TMI Blog2006 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... er then motor vehicles used for hire or reward would not be covered under this proviso to section 32 of the Act, and such motor vehicles would be covered under entry (2)( ii ) of Item-3 of Part-A of Appendix-I to rule 5 of the Rules. This conclusion further leads to an interference that the Legislature has given benefit of higher depreciation to the assessees not engaged in the business of Motor Buses, Motor Lorries and Motor Taxies on hire and defining such light motor vehicles as commercial vehicles though intentionally excluding vehicles commercially exploited for yielding income from the definition of commercial vehicle further supports the case of the assessee. Therefore, nomenclature of commercial vehicle should not be so construed to deprive the assessee of higher depreciation when all the conditions specified in the Act and the Rules have been met by the assessee. We also hold that, till such car is used by the assessee for its business purpose the assessee would get the depreciation at the rate of 40 per cent as per the IIIrd proviso to section 32 of the Act. Thus, Ground Nos. 1 to 3 of the assessee stand accepted. In the result, the appeal filed by the assessee stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing on behalf of the assessee firstly narrated the factual matrix of the case and thereafter made legal arguments. The first argument raised by the assessee s counsel was that the words "commercial vehicle" was used only in the Income-tax Act,1961 and Income-tax Rules, 1962, hence, the meaning assigned to the same in the Income-tax Act was relevant and only to be considered. It was also pointed out that the words "commercial vehicle" was not defined in the Motor Vehicles Act, 1988, nor in any registration certificate issued by the RTO these words were used, hence the report of the RTO to this effect was not relevant and consequently reliance placed by the revenue authorities thereon was also misplaced. The ld. counsel also stated that in the report of the RTO no such specific certificate was given though the same was not available with him at that time. The ld. counsel then referred to the relevant clause of Appendix-I and also note thereto defining the term "commercial vehicle". The ld. counsel also referred to the Explanation to third proviso of section 32 of the Act. The ld. counsel also referred to the definitions of various terms used in Appendix-I and section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " Provided also that where an asset being commercial vehicle is acquired by the assessee on or after the 1st day of October, 1998 but before the 1st day of April, 1999 and is put to use before the 1st day of April, 1999 for the purposes of business of profession, the deduction in respect of such asset shall be allowed on such percentage on the written down value therefore, as may be prescribed. Explanation. For the purposes of this proviso ( a )the expression commercial vehicle means heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle and medium passenger motor vehicle , but does not include maxi-cab , motor-cab , tractor and road-roller . ( b )the expression heavy goods vehicle , heavy passenger motor vehicle . Light motor vehicle , medium goods vehicle , medium passenger motor vehicle , maxi-cab , motor-cab , tractor and road-roller shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988)." 2. Relevant provisions of Appendix-I and note thereto. [ iia Commercial vehicle which is acquired by the assessee on or after the 1st day of October, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he written down value thereof as may be prescribed. As per the provisions of section 43(6)( c )( ii ). W.D.V. means the written down value of that block of asset as increased by the actual cost of any asset falling within that block acquired during the previous year and as reduced by the monies payable together with scrap value if any in respect of the assets falling within that block which are sold or discarded or demolished or destroyed during that previous year. However, for our purpose the material provision is that the actual cost of the asset so acquired would fall within that block in the year of acquisition and thereafter the W.D.V., i.e., the actual cost less depreciation allowed thereon would be material for computing depreciation in subsequent years. Thus the cost of car is to be treated as W.D.V. for computing depreciation thereon at the specified percentage. Further the Explanation to this proviso defines that the expression "commercial vehicle" would mean ... "light motor vehicle" and the "light motor vehicle" as defined in the Motor Vehicles Act, 1988, means any transport vehicle or omni bus, the gross physical weight of either of which or a motor car or a Tract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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