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2018 (9) TMI 716 - CALCUTTA HIGH COURTRevision u/s 263 - Whether depreciation at the enhanced rate of 30% for a vehicle can be claimed by an assessee who does not run a business of hiring out the vehicle for consideration? - Held that:- A distinction ought to be made between the two parts to Section 263 - the first part which permits the Commissioner to enhance or modify the assessment and the second part which permits the Commissioner to cancel the assessment and direct a fresh assessment. There is an element of finality which is involved when the Commissioner exercises authority under the first part as indicated above. There is also an element of finality when the commissioner cancels the assessment, but there is no real prejudice to the assessee – other than the assessee suffering the process once again – in a fresh assessment being required to be undertaken. Since in this case the Appellate Tribunal looked into the documents that were furnished by the assessee in response to the show-cause notice issued under Section 263 and found, on facts, that the perceived bogus transactions were genuine, the order impugned does not call for any interference on such ground. The other ground pertains to the rate of depreciation that the assessee had claimed and the permissibility thereof. Appellate Tribunal took into consideration the fact that depreciation at the enhanced rate had been permitted in at least one subsequent assessment year. Further, it was the case of the assessee that the assessee may not have let out its vehicles to third parties, but the assessee used the vehicles for transporting the goods pertaining to the business of the assessee and such activity permitted the claim of enhanced depreciation. Decided against the revenue.
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