9911796707
TMI Blog2006 (7) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be entitled to depreciation at 40 per cent. - There is no additional requirement on the assessee to show that the third parties had used those vehicles for hire. - it is clear that it is the end user of the specified asset which is relevant for determining the percentage of depreciation - 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 – higher rate of depreciation is allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... only a matter of conjecture. The assessee then filed an appeal before the Tribunal which accepted its contention and allowed depreciation at 40 per cent. While doing so, the Tribunal relied upon its decision in Goodwill India Ltd. (I.T.A. No. 4916/ Delhi of 1999), which is a part of the same order passed by the Tribunal. The Tribunal noted the conclusion of the Assessing Officer that the assessee was not running vehicles on hire and hence was not entitled to the higher rate of depreciation. It also noted the view of the Commissioner of Income-tax (Appeals) confirming the action of the Assessing Officer. The Tribunal then considered the rival submissions of the parties and concluded that the case is covered by an earlier decision rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als were filed by the Revenue in this court on a similar fact situation, and in respect of four of them the Tribunal had remanded the matter back to the Assessing Officer to examine whether the leased out vehicles were actually used by the lessee for the business of hire. This court did not interfere with that direction of the Tribunal. On this basis, it was contended by learned counsel for the Revenue that in the present appeal, a similar direction should be given remanding the matter back to the Assessing Officer to examine whether the leased out vehicles had actually been used by the lessees in the business of hire. It was contended by learned counsel for the assessee that the assessee is only required to show that it had leased out it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from that, it was noted in Bansal Credits Ltd. [2003] 259 ITR 69 (Delhi) that the cases relied upon by the Revenue are not applicable to the matter in issue. In respect of the cases relied upon by the Revenue, that is, the decision of the Calcutta High Court in Soma Finance and Leasing Co. Ltd. v. CIT [2000] 244 ITR 440, the Rajasthan High Court in CIT v. Sardar Stones [1995] 215 ITR 350 and the Karnataka High Court in Gown Shankar Finance Ltd. v. CIT [2001] 248 ITR 713, it was found as a fact that the trucks that were the subject-matter of depreciation were being used by the assessee for the transportation of their own products. It was observed that the dominant purpose for which the assessee was required to use the trucks, so as to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to a higher rate of depreciation. In the present case, as we have already noted, there is no dispute about the fact that the vehicles which are the subject-matter of the lease agreements were in fact given by the assessee to third parties. To this extent, the requirement of law has been met. There is no additional requirement on the assessee to show that the third parties had used those vehicles for hire. Under these circumstances, we do not think that the contention of the Revenue should be accepted. The question of law framed while admitting this appeal on October 30, 2000, is therefore, answered in the affirmative, and in favour of the assessee. We may also note that learned counsel for the Revenue tried to make out a distin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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