KAILASH CHAND BAGARIA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE present appeal has been filed by the assessee which is a registered firm engaged in the business of manufacturing and trading in limestone. For the assessment year 1992 -93, the return was filed. It was subjected to scrutiny and notices under Section 143(2)/142(1) were issued. In the return, the assessee had claimed depreciation of Rs. 75,228 at the rate of 40 per cent. on the truck. The Assessing Officer allowed the depreciation at the rate of 25 per cent. only and disallowed the sum claimed on depreciation of Rs. 28,201 on the basis that the truck was used mainly for his own business. Aggrieved by the order of the Assessing Officer, an appeal was preferred before the Commissioner of Income -tax, Jabalpur, assailing the disallowance. The appeal was on the ground that the truck has been used by the appellant by giving it on hire and also used for business purpose. Thus, on the finding that the truck was used for hire as well as for business, depreciation of 40 per cent. was allowed. The Revenue filed an appeal before the Income -tax Appellate Tribunal. The Tribunal has allowed the appeal relying on the decision of this court in the case of Income -tax Commissioner v. Anupchand and Co. : [1999]239ITR466(MP) . The order dated October 29, 1999, passed by the Tribunal has been assailed in the present appeal on the ground that the depreciation at the rate of 40 per cent. should have been allowed not that of 25 per cent. Entry No. 2(ii) of Rule 5 of Appendix I to the Income -tax Rules, 1962, prescribes a rate of depreciation in respect of motor buses, motor lorries and motor taxis used in the business of running them on hire to be 40 per cent. It isalso urged in the appeal that the decision of this court in the case of Income -tax Commissioner v. Anupchand and Co. : [1999]239ITR466(MP) is not applicable and is distinguishable on the facts.

(2.) ON the facts it has been found by the Tribunal that the trucks are mainly used for the purpose of the assessee's own business. Therefore, the assessee is not entitled to the higher rate of depreciation, i.e., 40 per cent. and the permissible depreciation is 25 per cent. If the vehicle is used for the assessee's own business, the depreciation at that rate has to be allowed. The Income -tax Appellate Tribunal has restored the order passed by the Assessing Officer and reversed that of the Commissioner of Income -tax (Appeals). The entry in question clearly mentions that only in case the vehicle is used for hire, depreciation at the rate of 40 per cent. is permissible to be claimed. In the instant case this finding has not been assailed before us that the truck is used for the assessee's own business. Also the finding recorded by the Income -tax Appellate Tribunal is that the truck is mainly used for the assessee's own business and from the statement filed by the appellant it is clear that mainly the truck is used for the assessee's own business. The decision of this court in the case of Income -tax Commissioner v. Anupchnnd and Co. : [1999]239ITR466(MP) where this court considered the question as under (page 469) :