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TMI Blog1984 (11) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... written down value to trucks and dumpers as claimed by the assessee. The hire charges actually received by the assessee were Rs. 7323.50 only during this year. The CIT on going through the order of the ITO was of the opinion that it was erroneous insofar as it was prejudicial to the interest of the Revenue since the hiring of trucks was of casual and incidental nature and was very nominal in value so that within the meaning of cl. E(1A) of part III of Appendix I to the IT Rules, 1962 it could not be said that the assessee uses motor lorries in the business of running them on hire. He was of the opinion that the assessee was entitled to depreciation only at 30 per cent and not 40 per cent. 3. The assessee objected to the notice and his obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f he opinion that transportation cost incurred on the carriage of stone constituted one of the inputs of the assessee and was naturally included in the ultimate price charged from the customers. This could not be treated as hire charges realised from the customers. So far as the second argument is concerned, the CIT held that the mere fact that the trucks were registered as public carriers and were also occasionally given on hire was of not avail. What was material was the actual use to which the vehicles were put. The assessee was using the vehicles primarily for its own business and not running them on hire. The CIT, therefore, held that the depreciation should be allowed at 30 per cent only. 5. So far as the dumpers are concerned, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of the Revenue. 7. So far as the main ground for passing the impugned order is concerned, the ld. counsel for the assessee addressed more or less the same arguments which have been advanced before the CIT but were rejected by him. In this regard we are of the opinion that the assessee's case is sound. The assessee indeed earns a major part of its income from stone quarrying but it owns trucks which though mainly used for carrying its own stone from the mine site to the depot are also used for hiring to third parties and hire charges have been earned and returned in the return of income. There is not dispute on these facts. The trucks are all registered as public carriers. If a businessman is using his trucks or intends to use his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red an 8th Jan., 1981 and hire charges received amounting to Rs. 1157. Truck No. RSO 132 and RSO 232 we registered on 17th Dec., 1980 and 24th Dec., 1980 and hire charges received were Rs. 1114 and Rs. 1081.50 respectively. Similarly for older trucks hire charges have been received. So far as the new trucks are concerned, the hire charges received do not show that they were casual income of the assessee from hiring. We do not state this fact as the ration of our decision but it appears that the law has not laid down any criteria for determining in which case the depreciation of 40 per cent would be allowed insofar as the words used are not mainly in the business of running them on hire but only in the business of running them on hire. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee did use his trucks for transportation of stones from his mines to his deport for the convenience of the customers, it must necessarily be concluded that this particular activity would tantamount to hiring of trucks. Therefore, on the account also the assessee's claim for depreciation at 40 per cent falls within the cl. E(1A) of Part-III of Appendix I of IT Rules, 1962. We, therefore, hold that the order of the CIT in this regard under s. 263 is erroneous and only that part of the order is set aside. So far as his order in respect of disallowance of 1/3rd of depreciation on cars and to reduce the depreciation on dumpers to 30 per cent is concerned, the same is up-held. The appeal is partly allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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