COMMISSIONER OF INCOME TAX Vs. S SUDHAKAR

JUDGEMENT

(1.) THE assessee purchased a bus for a consideration of Rs. 1,50,000 on April 3, 1979, from Mariappa Bus Service and claimed depreciation on the entire purchase value in respect of the said bus. THE Income-tax Officer did not allow depreciation on a sum of Rs. 30,000 representing one fifth of the sale consideration as the value of the route permit and treated the balance of Rs. 1,20,000 as the cost of the bus and he allowed depreciation to that extent. On appeal, the Appellate Assistant Commissioner directed the Income-tax Officer to allow the depreciation on the entire amount of Rs. 1,50,000 being the purchase consideration for the bus and allowed the assessee's appeal. On further appeal, the Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner and on that this reference has arisen.

(2.) AT the instance of the Revenue, the following question has been referred to us :