9911796707
|
Home
Issues Involved:
The judgment deals with the issues of depreciation rate entitlement for leased vehicles, classification of leasing for depreciation purposes, and application of different depreciation rates based on vehicle usage. Issue 1 - Depreciation Rate Entitlement: The assessee claimed depreciation at 40% for vehicles leased out, but a mistake was identified as the vehicles were not given on hire but on lease rent. The original assessment allowed the higher depreciation rate, which was corrected under section 154 of the Income-tax Act. The Commissioner of Income-tax (Appeals) and the Tribunal upheld the correction, leading to the conclusion that the depreciation rate of 30% was applicable, not 40%. Issue 2 - Classification of Leasing for Depreciation: The question arose whether leasing vehicles on monthly rent to different concerns could be considered as used in the business of running on hire. The Tribunal determined that since the assessee did not ply the vehicles on road and realize hire charges, the depreciation rate of 30% applied as per the Depreciation Schedule, Appendix I, Part III(1A). Issue 3 - Application of Different Depreciation Rates Based on Vehicle Usage: The judgment clarified the distinction in depreciation rates based on vehicle usage. Appendix I of the Rules specifies different rates for vehicles used in a business of running them on hire compared to those not used in such a manner. As the vehicles in question were not run by the assessee on hire, the depreciation rate of 30% was deemed applicable, in line with the findings of the Income-tax Officer, Commissioner of Income-tax (Appeals), and the Tribunal. In conclusion, the High Court upheld the decisions of the lower authorities, ruling in favor of the Revenue and against the assessee on all three issues. The reference application was disposed of accordingly.
|
