Deputy Commissioner of Vs. Foremost Dairies Ltd. - Court Judgment

Excerpt:

.....cwt(a)-vii, bombay and relates to the assessment year 1988-89.2. the solitary ground taken in this appeal projects the following grievance : on the facts and in the circumstances of the case and in law the learned cwt(a) erred in holding that value of operational vehicles like jeeps should not be included in net wealth as these cannot be termed as motor cars.3. shri keshav prasad, ld. departmental representative appeared before us and placed his reliance on the ratio laid down by the madras high court in the case of crompton engg. co. (madras) ltd. v. cit [1992] 193 itr 483.4. smt. arti vissanji, ld. counsel for the assessee appeared before us and submitted that jeep cannot be construed to be motor car. our attention was invited on the meaning of the word 'jeep' given in webster's encyclopaedia, wherein it is defined as a light motor utility truck designed in world war ii. smt. vissanji, also referred to its meaning given in concise oxford dictionary as a small utility motor vehicle. it was argued that a motor car, on the other hand, as commonly understood is a vehicle primarily used for conveyance of passengers.according to ld. counsel, the assessee has used the jeeps as.....

Judgment:

1. This appeal by the revenue is directed against the order of the CWT(A)-VII, Bombay and relates to the assessment year 1988-89.

2. The solitary ground taken in this appeal projects the following grievance : On the facts and in the circumstances of the case and in law the learned CWT(A) erred in holding that value of operational vehicles like jeeps should not be included in net wealth as these cannot be termed as motor cars.

3. Shri Keshav Prasad, ld. Departmental Representative appeared before us and placed his reliance on the ratio laid down by the Madras High Court in the case of Crompton Engg. Co. (Madras) Ltd. v. CIT [1992] 193 ITR 483.

4. Smt. Arti Vissanji, ld. counsel for the assessee appeared before us and submitted that jeep cannot be construed to be motor car. Our attention was invited on the meaning of the word 'jeep' given in Webster's Encyclopaedia, wherein it is defined as a light motor utility truck designed in World War II. Smt. Vissanji, also referred to its meaning given in Concise Oxford Dictionary as a small utility motor vehicle. It was argued that a motor car, on the other hand, as commonly understood is a vehicle primarily used for conveyance of passengers.

According to ld. counsel, the assessee has used the jeeps as utility vehicles. It was further contended that the provisions of Section 40 of the Finance Act, 1985, being a charging section, ought to be construed strictly. The meaning of the term 'motor car" cannot be stretched so as to include within its ambit, "jeeps" also. A "jeeps" cannot be classified as a "motor car". To support this contention, Smt. Vissanji, placed her reliance on the decision of the Tribunal, Delhi Bench in Kudos International v. IAC Taxmann's 1987 SOT at p. 1.137 where the Tribunal relying upon the judgment of the Allahabad High Court in Gopal Enterprises v. CST 1979 UPTC 1129 held while construing the provisions of Section 37(3A) that expenditure incurred on "jeeps" cannot be disallowed.

5. It was further submitted that depreciation schedule old Appendix I of the Income-tax Act, also draws a distinction between various types of vehicles. Part III-C entry 7 refers to motor cars, motor cycles, scooters and other mopeds. Part III-D entry 9 refers to motor buses and motor travel. In view of the fact that a clear distinction has been drawn wherever intended between various categories of vehicles, it would follow that the expression "motor car" must be confined to "motor cars" alone. Had the Legislature intended to include 'jeeps' in the assets, chargeable to wealth-tax, the same would have been expressly included.

6. We have heard the rival submissions in the light of material placed before us and precedents relied upon. The assessee carries on dairy business. On the relevant valuation date, it owned two jeeps. Section 40 of the Finance Act, 1985, deems to charge to wealth-tax, assets specified in Sub-section (3) thereof. Clause (vii) of Section 40(3) refers to motor cars. The Assessing Officer included the value of two jeeps in the net wealth, on the ground that jeeps are motor cars. We have considered the meaning of the term 'motor car'. From a layman's point of view the term refers to an automobile which is primarily used for conveyance of passengers. The use of the jeep is also akin to the use of the motor car. This is a rough and tough vehicle. Originally it was designed to meet the military requirement during the time of Second World War. Later, it was found to be useful on rough roads. Having regard to its utility, it is now used in the same manner as of a motor car. It is pertinent to note that in Stroud's Judicial Dictionary 4th Edition at page 1712 the term 'motor' is defined vide entry 3 as under : A petrol-driven tractor was a motor car within the meaning of Article II(3) of the Motor Cars (Use and Construction) Order, 1904 : See Dennis v. Leonard, 141 LT 944.

Vide entry 10 on page 1713, 'motor car' is denned as a 'mechanically propelled vehicle, not being a motor cycle or an invalid carriage, which is constructed itself to carry a load or passengers...' etc. The Hon'ble Madras High Court in the case of Crompton Engg. Co. (Madras) Ltd. (supra) in a very clear and unequivocal terms, laid down that jeep is a motor car. We, respectfully following the precedent, decide this issue in favour of the revenue and against the assessee.