1997-VIL-240-MP-DT

Equivalent Citation: [1999] 235 ITR 89

MADHYA PRADESH HIGH COURT

Date: 03.10.1997

COMMISSIONER OF INCOME-TAX

Vs

SHARMA MOTORS SERVICE

BENCH

Judge(s)  : A. K. MATHUR., DIPAK MISRA 

JUDGMENT

The assessee is deriving income from plying of buses. The AO, while completing assessment, granted depreciation at 50 per cent on the passenger buses plied by the assessee. The CIT held that the order of the AO was erroneous and prejudicial to the interest of the Revenue. Therefore, he invoked powers under s. 263 of the IT Act and set aside the order of the CIT(A) (sic) and remanded the case to the AO. On appeal by the assessee, the Tribunal, by order dt. 2nd Dec., 1993, set aside the order of the CIT and affirmed the order of the AO granting 50 per cent depreciation. Therefore, the Revenue approached the Tribunal to refer the case to this Court and accordingly the aforesaid two questions have been referred by the Tribunal.

We have gone through the record and after considering the matter, we are of the opinion that the view taken by the AO appears to be justified. The question for consideration in this case is as what is the business of the assessee. The assessee is doing transport business of transporting passengers from one place to the other. Therefore, the business of the assessee is a transport business and as all the vehicles are employed in that business, he is entitled to depreciation to the extent of 50 per cent. The relevant entry which existed at that point of time reads as under :

"Motor buses, motor lorries and motor taxies used in a business of running them on hire."

Therefore, if the assessee is doing the business of plying motor buses/motor lorries/motor taxies, then he is entitled to 50 per cent of depreciation. The paramount consideration is that he must be doing the business of running them on hire. An owner who holds a transport fleet of buses on permits for hiring them, then he will be doing a transport business and will be entitled to depreciation. Likewise, if the owner uses motor lorries for goods carriage as a regular business, then also he is entitled to depreciation. Similarly, if the owner is doing the business of giving his motor cars on hire as taxies, then also he will be entitled to get the depreciation to the extent of 50 per cent. Therefore, the view taken by the Tribunal appears to be well justified.

We, therefore, answer both the questions in favour of the assessee and against the Revenue.

 

 

 

DISCLAIMER: Though all efforts have been made to reproduce the order accurately and correctly however the access, usage and circulation is subject to the condition that VATinfoline Multimedia is not responsible/liable for any loss or damage caused to anyone due to any mistake/error/omissions.