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TMI Blog2011 (8) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... l was right in law and on facts in confirming the order passed by the Commissioner of Income-tax (Appeals) allowing the depreciation claim of the assessee on the vehi- cle registered in the name of persons other than the assessee ?" 2. In so far as question A is concerned, the issue is covered against the assessee and in favour of the Revenue by virtue of the judgment of this court in Tax Appeal No. 100 of 2000 dated April 1, 2011 (since reported in Bhagwati Appliance v. ITO [2011] 337 ITR 286 (Guj)). This view was followed in a subsequent judgment dated July 6, 2011, in Tax Appeal No. 311 of 2001 (since reported in Deputy CIT v. Pradip N. Desai (HUF) [2012] 341 ITR 277 (Guj)) in which the following observations were made (page 279) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Assessing Officer had treated Rs. 12,59,639 as part of total business income which is not determi- native of the above test, viz., whether the trucks were used in the transportation business as claimed by the assessee.' 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. Before adverting to the rival submissions, for ready reference, we reproduce the relevant entries for depreciation as under : Block of assets Depreciation allowance as percentage of written down value III. Machinery and plant (2)(ii) Motor buses, motor lorries and motor taxis used in a business of running the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its client. It is neither the case of the assessee nor is there anything on record to indicate that the assessee uses the vehi- cles 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, the 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 vehicles in the business of the assessee of transportation or the business of hire. The Tribunal was, therefore, justified in holding that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of the director was used for the purpose of business of the company, income derived is from leasing the vehicle was shown as income of the company and the entire fund for purchase of the vehicle had also gone from the coffers of the company. 5. Under similar circumstances, in the subsequent year, when the Revenue sought to raise such question, a Division Bench of this court by order dated July 28, 2008, passed in Tax Appeal No. 1273 of 2007 declined to entertain the question making following observations. "4. So far as question B is concerned, the Tribunal has observed in its order that the vehicles were actually owned by the company though they were registered in the names of the directors on behalf of the company a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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