USHA JOHNSON Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These two appeals have been filed by the assessee under Income-tax Act , challenging the orders dated 14.11.2014 of the Income Tax Appellate Tribunal, Cochin Bench, Cochin in I.T.A.Nos.123 and 124 of 2012. The dispute relates to assessments for the years 2006-07 and 2007-08. The only legal issue which arises for consideration in these appeals is whether the petitioner is entitled to claim depreciation on the vehicles which have been supplied to the Indian Oil Corp. Ltd. and Bharat Petroleum Corporation Ltd., under a contract for transporting LPG cylinders, at the rate of 30% instead of 15%. According to the assessee, the nature of the business is hiring of vehicles which entitles her to claim depreciation at the higher rate of 30%. According to the Department, the nature of the business is "transport contract business" and hence the assessee is entitled to claim depreciation only at the rate of 15%. The Assessing Officer in Annexure A order dated 20.2.2009, found that the assessee had claimed depreciation at the rate of 40% as against 30% admissible. The Commissioner of Income Tax, in exercise of powers under Section 263 of the Income Tax Act, revised the assessments as per Annexure B order dated 28.1.2011, on the ground that they are prejudicial to the revenue. According to the Commissioner, depreciation was allowable only at the rate of 15% and not 30%. The assessee challenged the order in appeal before the Tribunal. The Tribunal by order Annexure E dated 26.4.2013 dismissed the appeal on the ground of delay. By Annexure F order in ITA Nos.194 and 195 of 2013, this Court set aside the order of the Tribunal and remitted the appeal to the Tribunal for disposal on merits. Thereafter the Tribunal issued Annexure G order dated 14.11.2014. The Tribunal found that the assesse is not engaged in the business of running the vehicles on hire and rejected the claim of the assessee.

(2.) Heard Sri Kuryan Thomas on behalf of the Appellant and Sri Christopher Abraham, Standing Counsel for the Income Tax department.

(3.) The relevant entry in the table of rates at which depreciation is admissible reads thus: