9911796707
TMI Blog2011 (7) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... s per appendix-I appended to Rule 5 of the Income Tax Rules 1961, higher rate of depreciation is allowable only if the vehicles are used in business of running them on hire?" 2. Briefly stated the facts leading to filing of this appeal are as under:- 2.1 During the previous year, relevant to the assessment year, 1991-92, respondent assessee purchased one truck. The Truck was given on lease. In turn it was the case of the assessee that the truck was run on hire by the lessee. On the investment so made in purchase of truck, the assessee claimed higher rate of depreciation at the rate of 50% in terms of Clause (2)(ii) of Entry III of Appendix-I of the Income Tax Rules, 1962. The Assessing Officer, however, allowed normal rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was used by the lease in a business of running it on hire in that event Assessing Officer should allow the depreciation at a higher rate is at the rate of 50% as claimed by the assessee in the return of income." 3. Aggrieved by the said decision and the directions contained in the order of the Tribunal, Revenue is in appeal before us in the present Tax Appeal. 4. Counsel for the Revenue submitted that it is not in dispute that the assessee is not involved in the business of hiring the vehicle on rent and in that view of the matter, higher depreciation under Clause (2)(ii) of Entry-III of Appendix-I would not be available. He, therefore, contended that the Assessing Officer's decision to permit normal rate of depreciation was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to indicate that the assessee was in the business of hiring out motor lorries for running them to earn business income. The entire inference is drawn by the Commissioner of Income-Tax (Appeals) only on the footing that the Assessing Officer had treated Rs. 12,59,639 as part of total business income which is not determinative of the above test, viz., whether the trucks were used in the transportation business as claimed by the assessee." 7. On the other hand, counsel for the respondent submitted that the Tribunal's order requires no interference. Cogent reasons have been given for the conclusions. Tax Appeal may be dismissed. 8. Before adverting to the rival submissions, for ready reference, we reproduce relevant entries for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities below have recorded that 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 vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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