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TMI Blog2017 (8) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... of Kerala in the case of Balkrishna Transports [ 1996 (9) TMI 13 - KERALA HIGH COURT] Consideration of the definition of the Motor Vehicles Act, 1939 as well as perusal of the judgment and submissions of the parties, we do not have any hesitation to hold that Public Transport carries the passenger may be for one stop or more than that may be for smaller which can be limited or even otherwise certainly there is implied contract between passenger and the buses owner for hire and in our considered opinion, it cannot be said that the passenger individually or passengers jointly do not have any contract with the bus owner while carrying on journey, hence, the submissions of the Revenue Department does not sound good to the extent that the Ld. CIT(A) erred in holding that there is no difference between hiring out the vehicle for a specified period for a consideration and letting the passenger travel in a vehicle on payment of charges ignoring that a passenger traveling in a bus purchases only right to travel between fixed points as per terms and conditions of the transporter. - Decided against revenue. - I.T.A. Nos. 425, 426 & 427(Asr)/2016 Assessment Year:2010-11, 2011-12 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled for higher rate on depreciation and depreciation @ 15% can only be admissible and therefore, the excess claim on depreciation was disallowed and added to the return incomes for the relevant assessment years which resulted into filing of appeals before the Ld. CIT(A). In appeal before Ld. CIT(A), it was contended by the assessee company that AO had arbitrarily restricted the claim of depreciation on buses @ 15% instead of 30% which was claimed by the assessee company. It was further contended that the assessee company engaged in the business of transportation of passengers and is registered under the Motor Vehicle Act, which clarifies the buses used for the transporting and carrying passengers, therefore eligible for depreciation at 30% instead of 15 % and even otherwise definition of (contract carriage) and (stage carriage) as per section 2(3) 2(29) of the Motor Vehicle Act, 1963 was extracted to infer that the buses used in the transportation business were hired by the passengers, thus, entitling the buses for a higher rate of deprecation. The Ld. CIT(A) while considering the statements of the assessee and taking into account the various case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Merriam Webster Dictionary defines payment for the temporary use of something Cambridge Dictionary defines hire as to pay to use something for a short period of time. Further, the Ld. AR drew our attention to the definition of contract carriage and stage carriage. Further, the Ld. AR submitted that the Hon ble ITAT, A Madras Bench in the case of ITO vs. Sarojini Transports (P) Ltd. reported at (1986) 24 TTJ (Mad.) 303 and also order passed by the Chandigarh Bench in the case of Pepsu Road Transport Corporation Vs. ACIT, Circle, Patiala vide order bearing ITA No.956/Chandi/2007 dated 17.01.2008 as well in judgment passed by the Hon ble High Court of Kerala in the case of CIT vs. Balakrishna Transports reported at [1998] 233 ITR 133 analyzed the similar and identical issue and allowed the deprecation @ higher rate. Therefore, the Ld. AR finally prayed that the order passed by the Ld. CIT(A) does not requires to be interfered with because the same is based on logic, reasons and judgments delivered by various High Courts and Tribunal as well. 6. We have gone through with the facts and circumstances of the case as it reflects from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and by applying his own mind came to the conclusion that : The A.O was entirely unjustified in holding that the appellant s buses were running on hire as they were used for the appellants own business of transport and were therefore, entitled for deprecation @ 15% only. This is fallacious view which cannot be sustained. Even if the word hire is reckoned in the context of lease, as has been done by the AO, yet no qualitative difference is seen between the lease of the vehicle for specified period for a consideration and letting the vehicle on hire for a short duration on payment of hire charges. In both the cases, there is entitlement for hire rate of depreciation . We independently applied our mind and realized from the order passed by the Assessing Officer that he lost sight to the facts that if a person may be individual or in group gets the public transport for his traveling purposes then certainly may be for shorter period there is an implied contract of hire and simply because the buses stops at different fixed points at the terms and conditions of transporter but still the passengers may be individually or jointly gets the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transport Corporation Vs. ACIT, Circle, Patiala vide order bearing ITA No.956/Chandi/2007 dated 17.01.2008 was pleased to held that the buses plied by the assessee on hire and for the buses used in the business of running them on hire, rate of depreciation prescribed is 40%. We, therefore, set aside the order of CIT(A) and direct the Assessing Officer to allow the depreciation @ 40% as claimed by the assessee. Further, ITAT Madras Bench A in the case of ITO vs. Sarojni Transports (P) Ltd. reported at (1986) 24 TTJ (Mad.) 303, while dealing with the same issue Considered the Sec.2(25) of the Motor Vehicles Act, 1939 and summarized that buses which are plying between different points and which carry passengers are public service vehicles and, therefore, in terms of the definition they carry passengers for hire or reward and includes a motor cab, contract carriage and stage carriage . Further when an assesse run motor buses on several routes and received amounts by way of collection regularly, it clearly tantamount to the business of running buses on hire. It could not be said that unless a single person took an entire bus on hire i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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