Commissioner of Income Tax vs Deha Assam Tea Co. (P) Ltd.

Brijesh Kumar, C.J.—The two questions referred to this court u/s 256(1) of the Income Tax Act, 1961, are as follows :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that tractors used as agricultural machinery is entitled to additional depreciation ?

Whether, on the facts and in the circumstances of the case and when the tractors and agricultural machinery were used as agricultural machineries, the Tribunal was justified to hold that the assesses is entitled to investment allowance on such tractors and agricultural machinery ?"

The case of the Revenue is that a tractor would be covered as road transport vehicle. Hence, no investment allowance is admissible u/s 32A of the Income Tax Act. As a matter of fact the same point having once been raised in one of the Income Tax references, a Division Bench of this court in Income Tax Reference No. 3 of 1997 Commissioner of Income Tax Vs. Nandlal Parshuram, by order dated March 4, 1998, answered the question as referred in the case holding that a tractor would not be covered as road transport vehicle and would only be covered as motor vehicle u/s 2(44) of the Motor Vehicles Act which defines the tractor. It would not be a transport vehicle u/s 2(47) of the Motor Vehicles Act. The investment allowance would be admissible for tractors u/s 32A of the Income Tax Act.

After having heard learned counsel for the Revenue we hardly find any good reason to take any different view in the matter from that which has been taken by the Division Bench of this court in Income Tax Reference No. 3 of 1997 Commissioner of Income Tax Vs. Nandlal Parshuram, referred to above. Both the questions thus referred are answered in the affirmative to the effect that the Tribunal was justified in holding that tractors used as agricultural machinery would be entitled to additional depreciation and investment allowance as well.

The reference is answered accordingly and stands finally disposed of.