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Interpretation of Income-tax Rules regarding depreciation on motor vehicles owned by the assessee. Analysis: The judgment revolves around the question of whether the motor vans and three wheelers owned by the assessee qualify for depreciation at an enhanced rate of 30 percent under the Income-tax Rules. The assessee, Stanes Tyre and Rubber Products Limited, Coimbatore, initially claimed depreciation at 30 percent, which was later reduced to 20 percent by the Income-tax Officer upon reassessment. The Commissioner of Income-tax (Appeals) allowed the assessee's appeal, stating that vans and three wheelers do not fall under the category of "motor cars, motor cycles, scooters or other mopeds" as specified in the Income-tax Rules. The High Court delved into the specifics of the Income-tax Rules, particularly Appendix I, which outlines the classes of motor vehicles eligible for depreciation. While vans and three wheelers are not explicitly mentioned in the schedule, it is acknowledged that they are indeed motor vehicles. The court highlighted two relevant entries in the schedule: item No. III-C(7) referring to vehicles for personal use, and item III-D(9) encompassing vehicles used primarily for hire, reward, goods transportation, or agricultural operations. The distinction between the two entries is crucial. Vehicles under item No. III-C(7) are intended for personal or family use, while those under item No. III-D(9) are primarily for hire, reward, or goods transportation. The court affirmed that vans and three wheelers align more closely with the latter category, as confirmed by the registration certificates indicating their use as goods vehicles. Despite not being explicitly listed, the court emphasized that the assets could still qualify for depreciation if falling under any of the specified categories in the schedule. In conclusion, the court ruled in favor of the assessee, allowing depreciation at the enhanced rate of 30 percent for the motor vans and three wheelers. The decision was made based on the vehicles' usage pattern and alignment with the category specified in the Income-tax Rules. The Revenue's appeal was dismissed, and the assessee was awarded costs amounting to Rs. 500.
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