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TMI Blog2013 (7) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of its business, satisfying both requirements of Section 32 of the Act and hence, is entitled to claim depreciation in respect of additions made to the trucks, which were leased out. - Decided in favor of assessee. - Income Tax Appeal 6/2000 - - - Dated:- 4-7-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Petitioner : Mr. Sanjeev Sabharwal, Sr. Standing Counsel For the Respondent : Mr. Santosh K. Aggarwal, Advocate JUDGMENT Sanjiv Khanna, J. (Oral) The present appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act, for short) relates to the assessment year 1986-87. 2. The following substantial questions of law were framed while admitting the present appeal vide order dated 6th Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are entitled to 100% depreciation. 4. As far as question C is concerned, we note that the assessee is engaged in the business of leasing and financing and had entered into lease agreements with third parties. The assessee claimed depreciation @ 40% which was restricted to 30% by the Assessing Officer observing that higher rate of depreciation was applicable if the vehicle in question was being used for running them on hire and there was no evidence to show that the vehicles were being actually used for hire. He recorded that the assessee was not in the business of hiring and had not shown that the vehicles were in fact hired. The lessee had taken the vehicles and were using them in their normal business. The said disallowance was uphel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets are to be used by the assessee for the purposes of his business or profession. Once it is accepted that the leasing out of the vehicles is one of the modes of doing business by the assessee and in fact the income derived from such leasing is treated as business income of the assessee, it would be clearly contradictory in terms to hold that the vehicles in question were not used wholly for the purpose of the assessee‟s business, which, as noted above, is one of the requisites stipulated in section 32, apart from the other two conditions indicated above, which all the assessees indubitably fulfil. (emphasis supplied) 6. Recently, the Supreme Court in I.C.D.S. Ltd. Vs. Commissioner of Income-tax and Another (2013) 350 ITR 527 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of additions made to the trucks, which were leased out. With regard to the claim of the assessee for a higher rate of depreciation, the import of the same term "purposes of business", used in the second proviso to Section 32(1) of the Act gains significance. We are of the view that the interpretation of these words would not be any different from that which we ascribed to them earlier, under Section 32 (1) of the Act. Therefore, the assesseefulfills even the requirements for a claim of a higher rate of depreciation, and hence is entitled to the same. 7. Learned counsel for the appellant-revenue has submitted that the Assessing Officer and the appellate authorities have not gone into the question of actual use of the vehicles by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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