Full Judgment Text
$~1 to 4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
rd
% Date of Decision : 3 September, 2012.
+ ITA 487/2012, 488/2012, 489/2012 and 490/2012
CIT ..... Appellant
Through: Ms.Rashmi Chopra, Advocate
versus
SRC AVIATION PVT LTD ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.V.EASWAR
S. RAVINDRA BHAT,J: (OPEN COURT)
CM No.14792/2012 in ITA No.487/2012
CM No.14794/2012 in ITA No.488/2012
CM No.14797/2012 in ITA No.490/2012
Exemption allowed, subject to all just exceptions.
The applications stand disposed of.
CM No.14793/2012 in ITA No.487/2012
CM No.14795/2012 in ITA No.488/2012
CM No.14796/2012 in ITA No.489/2012
CM No.14798/2012 in ITA No.490/2012
For the reasons stated in the application, the delay in filing the appeals is
condoned.
The applications stand disposed of.
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012
1. The appellant claims to be aggrieved by an order dated 26.8.2011 in appeal
Nos. 2215/Del/2010, 1557/Del/2010, 1558/Del/2010 and 3824/Del/2010. Three
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 1 of 9
appeals had been preferred by the SRC Aviation Private Limited and one appeal by
CDIT.
2. The following questions are sought to be urged, i.e.,
1. Whether the deletion of disallowance under Section 14A was
justified?
2. Whether the depreciation deductible under the head “ Plant
& Machinery ”, particularly the relevant entry “Aeroplane-
Aeroengines” prescribing 40% depreciation was applicable and
justifiably applied by the Tribunal and the
Commissioner(Appeals) in the facts of this case?
3. Whether in the facts of the present case the cash payment
claimed as deductible as expenditure incurred, was correctly
allowed by application of Rule 6DD(k) of Income Tax Rules?
3. The assessee is engaged in the business of airchartering/air taxi services. The
Commissioner of Income Tax, invoking his powers under Section 263 of Income Tax
Act, 1961 (Act, for short) held that depreciation granted to the extent of 40% on
account of its acquiring „Beechcraft Super King Air B-200C‟ was wrongly granted
and the correct depreciation ought to have been 20%. In respect of this and the other
items such as the disallowance under Section 14A (expenditure claimed) as well as the
amount under Section 40A(3), the assessee felt aggrieved and approached the Income
Tax Appellate Tribunal („Tribunal‟, for short).
4. So far as the first question, i.e., applicability of Section 14A is concerned, this
Court is of the opinion that the law having been declared in Maxopp Investment
Limited v. CIT ; 2012 (247)CTR 162 (Del), the matter has to be remitted. The
Tribunal‟s decision to that extent is upheld. The Assessing Officer shall take into
consideration the direction in Maxopp (supra) while carrying out the directions of the
Tribunal.
5. So far as the second question regarding the correct rate applicable for
depreciation of Aircraft is concerned, the counsel for the revenue urged that till 1987-
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 2 of 9
88 the relevant entry read as follows:
“ D(1) Aeroplanes – Aircraft, aerial photographic
apparatus (NESA) - 30%
E(1) Aeroplanes-Aero engines (NESA)”. - 40%
However, with effect from 1.4.1988, the relevant
entry reads as follows:
3(i):“Aeroplane-Aeroengines” - 40%
6. It was urged that the deletion of the expression “aircraft” is a significant
change which entitled the assessee in this case to claim larger depreciation of 40% for
the acquisition of its „Beechcraft Super King Air B-200C‟. Learned counsel also
placed reliance on the Aircraft Act, 1934 and a decision of the Bombay High Court in
CIT Vs. Kirlosker Oil Engines (1998) 230 ITR 88 (Bom).
7. The relevant discussion of the Tribunal on this score is as follows:
“11. We have carefully considered the rival submissions in
the light of the material placed before us. Ld.CIT while
invoking the power u/S 263 has mainly relied upon the
earlier description of depreciation rate which was applicable
for assessment years 1984-85 to 1987-88 in which the
aeroplane as aircraft and aeroplane as aero-engines were
treated differently for the purpose of computing depreciation.
From such description of different rates of depreciation, it is
the case of ld. CIT that aircraft owned by the assessee cannot
be termed to be aeroplane which only is entitled for higher
depreciation under the rates of depreciation applicable for
the years under consideration as described in Appendix-I.
For this purpose, ld.CIT has also relied upon the decision of
Hon‟ble Bombay High Court in the case of CIT vs. Kirlosker
Oil Engines (supra). In our opinion, such reliance by the CIT
on the decision of Hon‟ble Bombay High Court is misplaced
as in that case the assessee was owner of the aircraft and it
claimed depreciation @ 40%. The Appendix-I as applicable
for the relevant assessment years in the case of that assessee
had described depreciation in respect of aeroplanes under
Item D(1) and E(1) which read as under:-
“ D(1) Aeroplanes – Aircraft, aerial
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 3 of 9
photographic apparatus (NESA)
E(1) Aeroplanes – Aero engines
(NESA).”
12. Under D(1) the rate of depreciation was described
as 30% and under E(1) it was described as 40%. Referring
to the above mentioned rates, it was observed by the Hon‟ble
Bombay High Court that the aforementioned two items are
quite different and distinct. That both the items are given
under the heading „aeroplanes.‟ Item D(1) described the
rates of depreciation on „aircraft and aerial photographic
apparatus‟, whereas the Item E(1) describe the rate of
depreciation of aero engines. As the assessee was admittedly
claiming depreciation on aircraft, it was held that it will fall
under item D(1) which have specific one and, therefore, the
assessee will be entitled for depreciation @ 30% and the
depreciation @ 40% is applicable only on aero engines and
the aero engines is not covered under aircrafts. But the
position under the Appendix-I which is applicable in the case
of the assessee is different. In the present case, there is no
such classification under the head „aeroplanes‟as it was
applicable in the case of the CIT vs. Kirlosker Oil Engines
(supra). During the year under consideration, only one
description is there which is in item 3 which read as under:-
“Aeroplane-aeroengines”
13. No other separate head has been given for
claiming of depreciation under the head „aeroplanes‟which
was distinctively described in the old Appendix as applicable
in the case of the CIT vs. Kirlosker Oil Engines (supra).”
8. The Tribunal then discussed the different meanings of the expression „aircraft
and air-plane‟ in the ensuing part of its order.
“16. It is so, then the description of depreciation rate
@ 40% under the head „aeroplane-aero-engines‟ cannot be
understood to be depreciation rate prescribed only for aero-
engines as that will never fall within the category of
„aeroplane‟ as aero –engines is only a power unit of an
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 4 of 9
aircraft. Therefore, no analogy can be drawn from the old
Appendix to hold that aircraft cannot be granted depreciation
under the head „aeroplane‟as the term „aeroplane‟does not
describe the aircraft therein. The definition of „aricraft‟has
already been given in the above part of this order. Apart
from that, Aircraft Act, 1934 describe the „aircraft‟ as
under:-
“Aircraft”means any machine which
can derive support in the atmosphere
from reactions of the air (other than
reactions of the air against the
earth‟s surface) and includes
balloons, whether fixed or free,
airships, kites, gliders and flying
machines.”
16.1. Further, Encyclopedia Britannica (Macropaedia) Vol. I
describe the „aircraft‟ in broad two categories which are
defined as under:-
“ All aircraft fall into two
general categories – lighter–than– air
or hearvier-than-air. Several distinct
types are recognized within each
group. Each may perform a variety
of missions calling for modifications
for special usage.
Lighter-than-air craft rise and
float because they displace a volume
of air the weight of which is equal to
or greater than the total weight of the
aircraft. Such aircraft include
balloons and airships.
Heavier-than-air craft derive
their flight capability (lift) form the
dynamic reaction of air flowing
around suitably shaped surfaces
(wings or airfoils). Such craft include
gliders and sailplanes, conventional
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 5 of 9
airplanes, short takeoff and landing
(STOL) airplanes, and vertical takeoff
and landing (VTOL) aircraft.”
16.2 The international Civil Aviation Organisation (ICAO)
in its Aviation Glossary Terms & Definitions has defined
„Aircraft‟ and “Aeroplane‟ as under:-
“Aircraft – An aircraft is any
machine that can derive support in
the atmosphere from the reactions of
the air other than the reactions of the
air against the earth‟s surface (ICAO
Annex.1, Annex 6 Part I).
Aeroplane – A power driven heavier
than air aircraft, deriving its lift in
flight chiefly from aerodynamic
reactions on surfaces which remain
fixed under given conditions of flight
(ICAO Annex I, Annex 6)”
17. A combined reading of all these definitions will be
that aeroplane in comparison to aircraft has a fixed wings
and is powered by propellers or jets. Though both the
definitions have been given by the ld. CIT in his order, but he
has ignored the submission of the assessee that aircraft
owned by it has fixed wings and is powered by propellers or
jets on the ground that it should be heavier than the aircraft.
We find no justification in such observations of ld. CIT that
the aircraft of the assessee should not be described as
„aeroplane‟simply for the reason that „aeroplane‟is a
machine much bigger, heavier and powerful than an aircraft
which travels in the air more than an aircraft. Though
technical details have not been furnished before us, but, it is
clear from the picture submitted to us that the aircraft owned
by the assessee has fixed wings and has the characteristics of
the aeroplane though it may be of a smaller capacity which is
able to fly only nine passengers on board. But, for that
reason the aircraft owned by the assessee cannot be thrown
out of the category of „aeroplane‟and the aircraft owned by
the assessee cannot be considered only as „Plant and
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 6 of 9
Manchinery‟which is a term distinct to such type of aircraft.
18. Further, it has been demonstrated by the learned
AR of the assessee that in many cases the department is
considering such aircraft as „aeroplane‟and granting
depreciation to the respective assesses @ 40% and such
contention of the assessee is based on the information given
by the department itself. The department has not been able to
bring on record any of the cases wherein such aircraft has
been considered by them eligible for depreciation under the
head „Machinery and Plant.‟ Not going into the controversy
whether or not the issue regarding the claim of depreciation
was deliberated during the course of original assessment
proceedings, we are of the opinion that the Assessing Officer
had granted the depreciation to the assessee @ 40-% in
accordance with the provisions of the Rule, therefore, such
grant of depreciation cannot be considered to be a claim not
supported by law, as the department cannot straightaway
show that such claim of depreciation was not in accordance
with the law and, in such, circumstances, the powers u/s 263
could not be invoked.”
9. This Court is conscious of the fact that the generic term „aircraft‟ is broader
and there can be no doubt that it encompasses the expression aeroplane. However,
this Court is not called upon to interpret the term “aircraft” in the present appeal. The
question is whether the „Beechcraft Super King Air B-200C‟ purchased by the
assessee fell within the description of aeroplane. Ld. counsel for the revenue sought to
urge that the “airplane –aeroengine” included only aero engine which can be used for
airplane, covered by the Entry III(3)(i) in the head “Plant & Machinery”. We see no
warrant for such a restrictive interpretation. Even with regard to the history of the
entry all that can be inferred is that “aircraft” is a broader description which includes
all manner of craft or means of transport aided by flight, (such as balloons, planes etc.)
within the Depreciation Rule. For the reasons best known, the rule making authority
confined and narrowed definition to “aeroplane”. This conclusion is also supported by
the fact that other entries in Rule III(3) of the depreciation table extend to entire
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 7 of 9
vehicles such as commercially pliable buses, cars etc. They do not confine the scope
of depreciation only to parts of such vehicles.
10. In view of the above discussion, this Court is satisfied that the Tribunal‟s
judgment does not disclose any error as regards interpretation of Entry III(3)(i) of the
Depreciation Rules. Its upholding the depreciation allowable in the present case to the
tune of 40% cannot be termed as unjustified or unwarranted.
11. On the third issue, the Tribunal concluded that the charges payable and
claimed by the assessee were in respect of the route navigational and parking charges
for an aircraft required by Airport Authority of India. The relevant procedure was
outlined through a letter dated 22.12.2009 written by the Airport Authority of India
which stated that as per Rules of RNFC (Route Navigation Facilities Charges) and
TNLC (Traffic) (Terminal Navigation landing Charges) charges with AAI and DIAL
are to be paid in cash before the departure of a non scheduled flight. Therefore, the
revenue had urged that this payment, though supported by the facts of the case do not
fall within the Rule 6DD(k) which allows expenditure in cash only when it is made by
a person to an agent who is required to make payment in cash .
12. The revenue stressed upon the fact that cash was not paid to the agent and
therefore Rule 6DD(K) was inapplicable. There can be no dispute that the Airport
Authority of India is a statutory body entitled to claim its dues and even entitled to
frame Rules and Regulations under the parent Act (see judgment of the SC in
International Airports Vs. M/s Grand Slam International (1995) SCC (3) 151. In
such an eventuality, once the authority required that cash had to be paid as a condition
for flight clearance required by the assessee, it had really no choice in the matter. The
interpretation urged by the revenue is far removed from reality. Furthermore, this
Court is fortified in holding that such expenditure in cash is deductible by reference to
Rule 6DD(b) which states that when payment is made to the government, as per the
Government of India Rules, it is deductible.
13. For the above reasons, this Court finds no reason to interfere with the orders of
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 8 of 9
the Tribunal in all the three aspects. The appeals are, accordingly, dismissed.
S. RAVINDRA BHAT , J.
R.V.EASWAR, J.
SEPTEMBER 03, 2012
sv
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 9 of 9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
rd
% Date of Decision : 3 September, 2012.
+ ITA 487/2012, 488/2012, 489/2012 and 490/2012
CIT ..... Appellant
Through: Ms.Rashmi Chopra, Advocate
versus
SRC AVIATION PVT LTD ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.V.EASWAR
S. RAVINDRA BHAT,J: (OPEN COURT)
CM No.14792/2012 in ITA No.487/2012
CM No.14794/2012 in ITA No.488/2012
CM No.14797/2012 in ITA No.490/2012
Exemption allowed, subject to all just exceptions.
The applications stand disposed of.
CM No.14793/2012 in ITA No.487/2012
CM No.14795/2012 in ITA No.488/2012
CM No.14796/2012 in ITA No.489/2012
CM No.14798/2012 in ITA No.490/2012
For the reasons stated in the application, the delay in filing the appeals is
condoned.
The applications stand disposed of.
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012
1. The appellant claims to be aggrieved by an order dated 26.8.2011 in appeal
Nos. 2215/Del/2010, 1557/Del/2010, 1558/Del/2010 and 3824/Del/2010. Three
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 1 of 9
appeals had been preferred by the SRC Aviation Private Limited and one appeal by
CDIT.
2. The following questions are sought to be urged, i.e.,
1. Whether the deletion of disallowance under Section 14A was
justified?
2. Whether the depreciation deductible under the head “ Plant
& Machinery ”, particularly the relevant entry “Aeroplane-
Aeroengines” prescribing 40% depreciation was applicable and
justifiably applied by the Tribunal and the
Commissioner(Appeals) in the facts of this case?
3. Whether in the facts of the present case the cash payment
claimed as deductible as expenditure incurred, was correctly
allowed by application of Rule 6DD(k) of Income Tax Rules?
3. The assessee is engaged in the business of airchartering/air taxi services. The
Commissioner of Income Tax, invoking his powers under Section 263 of Income Tax
Act, 1961 (Act, for short) held that depreciation granted to the extent of 40% on
account of its acquiring „Beechcraft Super King Air B-200C‟ was wrongly granted
and the correct depreciation ought to have been 20%. In respect of this and the other
items such as the disallowance under Section 14A (expenditure claimed) as well as the
amount under Section 40A(3), the assessee felt aggrieved and approached the Income
Tax Appellate Tribunal („Tribunal‟, for short).
4. So far as the first question, i.e., applicability of Section 14A is concerned, this
Court is of the opinion that the law having been declared in Maxopp Investment
Limited v. CIT ; 2012 (247)CTR 162 (Del), the matter has to be remitted. The
Tribunal‟s decision to that extent is upheld. The Assessing Officer shall take into
consideration the direction in Maxopp (supra) while carrying out the directions of the
Tribunal.
5. So far as the second question regarding the correct rate applicable for
depreciation of Aircraft is concerned, the counsel for the revenue urged that till 1987-
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 2 of 9
88 the relevant entry read as follows:
“ D(1) Aeroplanes – Aircraft, aerial photographic
apparatus (NESA) - 30%
E(1) Aeroplanes-Aero engines (NESA)”. - 40%
However, with effect from 1.4.1988, the relevant
entry reads as follows:
3(i):“Aeroplane-Aeroengines” - 40%
6. It was urged that the deletion of the expression “aircraft” is a significant
change which entitled the assessee in this case to claim larger depreciation of 40% for
the acquisition of its „Beechcraft Super King Air B-200C‟. Learned counsel also
placed reliance on the Aircraft Act, 1934 and a decision of the Bombay High Court in
CIT Vs. Kirlosker Oil Engines (1998) 230 ITR 88 (Bom).
7. The relevant discussion of the Tribunal on this score is as follows:
“11. We have carefully considered the rival submissions in
the light of the material placed before us. Ld.CIT while
invoking the power u/S 263 has mainly relied upon the
earlier description of depreciation rate which was applicable
for assessment years 1984-85 to 1987-88 in which the
aeroplane as aircraft and aeroplane as aero-engines were
treated differently for the purpose of computing depreciation.
From such description of different rates of depreciation, it is
the case of ld. CIT that aircraft owned by the assessee cannot
be termed to be aeroplane which only is entitled for higher
depreciation under the rates of depreciation applicable for
the years under consideration as described in Appendix-I.
For this purpose, ld.CIT has also relied upon the decision of
Hon‟ble Bombay High Court in the case of CIT vs. Kirlosker
Oil Engines (supra). In our opinion, such reliance by the CIT
on the decision of Hon‟ble Bombay High Court is misplaced
as in that case the assessee was owner of the aircraft and it
claimed depreciation @ 40%. The Appendix-I as applicable
for the relevant assessment years in the case of that assessee
had described depreciation in respect of aeroplanes under
Item D(1) and E(1) which read as under:-
“ D(1) Aeroplanes – Aircraft, aerial
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 3 of 9
photographic apparatus (NESA)
E(1) Aeroplanes – Aero engines
(NESA).”
12. Under D(1) the rate of depreciation was described
as 30% and under E(1) it was described as 40%. Referring
to the above mentioned rates, it was observed by the Hon‟ble
Bombay High Court that the aforementioned two items are
quite different and distinct. That both the items are given
under the heading „aeroplanes.‟ Item D(1) described the
rates of depreciation on „aircraft and aerial photographic
apparatus‟, whereas the Item E(1) describe the rate of
depreciation of aero engines. As the assessee was admittedly
claiming depreciation on aircraft, it was held that it will fall
under item D(1) which have specific one and, therefore, the
assessee will be entitled for depreciation @ 30% and the
depreciation @ 40% is applicable only on aero engines and
the aero engines is not covered under aircrafts. But the
position under the Appendix-I which is applicable in the case
of the assessee is different. In the present case, there is no
such classification under the head „aeroplanes‟as it was
applicable in the case of the CIT vs. Kirlosker Oil Engines
(supra). During the year under consideration, only one
description is there which is in item 3 which read as under:-
“Aeroplane-aeroengines”
13. No other separate head has been given for
claiming of depreciation under the head „aeroplanes‟which
was distinctively described in the old Appendix as applicable
in the case of the CIT vs. Kirlosker Oil Engines (supra).”
8. The Tribunal then discussed the different meanings of the expression „aircraft
and air-plane‟ in the ensuing part of its order.
“16. It is so, then the description of depreciation rate
@ 40% under the head „aeroplane-aero-engines‟ cannot be
understood to be depreciation rate prescribed only for aero-
engines as that will never fall within the category of
„aeroplane‟ as aero –engines is only a power unit of an
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 4 of 9
aircraft. Therefore, no analogy can be drawn from the old
Appendix to hold that aircraft cannot be granted depreciation
under the head „aeroplane‟as the term „aeroplane‟does not
describe the aircraft therein. The definition of „aricraft‟has
already been given in the above part of this order. Apart
from that, Aircraft Act, 1934 describe the „aircraft‟ as
under:-
“Aircraft”means any machine which
can derive support in the atmosphere
from reactions of the air (other than
reactions of the air against the
earth‟s surface) and includes
balloons, whether fixed or free,
airships, kites, gliders and flying
machines.”
16.1. Further, Encyclopedia Britannica (Macropaedia) Vol. I
describe the „aircraft‟ in broad two categories which are
defined as under:-
“ All aircraft fall into two
general categories – lighter–than– air
or hearvier-than-air. Several distinct
types are recognized within each
group. Each may perform a variety
of missions calling for modifications
for special usage.
Lighter-than-air craft rise and
float because they displace a volume
of air the weight of which is equal to
or greater than the total weight of the
aircraft. Such aircraft include
balloons and airships.
Heavier-than-air craft derive
their flight capability (lift) form the
dynamic reaction of air flowing
around suitably shaped surfaces
(wings or airfoils). Such craft include
gliders and sailplanes, conventional
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 5 of 9
airplanes, short takeoff and landing
(STOL) airplanes, and vertical takeoff
and landing (VTOL) aircraft.”
16.2 The international Civil Aviation Organisation (ICAO)
in its Aviation Glossary Terms & Definitions has defined
„Aircraft‟ and “Aeroplane‟ as under:-
“Aircraft – An aircraft is any
machine that can derive support in
the atmosphere from the reactions of
the air other than the reactions of the
air against the earth‟s surface (ICAO
Annex.1, Annex 6 Part I).
Aeroplane – A power driven heavier
than air aircraft, deriving its lift in
flight chiefly from aerodynamic
reactions on surfaces which remain
fixed under given conditions of flight
(ICAO Annex I, Annex 6)”
17. A combined reading of all these definitions will be
that aeroplane in comparison to aircraft has a fixed wings
and is powered by propellers or jets. Though both the
definitions have been given by the ld. CIT in his order, but he
has ignored the submission of the assessee that aircraft
owned by it has fixed wings and is powered by propellers or
jets on the ground that it should be heavier than the aircraft.
We find no justification in such observations of ld. CIT that
the aircraft of the assessee should not be described as
„aeroplane‟simply for the reason that „aeroplane‟is a
machine much bigger, heavier and powerful than an aircraft
which travels in the air more than an aircraft. Though
technical details have not been furnished before us, but, it is
clear from the picture submitted to us that the aircraft owned
by the assessee has fixed wings and has the characteristics of
the aeroplane though it may be of a smaller capacity which is
able to fly only nine passengers on board. But, for that
reason the aircraft owned by the assessee cannot be thrown
out of the category of „aeroplane‟and the aircraft owned by
the assessee cannot be considered only as „Plant and
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 6 of 9
Manchinery‟which is a term distinct to such type of aircraft.
18. Further, it has been demonstrated by the learned
AR of the assessee that in many cases the department is
considering such aircraft as „aeroplane‟and granting
depreciation to the respective assesses @ 40% and such
contention of the assessee is based on the information given
by the department itself. The department has not been able to
bring on record any of the cases wherein such aircraft has
been considered by them eligible for depreciation under the
head „Machinery and Plant.‟ Not going into the controversy
whether or not the issue regarding the claim of depreciation
was deliberated during the course of original assessment
proceedings, we are of the opinion that the Assessing Officer
had granted the depreciation to the assessee @ 40-% in
accordance with the provisions of the Rule, therefore, such
grant of depreciation cannot be considered to be a claim not
supported by law, as the department cannot straightaway
show that such claim of depreciation was not in accordance
with the law and, in such, circumstances, the powers u/s 263
could not be invoked.”
9. This Court is conscious of the fact that the generic term „aircraft‟ is broader
and there can be no doubt that it encompasses the expression aeroplane. However,
this Court is not called upon to interpret the term “aircraft” in the present appeal. The
question is whether the „Beechcraft Super King Air B-200C‟ purchased by the
assessee fell within the description of aeroplane. Ld. counsel for the revenue sought to
urge that the “airplane –aeroengine” included only aero engine which can be used for
airplane, covered by the Entry III(3)(i) in the head “Plant & Machinery”. We see no
warrant for such a restrictive interpretation. Even with regard to the history of the
entry all that can be inferred is that “aircraft” is a broader description which includes
all manner of craft or means of transport aided by flight, (such as balloons, planes etc.)
within the Depreciation Rule. For the reasons best known, the rule making authority
confined and narrowed definition to “aeroplane”. This conclusion is also supported by
the fact that other entries in Rule III(3) of the depreciation table extend to entire
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 7 of 9
vehicles such as commercially pliable buses, cars etc. They do not confine the scope
of depreciation only to parts of such vehicles.
10. In view of the above discussion, this Court is satisfied that the Tribunal‟s
judgment does not disclose any error as regards interpretation of Entry III(3)(i) of the
Depreciation Rules. Its upholding the depreciation allowable in the present case to the
tune of 40% cannot be termed as unjustified or unwarranted.
11. On the third issue, the Tribunal concluded that the charges payable and
claimed by the assessee were in respect of the route navigational and parking charges
for an aircraft required by Airport Authority of India. The relevant procedure was
outlined through a letter dated 22.12.2009 written by the Airport Authority of India
which stated that as per Rules of RNFC (Route Navigation Facilities Charges) and
TNLC (Traffic) (Terminal Navigation landing Charges) charges with AAI and DIAL
are to be paid in cash before the departure of a non scheduled flight. Therefore, the
revenue had urged that this payment, though supported by the facts of the case do not
fall within the Rule 6DD(k) which allows expenditure in cash only when it is made by
a person to an agent who is required to make payment in cash .
12. The revenue stressed upon the fact that cash was not paid to the agent and
therefore Rule 6DD(K) was inapplicable. There can be no dispute that the Airport
Authority of India is a statutory body entitled to claim its dues and even entitled to
frame Rules and Regulations under the parent Act (see judgment of the SC in
International Airports Vs. M/s Grand Slam International (1995) SCC (3) 151. In
such an eventuality, once the authority required that cash had to be paid as a condition
for flight clearance required by the assessee, it had really no choice in the matter. The
interpretation urged by the revenue is far removed from reality. Furthermore, this
Court is fortified in holding that such expenditure in cash is deductible by reference to
Rule 6DD(b) which states that when payment is made to the government, as per the
Government of India Rules, it is deductible.
13. For the above reasons, this Court finds no reason to interfere with the orders of
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 8 of 9
the Tribunal in all the three aspects. The appeals are, accordingly, dismissed.
S. RAVINDRA BHAT , J.
R.V.EASWAR, J.
SEPTEMBER 03, 2012
sv
ITA Nos.487/2012, 488/2012, 489/2012 and 490/2012 Page 9 of 9