TMI Blog2011 (7) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. - 311 of 2001 - - - Dated:- 6-7-2011 - Akil Kureshi and Sonia Gokani, JJ M.R. Bhatt, Sr. Adv., with Mauna M. Bhatt for the Appellant Saurabh N. Soparkar, Sr. Adv., with Swati Soparkar for the Respondent JUDGEMENT Akil Kureshi: 1. Revenue is in appeal against the judgment of the Tribunal dated 17.5.2001. While admitting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was used by the lessee in the business of running on hire and in that event to grant depreciation at the higher rate of 50% as claimed by the assessee. Observations and conclusions of the Tribunal in this regard may be noted thus:- "5. Having heard both the sides, we have carefully gone through the orders of authorities below as well as decisions cited during the course of hearing. In the profit and loss account, the assessee has credited assessment of Rs.66,700/- under the head truck (lease) rent income account and claimed depreciation at the rate of 50%. The Assessing officer allowed the depreciation at normal rate without verifying whether the truck was used by the lessee in business of running them on hire. We, therefore, set-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of Commissioner of Income Tax vs. Gupta Global Exim Pvt. Ltd. reported in (2008) 305 ITR 132 (SC) upheld the view of the Tribunal, denying higher rate of depreciation to the assessee, who was not involved in the business of hiring out the vehicle. 6. Counsel drew our attention to the decision of the Apex Court in the case of Commissioner of Income Tax vs. Gupta Global Exim Pvt. Ltd. (supra), wherein the Apex Court observed as under:- "12. What is relevant for consideration under item (2)(ii) of heading III of Appendix I to the Income-Tax Rules, 1962 is whether the assessee was in the business of hiring out his trucks in addition to his business of trading in timber. The order of assessment clearly indicates that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, was engaged in the business of leasing plant and machinery, motor cars, etc. to its clients. The assessee had claimed depreciation on motor vehicles at a higher rate of 50%, which was denied by the Assessing Officer on the ground that the vehicles were not run on hire by the assessee. The issue ultimately reached the Tribunal which confirmed the view of the Revenue authorities denying higher depreciation to the assessee on the terms that the assessee was not carrying on the business of hiring of the vehicle. Bench, referring to the decision of the Karnataka High Court in the case of Commissioner of Income Tax and another vs. BPL Sanyo Finance Private Ltd. reported in [2006] 287 ITR 69 and decision of the Bombay High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 10. We are convinced that the above mentioned decision squarely covers the present fact situation also. We are also of the opinion that the observations made by the Apex Court in the case of Commissioner of Income Tax vs. Gupta Global Exim Pvt. Ltd. (supra) noted hereinabove would also apply in the case on hand. 11. In the result, question is answered in favour of the Revenue. Decision of the Tribunal of remanding the issue to the Assessing Officer for fresh consideration, in the light of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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