case and in law, the ld.
CIT(A) was not correct in directing the Assessing Officer to allow higher rate of
depreciation at 30% on security vans.
2. The appellant prays that the order of Commissioner of Income-tax
(Appeal) on the above ground be set aside and that the Assessing Officer be
restored. The appellant craves leave to amend or alter any grounds or add a
new ground which may be necessary."
4. At the time of hearing the learned D.R. supports the order of the A.O.
5. On the other hand the ld. counsel for the assessee, at the outset,
submits that the issue is covered in favour of the assessee by the decision of
the Tribunal in assessee's own case for the assessment years 2001-02 to 2006-
07. He further submits that the Hon'ble jurisdictional High Court in CIT vs.
M/s Brinks Arya India Pvt. Ltd. vide judgment dtd. 29-3-2011 has upheld the
order of the Tribunal by holding that the decision of the Tribunal is based on
the finding of fact and no substantial question of law arise in these appeals
and, hence, dismissed the Revenue's appeal. He further submits that the
Hon'ble Supreme Court in CIT vs. M/s Brinks Arya India Pvt. Ltd. vide
judgment dtd. 5-12-2011 has also dismissed the special leave petition filed by
the Revenue. He also placed on record the copy of the said decisions. He,
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therefore, submits that the order passed by the ld. CIT(A) allowing the rate of
depreciation at 30% as against 15% allowed by the A.O. be upheld.
6. We have carefully considered the submissions of the rival parties and
perused the material available on record. We are of the opinion that the issue
involved in the present case is no more res integra and is covered by the
following decisions:-
7. In DCIT vs. M/s Brink's Arya India Pvt. Ltd. in ITA No. 5086, 5278 &
7175/Mum/2005 for assessment years 2001-02 to 2003-04 order dtd. 30-3-
2009 it has been held vide para 14 of the order as under:-
"14. We have carefully considered the submissions of the rival parties and
perused the material available on record. We find that there is no dispute that
the main objects of the assessee company are- [page 7 of CIT[A]'s order] :
1) To establish and carry on business either solely or in partnership
with other firms, companies or corporations of protecting and
transporting valuables including jewellery, precious metals and
stones, negotiable and non-negotiable instruments and securities,
stocks bonds, valuable documents and objections and other
commodities for customers by armored car and other vehicles
and to render related services on all international air courier
shipments to and India.
2) To manufacture, repair, buy sell, lease and deal in property and
equipment concerning the transportation of valuables a detailed
in the preceding clause including safes, chest and cash
protectors.
3) To provide security and handling services including services
relating to clearing, forwarding, transportation, safe custody,
travel handling and coin processing.
We further find that it is also not in dispute that the majority of the assets are
relating to transport and the main income of the assessee company is from
freight and related charges. Under item [2][ii] of heading III PLANT AND
MACHINERY of Appendix I of table of rate of depreciation, the higher rate of
depreciation is admissible on motor buses, motor lorries and motor taxis used
in a business of running them on hire. In CIT vs. Gupta Global Exim P. Ltd
[S.C] [supra], there is a categorical finding of the AO that the assessee was
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ITA No.8455/Mum/2010
occasionally in the business of transportation and mainly he was in the
business of importing timber longs and selling them in India. Their Lordships
while observing that "the user of the same in the business of the assessee of
transportation is the test." Held that merely because the income from letting of
the trucks on hire was included in the business income, the higher rate would
not apply. However, the matter was remanded for fresh decision to the
Commissioner [Appeals] as to whether the assessee was in the business of
running the motor buses on hire. However, in the case before us, the assessee
has proved that it has used the security vans for transportation of cash
valuables etc. It is not the case of the revenue that the assessee has not used
the said security vans for its business of transportation of cash, valuables etc.,
or the same has not been used mainly for business of the assessee of
transportation of cash, valuables etc. In the aforesaid case in CIT vs. Gupta
Global Exim P. Ltd., which has also been considered and distinguished in CIT
vs. M/s Parikh Petrochemicals Agencies Pvt. Ltd. [supra], the assessee's main
business was importing timber longs and selling them. Whereas in the case
before us, the assessee has proved that the transportation of cash and
valuables was its main business. Under the aforesaid facts and circumstances,
the decision relied on by the Ld.DR in CIT vs. Gupta Global Exim P. Ltd is
distinguishable and not applicable to the facts of the present case. That being
so and keeping in view that the revenue has failed to controvert the finding of
the ld. CIT[A], we are of the view that the assessee is entitled to claim
depreciation @ 40% and accordingly, we are inclined to uphold the finding of
the ld. CIT[A] in directing the AO to allow depreciation on security vans @ 40%.
The ground taken by the revenue is, therefore, rejected."
8. The above order of the Tribunal has been followed by the Tribunal in
assessee's own case for the assessment years 2004-05 to 2006-07.
9. In CIT vs. M/s Brinks Arya India Pvt. Ltd. in Income Tax Appeals No.
802 of 2010 and Others vide judgment dtd. 29-03-2011, the Hon'ble
jurisdictional High Court has observed and held as under:-
"Whether the Tribunal was justified in holding that the assessee is entitled to
higher depreciation at 40% when the assessee was not engaged in the business
of giving the vehicles in hire, is the question raised in these appeals. The
Tribunal has held that the assessee has proved that the security vans have
been used for transportation of cash, valuables belonging to the third parties
as that is the business of the assessee. This fact is not disputed. Thus, the
decision of the Tribunal is based on finding of fact and no substantial question
of law arise in these appeals. All the appeals are dismissed with no order to
costs."
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10. In CIT vs. M/s Brinks Arya India Pvt. Ltd., the Hon'bble Supreme Court
vide its judgment dtd. 5-12-2011 has held as under :-
"Delay condoned.
The special leave petitions are dismissed."
11. Respectfully following the above authoritative pronouncements, the
order passed by the ld. CIT(A) accepting the claim of the assessee is upheld.
12. In the result, Revenue's appeal stands dismissed.
Order pronounced in the open court on 15-02-2013. .
15-02-2013
Sd/- sd/-
(SANJAY ARORA) (DINESH KUMAR AGARWAL)
/ ACCOUNTANT MEMBER / JUDICIAL MEMBER
Mumbai; Dated 15-02-2013.
. ../ r.k. , Sr. PS
/ Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- 41, Mumbai
4. / CIT -4, Mumbai
5. , , /
DR, ITAT, Mumbai B Bench
6. / Guard file.
//True Copy//
/ BY ORDER,
/
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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