1996 (9) TMI 13

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..... Item III-E(1A) of the Income-tax Rules, 1962, and is not the finding wrong, unreasonable and perverse? (ii) the assessee is entitled to depreciation at the rate of 40 per cent.?" The assessee is a partnership firm engaged in plying transport buses carrying passengers on different routes. On its buses, with regard to the assessment years, they claimed depreciation at 40 per cent. It was not granted, but granted only at 30 per cent. Such percentage (40 per cent.), it was held, would be available only for vehicles on hire. This was the view taken by the Assessing Officer for both the years. The Assessing Officer observed that the firm is a regular bus owner and vehicles are not hired, but they are utilised on regular routes on permits by cha .....

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..... on hire, as contemplated in Appendix I to the Income-tax Rules, 1962. A perusal of items D9 and E(1A) of the Income-tax Rules would be relevant in this context. They are reproduced hereinafter one after the other : ------------------------------------------------------------------------------------------------                             Depreciation allowance as percentage of---                             (i) actual cost in the case of ocean going ships;   &n .....

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..... taxies are used in a business of running them on hire or not. Really, the question requires consideration from the point of view of the assessee in the context. Whether the payment is made by one person or a group of persons or by individual passengers would be of total irrelevance in the context. The real question is, as to whether the assessee engaged in the business of plying vehicles as an activity uses the concerned vehicles for hire or not. It would be wholly irrelevant whether the assessee receives payments in regard to the activity of hire from a passenger, a group of passengers or an institution engaging the vehicle for its transport activity. In a given situation, an institution may engage itself in a transport activity taking th .....

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