|The assessee was engaged in the manufacturing of Ready Mix Concrete (‘RMC’) required in construction business. For manufacture of RMC, the raw materials such as cement, kapchi, sand, fly ash and chemicals were mixed to produce RMC.|
|The transport of RMC was done in Road Transport Vehicle on which a transit mixer was suitably mounted. Assessee claimed that the vehicle used for work should be taken as vehicle used for ‘hire’ eligible for higher rate of depreciation at the rate of 30%.|
|Assessing Officer (AO) restricted claim of dep. to 15 percent. CIT(A) confirmed order passed by AO.|
|The ITAT held that section 32(1)(iia) provides for additional depreciation in the case of new plant and machinery installed after specified date by an assessee engaged in the manufacturing or production of any article or thing.|
|The transit mixer was stated to be mounted on the chassis to enable the RMC manufactured/produced at site to be kept in the wet form for its utilization at construction plant.|
|Therefore, transit mixer mounted on the vehicle was nothing but a plant and machinery where ancillary process was done as a continuation of manufacture/production contemplated under section 32(1)(iia). Therefore, the contention of the assessee for allowability of additional depreciation on mounted mixer was to be accepted.|
ITAT allowed additional depreciation on RMC mixer mounted on truck.
Prakhar Kalani (B.Com, ACA, DISA), Partner at Kalani Gattani & Co. Prakhar Kalani is a Qualified Chartered Accountant . contact him @ firstname.lastname@example.org