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TMI Blog2016 (6) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... e on 29-09-2008 declaring total income of Rs. 80,47,920/-. The AO completed the assessment u/s.143(3) on 28-12-2010 determining the total income at Rs. 1,48,03,630/-. Subsequently, the AO noticed that the assessee firm has been allowed depreciation on vehicles u/s.32 of the I.T. Act @30% instead of 15%. He therefore issued a notice u/s.154 asking the assessee to submit its objections, if any for the proposed addition by way of rectification. The AO noted that in the audit report the nature of business does not include "hiring of motor vehicles business". It was submitted by the assessee that it has objection for the proposed rectification since it has rightly claimed depreciation @30% on vehicles since the firm has earned income by giving v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the running of commercial vehicles on hire but it used the vehicle for needs of its sister concern/partner Shri Bharat Cemco Pvt. Ltd. Such use of the vehicles cannot be said as commercial purposes. Object of allowing higher rate of depreciation for the commercial vehicles is that in the business of hiring of vehicle. There is continuous and prolonged use of assets resulting into heavy wear and tear and reduced life. Therefore, higher rate of depreciation is necessary. The appellant's case does not fall into this category. Therefore, the assessing officer was justified in allowing depreciation @15%. The disallowance is sustained and the ground is rejected." 6. Aggrieved with such order of the CIT(A) the assessee is in appeal before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Chennai Bench of the Tribunal in the case of Urmila Enterprises Pvt. Ltd. Vs. ACIT reported in 38 ITR (Tribunal) 533 he submitted that the Tribunal in the said decision has held that when assessee receives rental receipts on hiring of vehicles assessee is entitled to higher rate of depreciation @30%. He submitted that in that case also the assessee company was engaged in the business of undertaking contract work for road construction and trading in Ingergoll Rand products etc. In that case, the assessee had received rental receipts on account of hiring of the vehicles. The AO and the CIT(A) rejected the claim of higher depreciation. However, the Tribunal allowed the claim of higher depreciation @30%. 7.1 Referring to the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decision has held that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. He accordingly submitted that the 154 proceedings initiated by the AO is illegal and no addition can be made on the basis of 154 proceedings. 10. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that the audit report of the assessee does not show that the assessee is running the business of hiring of vehicles. The higher rate of depreciation of 30% on motor cars is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T. Act. It is the submission of the Ld. Counsel for the assessee that whether the assessee is entitled to higher rate of depreciation on motor cars which were given on hire and the receipt of which has been shown in the accounts under the head "vehicle hiring receipts" is a debatable issue and therefore rectification proceedings u/s.154 is not possible on a debatable issue. 12. We find some force in the argument of the Ld. Counsel for the assessee. The Chennai Bench of the Tribunal in the case of Urmila Enterprises Pvt. Ltd. (Supra) has held that when assessee receives rental receipts on hiring of vehicles the assessee is entitled to higher rate of depreciation @30%. In that case, the assessee company was engaged in the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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