TMI Blog2016 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... In absence of any additional material, only on basis of an isolated answer by one of the Directors of the company, the Assessing Officer could not have come to the conclusion that the process loss was artificially inflated. Tribunal had also relied on certificate given by the supplier of machine who stated that typically the process loss ranges between 2.65% to 4.20%. - Decided in favour of assessee. Depreciation on trucks given on hire - Held that:- As the trucks were not used in the business of running them on hire, the Tribunal was not right in allowing depreciation at the rate of 40% by reversing the order of the Commissioner (Appeals). The depreciation on trucks ought to have been restricted to 25% as has been rightly granted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2006 came to be decided by this court vide judgement and order dated 20.7.2011. In paragraph Nos. 5 of the judgement, this court has observed as under: 5. With respect to question no.1, at the outset, it needs to be noted that against the order of the tribunal in case of this very assessee respondent for the same issue, for the assessment year 19901991, the Revenue chose to approach this Court by preferring Tax Appeal No.10/2001 where identical question of law, as raised in present tax appeal, was admitted and has been decided by this Court in favour of the assessee and against the Revenue in the following manner : 9. Quite apart from the above observations, we find that the tribunal had examined the materials on record which in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aval, supplier of machinery to the assessee for manufacturing of refined cotton seed oil who had stated that process loss is typically found depending on the quality of raw cotton seed and functioning of the plant and would normally range between 2.65% to 4.20%. It can thus be seen that the tribunal based its findings on several factors and came to the conclusion that without any evidence or base the Assessing Officer could not have held that the process loss claimed by the assessee(in the present case at the rate of 3.05%) was inflated or excessive. 10. We are of the opinion that tribunal has considered the facts on record. Several relevant factors have been examined. These facts included uncertainty of the nature of business and fluctu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss at ₹ 9,86,084/-. Scrutiny of the details and explanation filed by the assessee shows that the trucks acquired by the assessee in the earlier years are not used in the business of running them on hire. The assessee is engaged in refining and processing of oil and not in any transport or running of the vehicles on hire business. The depreciation rules in this regard are very clear which lays down that the higher rate of depreciation at 40% is only available in the case of Motor vehicles and lorries are used in the business of running them on hire. In the case of the assessee motor truck were used for the purpose of assessee s business for transporting the edible oil from one place to another. The other transportation charges and hire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is extracted below: The learned D.R. Is also right in his submission that special rate of depreciation of 40% is admissible only when the trucks are used in the business of running them on hire. Since the assessee had given the trucks on hire to Maruti Roadways, the assessee is entitled to depreciation @ 40%. In this view of the matter, the order of the CIT(A) is reversed. Ground No. 2 is allowed. 9. The learned counsel for the appellant has contended that the Tribunal has committed serious error in reversing the order of the Commissioner of Income-tax (Appeals) in view of the decision of the Apex Court in the case of Commissioner of Income-tax v. Gupta Global Exim P. Ltd. r eported in (2008) ITR 132(SC) wherein it was held as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under item (2)(ii) of heading III of Appendix I to the Rules is whether the assessee was in the business of hiring out his trucks in addition to his business of trading in timber. The court observed in the facts of the said case that the order of assessment clearly indicates that the assessee was only in the business of trading in timber and there was no evidence to indicate that the assessee was in the business of hiring out motor lorries for running them to earn business income. 11. Keeping in mind the above decisions and taking into consideration the fact that the trucks were not used in the business of running them on hire, the Tribunal was not right in allowing depreciation at the rate of 40% by reversing the order of the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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