Depriciation rate on earth moving machineries

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Asma (Querist)
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06 March 2010 Please tell me the depriciation rate on earthmoving machinery;
and with reference to the case Sibson Construction & Co. v/s Commissioner of Income Tax; what would be the depriciation rate on :
1) Dumper - if it is used for the purpose of making road
2)Dumper - If it is used for carrying marble blocks; i.e. for minning purposes.

Please do reply earliest as its quiet urgent.

Nilesh Shah

Nilesh Shah (Expert)
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06 March 2010 Nilesh Shah Replies:

For and from A.Y 2006-2007 the Appendix to Income-tax Rules does not have seperate entry for equipment such as

Dumper, Earth Moving Machinery, Mining machinery etc.

Therefore based on the functional test, whether the dumper is used for making roads or for the purpose of mining, it will fall under the heading

" Machinery and Plant other than those covered by sub-items (2),(3) and (8) below" and will be entitled to depreciation @ 15%.

The case which you are referring to is CIT v Sibson Construction and Co 221 ITR 468 (Gauhati) is concerning A.Y 1984-1985 where the present Appendix was not there.

I hope the above shall clarify the issue.

Sincerely,

Nilesh Shah

Asma

Asma (Querist)
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08 March 2010 thank you very much sir,
but what would be the rate of depriciation if we are using dumpers for making roads.
please do reply earliest sie as its quite urgent

Nilesh Shah

Nilesh Shah (Expert)
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08 March 2010 Nilesh Shah Replies:

It will be @ 15%. On and from A.Y 2006-2007 there is no category as a Dumper. It is only as machinery that it will depreciate.

Sincerely,

Nilesh Shah

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