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TMI Blog2015 (9) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... down value of the vehicles used in the business of transportation of municipal solid waste ought to be granted @ 30% instead of @15% granted by the Assessing Officer and upheld by the learned CIT (A). It further contends that the learned CIT (A) has erred in upholding charging of interest u/s 234B and 234C of the Income Tax Act. 2. Brief facts of the case are that the assessee filed return of income electronically on 30.09.2009 declaring an income of Rs. 1,16,71,500/-. The case of the assessee was selected for scrutiny assessment and a notice u/s 143(2) was issued and served upon the assessee. It emerges out from the record that the assessee was running two proprietary concerns namely M/s C.V. Bhanumurthy Reddy and M/s Swachatha Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles for transportation of goods on hire. The learned CIT (A) rejected the contentions of the assessee. 4. With the assistance of the learned representatives, we have gone through the record carefully. Time and again this controversy was being faced by the Revenue authorities. Therefore, the Board has issued a circular pointing out as to how this controversy is to be silenced. The circular of the Board read as under: "Circular No.609 dated 29.7.1991 (S.No.272)........ where a tour operator or travel agent uses motor buses or motor taxis owned by him in providing transportation services to tourists, higher rate of depreciation would be allowed on such vehicles. It is further clarified that higher depreciation will also be admissible o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )...." 6. The assessee has further relied upon the decision of the Hon'ble Bombay High Court in the case of CIT vs. S.C. Thakur & Bros. wherein circular No.609 and 652 dated 29.7.91 and 14.6.1997 have been interpreted by the Hon'ble Bombay High Court. The question before the Hon'ble High Court was: "(a) The substantial question of law which arises in the preset appeal is regarding the correct interpretation of section 32 of the Income Tax Act and other relevant provisions of the Act and whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal erred in confirming the order of CIT (A) and allowing the depreciation to the assessee @ 50% and 40% respectively for assessment year 1991-92 and 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [(1993) 112 CTR (St) 14] issued by the CBDT which reads as under : "Subject : Sec. 32 of the IT Act, 1961 Rate of depreciation on motor lorries used in the business of transportation of goods-Regarding. Under sub-item 2(ii) of Item No. III of Appendix 1 to the IT Rules, 1962, higher rate of depreciation is admissible on motor buses, motor lorries and motor taxis used in a business of running them on hire. A question has been raised as to whether for deriving the benefit of higher depreciation, motor lorries must be hired out to some other person and whether the user of the same in the assessee's business of transportation of goods on hire would suffice. 2. In Board's Circular No. 609, dt. 29th July, 1991 [(1992) 96 CTR (St) 233], it was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsporting the solid waste of municipality on hire. Thus, the very nature of the assessee's business is such which bring him in the ambit of the circular. It is not the case where a person is running any consultancy firm and used a motor car for himself. Here the vehicles are used for transporting the goods of third concern by virtue of a contract. There is a commercial exploitation of the vehicles for transporting the goods on hire. Therefore, the assessee is entitled for higher rate of depreciation. We allow the appeal of the assessee and delete the disallowance. As far as charging of interest is concerned, no arguments were advanced. The interest would be consequential, hence rejected. 8. Since we have decided the appeal in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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