Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2006 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (7) TMI 125 - DELHI HIGH COURTDistinction between hire and lease of vehicles – depreciation - In respect of leased vehicles, the assessee claimed depreciation at 40 per cent, in terms of section 32 r.w.r. 5 of the Income-tax Rules and Appendix I to the Rules - AO allowed depreciation at 20 per cent, while holding that the assessee had given the vehicles on lease to third parties, which is not the same as running them on hire by the assessee. - whether the assessee has utilised the vehicles for its own use, and if not whether the assessee would be entitled to depreciation at 40 per cent. - There is no additional requirement on the assessee to show that the third parties had used those vehicles for hire. - it is clear that it is the end user of the specified asset which is relevant for determining the percentage of depreciation - Once it is accepted that the leasing out of the vehicles is one of the modes of doing business by the assessee and in fact the income derived from such leasing is treated as business income of the assessee, it would be clearly contradictory in terms to hold that the vehicles in question were not used wholly for the purpose of the assessee's business – higher rate of depreciation is allowed
|