COMMISSIONER OF INCOME TAX Vs. BALAKRISHNA TRANSPORTS

JUDGEMENT

(1.) WITH regard to the assessment years 1983-84 and 1984-85, the question is as to whether depreciation at 40 per cent, or 30 per cent, is to be granted. In other words, the question expecting our answer is as follows :

(2.) THE first appellate authority upheld the reasoning of the Assessing Officer and observed that an individual travelling from point A to point B by a transport bus cannot claim that he has hired the bus. This would be so even with regard to a group of persons belonging to one family who travel from Trichur to Calicut in the same bus and they cannot claim that they have hired the bus since the group may consist of ten or fifteen while the capacity of the bus would be much more than that.

(3.) REALLY, the question requires consideration from the point of view of the assessee in the context. Whether the payment is made by one person or a group of persons or by individual passengers would be of total irrelevance in the context. The real question is, as to whether the assessee engaged in the business of plying vehicles as an activity uses the concerned vehicles for hire or not. It would be wholly irrelevant whether the assessee receives payments in regard to the activity of hire from a passenger, a group of passengers or an institution engaging the vehicle for its transport activity. In a given situation, an institution may engage itself in a transport activity taking the vehicles owned by someone else for plying. The mode of payment and as to whether a person makes payment or otherwise would not be a situation of relevance in the context of the consideration of the position of the assessee. The question would be the manner in which vehicles are plied. The situation of relevance would be as to whether the vehicles are running on hire or not. If there is no dispute that the vehicles are run for hire in any capacity, whether as a passenger service or as a tourist service or as a taxi service, the relevant situation is the manner in which the vehicles are run which belonged to the assessee in regard to which there is a claim for depreciation.