TMI Blog1995 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... s and thereby holding that the assessee is entitled to depreciation at 40 per cent. and not at 30 per cent. as is allowable in case of motor lorries ? " The brief facts of the case are that the assessee is a trader in stones and owned two trucks which are used for transportation of stones from the site of mines to the depot of the assessee as well as to the customers' premises. The claim of the assessee was that the trucks were occasionally used and when not in use by the assessee hired out to a sister concern. The income from hiring of the trucks in this manner was at a figure of Rs. 33,155. The value of the truck was shown at a figure of Rs. 3,82,280, and the expenditure on the running and maintenance of the trucks was Rs. 1,90,663. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the language used in (III)E(1A) of the depreciation table which uses the words " used in a business of running them on hire " means that the assessee must not only be giving the trucks on hire but also carrying on a business of running the trucks on hire. The fact which was also taken into consideration by the Commissioner of Income-tax was that this could be at the time only when there must be continuity or regularity on hiring transaction. Casual hiring to a sister concern is not sufficient to justify it that the assessee was carrying on the business of hiring as well, and, therefore, the depreciation at 30 per cent. was directed to be computed. In second appeal before the Income-tax Appellate Tribunal, the Tribunal, follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained the distinction about the entitlement to depreciation at 40 per cent. and 30 per cent. In the case of motor buses and motor lorries other than those used in a business of running them on hire, they are entitled to depreciation at 30 per cent. while the motor buses, motor lorries and motor taxis used in a business of running them on hire are entitled to depreciation at 40 per cent. If a truck is not used for hiring but for the purpose of one's own business, then it would be entitled to depreciation at 30 per cent. and not 40 per cent. The context of the relevant entry does indicate the same. In the present case, the business of the assessee is that of mining and sale of stones excavated from the mines and the trucks are used ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not at 40 per cent. In this view of the matter, we are of the opinion that the Tribunal was not right in holding that the assessee is entitled to depreciation at 40 per cent. and not at 30 per cent. on the trucks and dumpers used by it for its business. " The rate of depreciation which is provided in respect of motor lorries other than those in a business of running them on hire is 30 per cent. If the motor buses, motor lorries and motor taxis are used in a business of running them on hire, then the depreciation is allowable at 40 per cent. in accordance with law. The finding which has been recorded by the Tribunal is that there is no specific mention in respect of hire charges of the truck in the bills yet the hire charges should be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rate of depreciation has been separately provided. The view this court has taken in the case of CIT v. Manjeet Stone Co. [1991] 190 ITR 183, referred to above that the trucks were mainly used by the assessee for carrying stones from the mine site to the sales depot and, therefore, he should be entitled to depreciation at 30 per cent. is undisputed in the facts of the present case also. In the statement of case, the assessee has been mentioned as a trader of stones using two trucks for transportation of stones from the mine site to the depot of the assessee as well as to the destination of the customers. It has nowhere come on record that the assessee was carrying on the business of running the vehicles on hire. The business of running t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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