TMI Blog2008 (5) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... re the High Court was : Whether the respondent-assessee was entitled to depreciation at the rate of 40% on trailers and loaders? Briefly, the facts are as follows: The assessee is a private limited company engaged in the business of importing timber logs from abroad and selling them in India. During the previous year relevant to the Assessment Year 1998-99, the respondent-assessee had purchased trailers and loaders and put them to use on hire. The Assessment Officer (AO) took the view that the assessee was, during the relevant assessment year, in the business of timber trading and it is only occasionally that the trucks owned by the assessee were given out on hire to outside parties and, therefore, the assessee was not in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired or put to use on or after the 1 st day of April, 1990 20 (2)(i) Aeroplanes-Aeroengines (ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire." 40 Under sub-item 2(ii) of Item III, higher rate of depreciation is admissible on motor trucks used in a business of running them on hire. Therefore, the user of the same in the business of the assessee of transportation is the test. In the present case, none of the Authorities below (except the AO) has examined the matter by applying the above test. The AO has given his finding that the assessee was not in the business of transportation as he was only in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r running them to earn business income. The entire inference is drawn by CIT(A) only on the footing that the AO 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. For the aforestated reasons, we set aside the impugned judgment of the High Court and we remit the matter to Commissioner of Income Tax (Appeals) for de novo examination of the case in accordance with law. Needless to add that before deciding the matter afresh, the CIT (A) would give opportunity to the assessee to present its case and, if so advised assessee herein can seek amendments of grounds of appeal to which the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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