TMI Blog2012 (9) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... se of scrutiny assessment detailed submissions were given as despite commercial vehicles have been leased out, higher rate of depreciation was justified. This is therefore, not a case where income chargeable to tax can be stated to have escaped assessment for the reason of assessee failing to disclose truly and fully all material facts - in favour of assessee. - Special Civil Application No. 12251 of 2002, Special Civil Application No. 489 of 2005 - - - Dated:- 3-9-2012 - Akil Kureshi And Harsha Devani, JJ. For Appellant : Mr M J Shah for MR J P Shah For Respondent : Mr Sudhir M Mehta, Adv JUDGEMENT Per : Akil Kureshi, J : 1. These petitions arise out of similar background involving the same assessee. They have been heard together and are disposed of by this common judgement. 2. Brief facts maybe noted as arising in Special Civil Application No.489/2005. 2.1) The petitioner assessee is a company registered under the Companies Act and is regularly assessed to tax. For the assessment year 1996-1997, the petitioner had filed its return of income on 30.11.1996. The petitioner had in that year as in the past claimed depreciation at the rate of 40% on the comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cost/Opening W.D.V. Rs. Rate of Dep. Depreciation Closing W.D.V. Rs Vehicles Commercial Addition during Asstt. Year 1995-96 8,5000,000 0.4 34000,000 51000,000 Addition during Asstt. Year 1996-97 eligible for pro-rata Depreciation 2222,540 0.2 444,508 1778,032 Vehicles Addition during Asstt. Year 1996-97 2225,222 0.2 445,044 1780,178 Addition during Asstt. Year 1996-97 eligible for pro-data Depreciation 824,932 0.1 82,493 742,439 We have purchased commercial vehicles and the said vehicles were given on lease. The lessee has used the said commercial vehicles for the business of running them on hire. We also draw your kind attention that, there is no requirement in Section 32 or in the rules there under that the owner of the commercial vehicles shall use the vehicle himself for the business of hire. We rely on following decisions- 1. Shriram Transport Finance Co. ltd. V/s. ACIT 63 ITR 336 2. Shriram Investments Ltd. V/s. AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at the rate of 40% on WDV/cost of Rs.8,54,00,000. As per Rule 5, the rate of depreciation on motor vehicle in the second column of the table in Appendix-I are as under : Block of Assets Depreciation allowance as per percentage of WDV III (1A) Motor car other than those used in a business of running them on hire acquired or put to use on or after the first day of April, 1990 20% (2) (ii) Motor buses, motor lorries and motor taxies used in a business of running them on hire. 40% 4. The assessee is a leasing company. The assessee company has used the motor vehicles for lease and not for hiring. The assessee company is, therefore, entitled for depreciation at the normal rate of 20% on motor vehicles(commercial) and not at the higher rate of 40% as claimed and allowed while finalizing the assessment. Excess depreciation on motor vehicles(commercial) has been allowed by Rs.1,70,00,000 while computing taxable income, which has escaped assessment to that extent. 5. On the basis of said facts on record, counsel for the petitioner vehemently contended that the notice for reopening which has been issued beyo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment, same was for the reason of assessee not disclosing truly and fully all material facts. This would be relevant because in the present case admittedly the notice of reopening has been issued beyond a period of four years from the end of relevant assessment year. 8. In this context, we may revisit the material on record. The assessee had lodged a claim of depreciation at the rate of 40% on the Written Down Value of commercial vehicles purchased earlier. In addition thereto the petitioner had also claimed part depreciation at higher rate of vehicles purchased in second half of the year and which were leased out to another company. In the scrutiny assessment, the Assessing Officer examined various claims of the petitioner. With respect to depreciation claimed, he raised a specific query and called upon the petitioner to justify the claim by giving details of vehicles on which depreciation at the rate of 40% was claimed. In reply to such question, the assessee made a detailed representation under communication dated 22.2.1999. The petitioner stated that company had purchased and leased commercial vehicles during financial years between 1.4.1994 to 31.3.1995 and 1.4.199 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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