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TMI Blog2016 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Commissioner of Income-tax (Appeals) which confirmed the order of the Assessing Officer not giving depreciation on trucks which were not used for the purpose of running of business. 3. While admitting the appeal, this court framed the following substantial questions of law: "(A) Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the CIT(A) and allowing process loss in Sun Flower Oil as claimed by the assessee? (B) Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the CIT(A) and holding that the assessee is entitled to depreciation at the rate of 40% on trucks given on hire?" 4. This matter was ordered to be heard with Tax Appeal No. 1414 of 2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , quality of soil and other such factors. It was also noted that if the raw cotton seed oil is obtained from crushing of inferior quality of cotton seed, then the process loss was likely to be higher, but Gross Profit rate may go up since the assessee may have purchased the raw material at a cheaper rate. Tribunal also noted that there were instances where though process loss was high, Gross Profit rate was also high compared to other years. Tribunal noted contention of the assessee that the production recorded and maintained by the assessee were being checked and supervised by the Food and Civil Supply department of the Government. Periodic reports and returns were submitted by the assessee. No irregularities were noticed. Tribunal also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss loss ranges between 2.65% to 4.20%. 11. In addition to above, we also notice that in earlier years, orders passed by the tribunal were accepted by the Revenue and not carried in appeal. 12. Sum total of above discussion is that we do not find that the decision of the tribunal requires reconsideration. Question No.(1) is therefore, answered against Revenue." 5. In the light of the above, issue No. 1 is answered in favour of the assessee and against the revenue. 6. So far as issued No. 2 is concerned, the learned counsel for the appellant has taken us through paragraph No. 6.5 of the assessment order at page No. 24 which is extracted hereinbelow: "The assessee has claimed depreciation at the rate of 40% on trucks purchased and used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess for transporting the edible oil from one place to another, the Assessing Officer has rightly restricted the claim of the assessee at 25% instead of 40% as claimed by the assessee. In the appeal filed by the assessee, the Commissioner of Incometax (Appeals) discussed the issue in detail and confirmed the view taken by the Assessing Officer that since the trucks were not being used for hire purpose, the assessee is not entitled to claim depreciation at the rate of 40%. The Assessing Officer, therefore, rightly restrict the claim to 25%. 8. In further appeal before the Tribunal by the assessee, the Tribunal reversed the order of the Commissioner of Income-tax (Appeals) by making certain observations in paragraph No. 8, relevant portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Bhagwati Appliance (now Dairyden Ltd.) v. Income-Tax Officer reported in (2011) 337 ITR 286 (Guj) wherein at page No. 291 in paragraph No. 9 this court observed as follows: "The Supreme Court, in the ase of CIT v. Gupta Global Exim P. Ltd. (2008) 305 ITR 132 (SC), on which reliance has been placed by the learned counsel for the revenue has, while construing the provisions of entry No. I II of Appendix I to the Rules, held that under item (2)(ii) of heading III, the higher rate of depreciation is admissible on motor trucks used in a business of running them on hire, therefore, the user of the same in the business of the assessee of transportation is the test. The court, however, held that what is relevant for consideration under i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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