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Issues Involved:
The issues involved in this case are: 1. Whether the air-conditioning plant is considered an integral part of a bus for the purpose of depreciation calculation. 2. Whether the depreciation on an air-conditioner fixed in a bus should be allowed at the rate applicable to the bus or the rate applicable to the air-conditioner. Judgment Details: Issue 1: The dispute in this case pertains to the assessment year 1977-78. The assessee, a partnership firm engaged in a transport bus service business, claimed that the air-conditioner in their buses should be considered an integral part of the vehicle, entitling them to depreciation at the rate applicable to such vehicles. However, the Assessing Officer disagreed and determined the value of the air-conditioning machinery separately, allowing a lower depreciation rate on it. The Commissioner of Income-tax (Appeals) accepted the assessee's contention, directing depreciation at 30 per cent. on the combined value of the bus and air-conditioning machinery. The Tribunal upheld this decision based on precedent. The High Court, after hearing the Revenue's arguments, concluded that the air-conditioning plant is indeed an integral part of the bus, supporting the assessee's position. The court referred to a previous decision and answered the first question in favor of the assessee. Issue 2: Regarding the second issue, the court also ruled in favor of the assessee. The Revenue's argument that a bus can operate without the air-conditioning plant was not accepted, and the court upheld the depreciation at the rate applicable to the bus, rather than the air-conditioner. The court's decision on the second question aligned with its ruling on the first question, both being in favor of the assessee against the Revenue. The reference was thus disposed of by the High Court, affirming the assessee's position on both issues.
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