9911796707
TMI Blog1991 (2) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1983-84, the assessee company had purchased two trucks for Rs. 4,09,818. The trucks were used by the assessee for the purposes of its own business as well as for running them on hire. At the assessment proceedings for the years under consideration the assessee claimed depreciation at the rate of 40 per cent of the cost/written down value of the trucks. The ITO did not accept such claim on the ground that the trucks were not solely used for the purpose of hire and allowed depreciation at the rate of 30 per cent. However, in appeals the learned CIT(A) accepted assessee's claim for higher depreciation mainly on the ground that the trucks were registered with the Regional Transport Authorities as Public Carriers and were being mainly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Rules the relevant two entries, D(9) and E(1A), provide as under : APPENDIX-I PART III MACHINERY AND PLANT (Not being Ship) Class of asset Depreciation admissible D(9) Motor buses and motor lorries other than those used in a business of running them on hire (N.E.S.A.) 30 % E(1A) Motor buses, motor lorries and motor taxis used in a business of running them on hire 40 % The difference between the rate of depreciation admissible to, almost, the same class of assets lies not only in the use they are put to but also in the type of business they are used in. Motor buses and motor lorries being used in a business other than the business of running them on hire would be allowed depreciation at the rate of 30% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d keeps company with. It is a matter of common knowledge that 'motor taxis' are used in the business of running them on hire only. That is the common sense meaning assigned to the word 'taxi'in day to day human behaviour. Motor buses and motor lorries in Entry E(1A) have been used in the company of the term 'motor taxis'. In that context there seems to be no good reason for assigning them a meaning different from that assignable to the term 'motor taxis'. This view seems to be supported with CBDT approach also to the subject on hand. 9. The CBDT had an occasion to consider the rate at which depreciation should be allowed in respect of motor vans as no specific rate had been provided for them under Appendix I to the Rules. The CBDT consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orries are required to be used in. The stress on business in Entry E(1A) is further strengthened by the use of the word "running" in the context of the use of the vehicle. Merely giving the vehicle occasionally, or periodically on hire and earning income from such activity, which may be incidental to a business other than the business of running the vehicles on hire, would not entitle the vehicle for depreciation at 40% under item E(1A). The case would fall under item D(9) only. It is trite law that the provisions in a statute should be so construed as do not cause violence to each other. If two provisions may be construed in a way that both can operate, in their respective fields, harmoniously without causing damage or injury to the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omers. In free time the vehicles were used in transporting assessee's goods also. Now carrying assessee's end-products to the customers, may be as per contract with them was quite incidental to assessee's business. It does not amount to using the vehicles in the business of running them on hire. It is noteworthy that in the P L A/cs only freight receipts were shown. If use of the vehicle in the business of running them on hire would, have been an activity separate and distinct from the business activity being regularly carried on by the assessee, the figures of freight received must have been arrived at after deducting the expenses in earning income from that activity, which is being claimed as a business of running the vehicle on hire. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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