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Issues Involved:
The judgment involves the determination of the correct rate of depreciation applicable to a truck used by an assessee for both personal business and hire purposes, based on the provisions of rule 5 of Appendix I to the Income-tax Rules, 1962. Details of the Judgment: Issue 1: Rate of Depreciation Claimed The assessee, a registered firm engaged in manufacturing and trading in limestone, filed a return claiming depreciation of Rs. 75,228 at 40%. The Assessing Officer allowed depreciation at 25% only, disallowing Rs. 28,201 based on the truck's predominant use for the assessee's own business. An appeal was made to the Commissioner of Income-tax, Jabalpur, contending that the truck was used for hire and business, justifying the 40% depreciation rate. Issue 2: Tribunal's Decision The Income-tax Appellate Tribunal allowed the appeal, citing a previous court decision and the relevant rule stating that 40% depreciation is applicable only when the vehicle is used for hire. The Tribunal found that the truck was mainly used for the assessee's own business, thus justifying the 25% depreciation rate. The Tribunal reversed the Commissioner of Income tax (Appeals) order and upheld the Assessing Officer's decision. Issue 3: Legal Precedents The judgment referenced various court decisions, including the case of Income-tax Commissioner v. Anupchand and Co., where it was clarified that the higher depreciation rate of 40% applies only when the vehicle is used for hire, not for the assessee's own business. Similar rulings from the Rajasthan and Karnataka High Courts supported this interpretation, emphasizing the necessity of the vehicle being used for running on hire to claim the higher depreciation rate. Conclusion: The High Court upheld the Tribunal's decision, emphasizing that the truck's predominant use for the assessee's own business warranted the 25% depreciation rate. The court dismissed the appeal, stating that no substantial question of law arose in the case, as the relevant legal provisions and precedents were clear regarding the eligibility for the higher depreciation rate based on the vehicle's usage for hire.
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