INCOME-TAX OFFICER Vs. SAROJINI TRANSPORTS (P ) LTD

JUDGEMENT

(1.) This appeal by the revenue relates to the assessment year 1981-82. The assessment order states that the assessee, a private limited company, carries on business of plying transport buses. The ITO has observed that the assessee had claimed depreciation at 40 per cent on buses. The ITO stated that depreciation at this rate can be allowed only on buses which were let on hire. since the assessee cannot be said to be carrying on business of letting the buses on hire, according to the ITO, only 30 per cent depreciation could be granted. The assessee appealed and submitted before the Commissioner (Appeals) that depreciation should have been allowed at 40 per cent. The Commissioner (Appeals) was of the view that when a bus is registered and operated as a public carrier, as distinguished from private carrier then it has to be considered that the bus was let out on hire. He, therefore, allowed the appeal.

(2.) The revenue is aggrieved. The submission of the learned departmental representative is that 40 per cent is admissible only if the whole bus was hired out. The present is not such a case. If people took single tickets and travelled in the bus, according to the learned departmental representative, it could not be said that they were hiring out a bus.

(3.) The submission of the learned counsel was that with reference to the various provisions of the Motor Vehicles Act, 1939, it was clear that in the present case on the facts the assessee carried on the business of plying buses on hire and was, thus, entitled to depreciation at 40 per cent. It was also submitted that the Tribunal in IT appeal No. 787 (Mad.) of 1984, dated 16-11-1984 had in essence taken a similar view. That was a case arising under the provisions of section 154 of the Income-tax Act, 1961 (the Act), and according to the learned counsel, the Tribunal had held that where depreciation was originally granted at 40 per cent in a business of this type, there was no mistake apparent from records, which would merit reduction of the same to 30 per cent.