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TMI Blog2010 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... cars are used in the business of running them on hire the assessee would be entitled to higher rate of depreciation as per Entry No. III(3)(ii) - Appeal is allowed - - - - - Dated:- 8-1-2010 - Member(s) : G. D. AGARWAL., B. R. MITTAL. ORDER-G.D. AGRAWAL, VICE PRESIDENT: The appeal of the assessee for asst. yr. 2006-07 presented before the Tribunal on 13th Oct., 2009 is directed against the order dt. 18th Aug., 2009 of the learned CIT(A), Central-I, Kolkata. 2. Ground No. 1 of the assessee's appeal reads as under: "1. That the learned CIT(A) erred in having confirmed the action of the AO in having allowed depreciation @ 15 per cent as against 30 per cent on hired out vehicles." The other grounds are only in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s below. He submitted that the learned CIT(A) has recorded the finding that higher rate of depreciation is allowed only when the motor taxis are leased out. The assessee has leased out only motor cars on which no higher rate of depreciation is allowed. He, therefore, submitted that the order of the learned CIT(A) should be sustained. 5. The learned counsel for the assessee in the rejoinder referred to the depreciation table and pointed out that as per the depreciation table the normal rate of depreciation is provided on motor cars other than those used in the business of running on hire. While higher rate of depreciation is provided on motor buses, motor lorries, motor taxis used for business of running them on hire. Thus when the motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation. Sec. 32 requires that the asset should be used for the purpose of the assessee's business and the entry under the Appendix refers to the user it should be put to. 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 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 business and the assessee is bound to get the benefit under such Appendix I and thereby should get the benefit of receiving the percentage of depreciation at higher rate which is specified in the said entry at 40 per cent. 7. Conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffer from the principle laid down by the said decision and furthermore, the decision of this High Court has also been taken note of by the Delhi High Court and the said order has also been confirmed by the Supreme Court and we have to take note of by the Delhi High Court and the said order has also been confirmed by the Supreme Court and we have to take note of that in deciding the question after placing such facts on record; the Supreme Court indirectly affirmed the order so passed by the Delhi High Court in Bansal Credits Ltd. Therefore, in our considered opinion, the questions which are to be answered in this matter have to be in favour of the assessee and we do not find that there is any reason to differ from the decision of the Delhi H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing them on hire. - 30%" 6.4 From the above, it is evident that the assessee is entitled to normal rate of depreciation i.e., 15 per cent on the motor cars other than those used in the business of running them on hire. Thus in respect of motor cars which are used in the business of running them on hire the assessee is out of the purview of the normal rate of depreciation of 15 per cent as provided in Entry No. III(2) of the depreciation table. As per Entry No. (3)(ii) the depreciation is allowable on the motor taxis used in the business of running them on hire. The contention of the Revenue is that the assessee would fall in this category only if motor taxis are used in the business of running them on hire and not motor cars. We are unab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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