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2015 (7) TMI 809 - KERALA HIGH COURT

2015 (7) TMI 809 - KERALA HIGH COURT - TMI - Depreciation allowance at the rate of 30% for the vehicles given on hire denied - Assessing authority limited the depreciation allowance to 15% in respect of the petitioner, only because of the TDS certificate in which the nature of payment was shown as payment to contractor and not as hire charges - Held that:- Merely on the basis of the TDS certificate furnished by M/s KSE Ltd. and the hire charges received per metric tonne, the claim of petitioner .....

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and those trucks cannot be treated as 'motor vehicles other than those used in the business of running them on hire' so as to limit the depreciation allowance to 15%. Thus it is declared that the petitioner will get the benefit of depreciation allowance at the rate of 30% . - Decided in favour of assessee. - WP (C). No. 15013 of 2012 (B) - Dated:- 25-6-2015 - P. V. Asha,J. For the Petitioner : Sri P Sreekumar, Sri P S Sidhan And Sri V K Rajanandan For the Respondents : Sri Jose Joseph, SC JUDGM .....

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e at the rate of 30%. By Ext.P2, the Deputy Commissioner of Income Tax (Circle -1) Alappuzha, while assessing the income tax, under Section 143(1) of that Act, allowed depreciation allowance only at the rate of 15%. In the assessment order Ext.P2 it was held that the assessee is a contractor employed by/engaged in supply/transport of goods and in the TDS certificate, the nature of payment was noted as "Payment to Contractor". The Assessing Authority held that the payment received by pe .....

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orries and therefore depreciation allowance at the rate of 30% should have been allowed. However, the Commissioner of Income-tax (Appeals), without going into the contentions, held that the finding of the Assessing Officer is correct. Petitioner has filed this Writ Petition aggrieved by these orders claiming depreciation allowance in terms of Appendix 1 2(ii) under the Income Tax Rules. 4. The respondents have filed a statement stating that the firm was engaged in the business of letting out lor .....

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t in the business of running lorries on hire. Therefore the firm was entitled only for depreciation allowance @ 15%. 5. I heard the learned counsel appearing for the petitioner and the learned Standing Counsel for the Income Tax Department. 6. It is clear from the order Ext.P2 that the assessment has been made on the basis of the TDS issued and Ext.P1 agreement entered into between the petitioner and the KSE Ltd. As per the agreement it is seen that the contractor had submitted a quotation offer .....

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33 1 Rs.180.00 2 Swaminathapuram Iringalakuda 165 2 Rs.250.00 3 Swaminathapuram Vedagiri 274 6 Rs.365.00 4 Swaminathapuram Kozhikode 220 3 Rs.390.00 It was further stated that the number of trucks indicated may increase or decrease depending upon the production and market conditions. 7. Appendix 1 under Rule 5 of the Income Tax Rules provide for the rates of depreciation allowance. Clause (III)(2) under Part A tangible assets of the New Appendix I, provides for depreciation allowance for 'mo .....

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.Machinery and Plant (1) Machinery and plant other than those covered by sub items (2), (3) and (8) below: (2) Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1st day of April 1990. 15 (3) (i) Aeroplanes- Aeroengines (ii) Motor buses, motor lorries and motor taxies used 30 in a business of running them on hire." 30 8. In Ext.P2 assessment order the assessing authority limited the depreciation allowance to 15% in respect of the .....

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