COMMISSIONER OF INCOME TAX Vs. DELHI AIRPORT SERVICE

JUDGEMENT

(1.) AT the instance of Revenue, following questions have been referred for opinion of this Court under s. 256(1) of the IT Act, 1961 (for short the 'Act'), by the Income tax Appellate Tribunal, Delhi Bench 'E', New Delhi (for short the 'Tribunal') :

(2.) FACTUAL position in nutshell is as follows. Assessee, a partnership firm at the relevant point of time, was carrying on business of transport bus service. The buses were air conditioned. It was claimed before the ITO that the entire vehicle was one and the air conditioner was an integral part thereof and consequently it was entitled to depreciation @ 30 per cent admissible on such vehicles. The AO was of the view that the value of the air conditioning machinery is to be separately ascertained and depreciation @ 15 per cent admissible on air conditioning machinery was to be allowed. Accordingly, he determined the value of the air conditioning machinery separately and allowed lower depreciation @ 15 per cent while allowing higher depreciation @ 30 per cent on the remaining value of the vehicles. Assessee preferred an appeal before the Commissioner of Income tax (Appeals) [in short 'the CIT(A)'], who accepted assessee's contention and directed allowance of depreciation @ 30 per cent on the aggregate value of the bus and the air conditioning machinery. Revenue preferred an appeal before the Tribunal. Relying on its earlier decision in the case of Smt. Urmila Goel in ITA Nos. 4887/Del/79 and 1247/Del/1977 78, CIT(A)'s views were upheld. On being moved for reference questions as set out above have been referred for opinion of this Court.