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TMI Blog2010 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of this ground. 3. At the time of hearing before us, it is submitted by the learned counsel that the assessee derives income from leasing of various assets and the lease rent received by the assessee was Rs. 56.65 crores. That the AO allowed depreciation on motor cars leased out by the assessee @ 15 per cent as against 30 per cent claimed by the assessee on the ground that the assessee did not provide the evidences that they were plied as taxis. He submitted that the issue is now squarely covered in favour of the assessee by the decision of the Hon'ble jurisdictional High Court in the case of Agarwal Finance Co. (P) Ltd. vs. CIT (2009) 28 DTR (Cal) 102 wherein their Lordships after considering the earlier decision of the same Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cars used in the business of running them on hire is excluded from the normal rate of depreciation naturally the same is entitled for higher rate of depreciation. Otherwise if the contention of the Revenue is accepted then no depreciation would be allowed at all if motorcar is used in the business of running on hire. He also submitted that the motorcar used in the business of running them on hire is called motor taxi. 6. We have carefully considered the arguments made by both the sides and perused the material placed before us. We find that the Hon'ble jurisdictional High Court in the case of Agarwal Finance Co. (P) Ltd. vs. CIT held as under: "6. He further drew our attention to a decision of Delhi High Court in CIT vs. Bansal Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly it appears to us that an SLP was filed from the said order of the Delhi High Court and which in a subsequent judgment of the Delhi High Court has been specifically recorded that the SLP against the decision in CIT vs. Bansal Credits Ltd. was dismissed by the apex Court and, in fact, the Division Bench of the Delhi High Court held that the order so passed by the Delhi High Court in CIT vs. Bansal Credits Ltd. has been indirectly confirmed by the Supreme Court. Needless to join any issue in regard thereto by us in respect of such statement as has been made in the decision reported in CIT vs. Goodwill India Ltd. (2004) 187 CTR (Del) 11 : (2004) 268 ITR 480 (Del). It further appears to us that the Delhi High Court after taking into account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court taking into account the facts and circumstances of this case and accordingly we answer the question in favour of the assessee and allow the appeal. We further keep it on record that the assessee is entitled to get depreciation as claimed @ 40 per cent." 6.1 The Hon'ble apex Court in the case of CIT vs. Shaan Finance (P) Ltd. cited supra has held as under: "Where the business of the assessee consists of hiring out machinery and/or where the income derived by the assessee from the hiring of such machinery is business income, the assessee must be considered as having used the machinery for the purpose of its business." 6.2 Though the above observation of their Lordships was with regard to allowance of investment allowance to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the above contention of the Revenue because if the contention of the Revenue is accepted then if the assessee used the motor cars in the business of running them on hire the assessee would not be entitled to depreciation on such motor cars because Entry No. III(2) excludes motor cars used in the business of running them on hire. If as per Revenue the assessee is to be excluded from Entry No. (3)(ii) also then he will not be entitled to any depreciation, which can never be the intention of the legislature. It was explained by the learned counsel that the motorcar used in the business of running them on hire is in common parlance referred to as motor taxi. This contention of the learned counsel seems plausible. We, therefore, hold that when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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