COMMISSIONER OF INCOME TAX Vs. MADAN AND CO

JUDGEMENT

(1.) THE Revenue contends that when the owner of the lorry leases it to another for an agreed rental for a specific period, the owner cannot claim the higher rate of depreciation provided in Appendix I, entry III(2)(ii), under the sub-heading "Machinery and plant", the appendix being the Appendix to the Income-tax Rules. That entry reads as under :

(2.) OWNERS of vehicles who used it for their own purposes are allowed to claim depreciation at the normal rates. OWNERS of vehicles mentioned in the entry when they allow it to be used for a price are allowed to obtain a higher rate of depreciation. The distinction is based upon the fact that a person who obtains the temporary right to use of the vehicle on payment of a charge price is likely to, by the nature of his user, such user being for the purpose of the hirer and not the owner, depreciate the value of the vehicle faster.

(3.) IS therefore, answered in favour of the assessee, and against the Revenue.