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2011 (4) TMI 40 - HC - Income TaxDepreciation allowance - Higher rate of depreciation - under Entry No. III(2)(ii) of Appendix-I - The assessee company is a leasing company which is engaged in leasing of plant and machinery, motor cars, etc. to its client - It is neither the case of the assessee nor is there anything on record to indicate that the assessee uses the vehicles in question in its business of transportation or that the assessee is engaged in the business of hire - In the circumstances, the basic requirement for being entitled to depreciation at the higher rate of 50 per cent under Entry No. III(2)(ii) of Appendix-I to the Rules is not satisfied by the appellant - In other words, appellant does not pass the test for the applicability of Entry No. III(2)(ii) of Appendix-I appended to the Rules, viz., the user of the vehicles in the business of the assessee of transportation or the business of hire - The Tribunal was, therefore, justified in holding that the appellant is entitled to depreciation at the rate of 33.33 per cent and not at the rate of 50 per cent as claimed by it. Hence the question is answered in the affirmative, that is, in favour of the revenue and against the appellant-assessee - The Income-tax Appellate Tribunal was right in law, in holding that the appellant was not entitled to depreciation allowance under Entry No. III(2)(ii) of Appendix-I of the Income-tax Rules, 1962, in respect of vehicles given on lease - The appeals are accordingly dismissed with no order as to costs.
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