- (1.) THE Revenue filed this application under s. 256(2) of the IT Act, 1961 (for short, `the Act, 1961') and prayed for the direction to the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter shall be referred to as `the Tribunal') to state the facts and refer the following question to this Court for opinion. "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that assessee is entitled to depreciation at the higher rate of 40 per cent and not 30 per cent on the trucks used by assessee for its business ?"
(2.) THE facts leading to filing of this application, briefly stated, are that the assessee M/s Bansiwala Iron & Steel Re-rolling Mills, Ajmer (for short, `the assessee') is a registered firm carrying on its business of manufacturing of bars, and flats from the raw material of semi-finished ingots and iron scrap. THE assessee had purchased a truck for its own business purpose and not for plying on hire and the assessee is not carrying on transporter business. In the return for the asst. yr. 1982-83 the assessee non-petitioner claimed the depreciation at the rate of 40 per cent on the truck trailor No. 7585. The AO under its order dt. 6th March, 1985, has not accepted this claim made and allowed the depreciation on the truck trailor No. 7585 at the rate of 30 per cent. The assessee non-petitioner against that order of the AO filed an appeal before the Commissioner of Income-tax(Appeals), Rajasthan-I, Jaipur [for short, `the CIT(A)] and challenged the depreciation allowed only at the rate of 30 per cent instead of 40 per cent. The CIT(A) held that the business of the assessee is not of a transporter and the truck is also utilized by the assessee for its own business. It was also observed that log book was maintained for use of the truck to show that it was meant for transporting the goods belonging to others and the claim of the assessee was rejected. The assessee non-petitioner carried the matter in the second appeal before the learned Tribunal. The learned Tribunal held that the assessee has the income from plying of truck and there was an income from hiring along with the other business done by the assessee. The depreciation to the extent of 40 per cent was allowed on the truck trailor No. 7585 The Revenue filed an application under s. 256(1) of the Act, 1961, before the learned Tribunal and prayed therein for reference of the aforesaid question to this Court for opinion. That application was rejected. Thus, this application. Mrs. Parinitoo Jain, the learned counsel for the Revenue, contended that the question aforesaid is a question of law which involved in this case and the learned Tribunal has committed a serious error in not referring the same for opinion of this Court. It has next been contended that Manjeet Stone Company's case has no application to the present case on which reliance was placed by the learned Tribunal while deciding the matter in favour of the assessee. Mrs. Jain submitted that reference of Manjeet Stone Company's case is wholly irrelevant. That matter has been considered by this Court in CIT vs. Manjeet Stone Co. (1991) 91 CTR (Raj) 239 : (1991) 190 ITR 183 (Raj) and the question referred to this Court has been decided against the assessee. Mr. S.K. Jain, the learned counsel for the assessee, contended that the Act, 1961 does not lay down that 40 per cent depreciation is only allowable to the transporters and not to anybody else. The depreciation rates provided in Appendix I, in his submission, simply states that depreciation on motor buses and motor taxies used in a business of running them on hire is to be allowable at 40 per cent as against the depreciation of 30 per cent in the case of motor buses and motor lorries other than those used in a business of running them on hire. Mr. Jain urged that from plain reading of Appendix I it cannot be concluded that the truck and lorries should be utilized exclusively for the purpose of plying on hire and that vehicles were being partly used for business purposes, which entitle the assessee to the higher rate of depreciation. On facts, Mr. Jain submitted that out of total receipts of Rs. 91,078, Rs. 60,000 was earned from hire business and Rs. 30,545 were for his personal goods. The truck is registered as a public carrier and not as a private carrier and thus the assessee is entitled to carry the public goods. The facts of CIT vs. Manjeet Stones Co.'s case (supra) are although different than the facts of this case. We have given our thoughtful consideration to the rival contentions raised by the learned counsel for the parties.
(3.) THE learned Tribunal in para No. 6 of its order held that the facts as it emerges out of the order of the AO and the appellate authority, the assessee has income from plying of truck. Referring to the relevant rules the learned Tribunal held that they clearly provided that in case the trucks being used for hire, then the depreciation allowable is at the rate of 40 per cent. Thus, on the question of fact whether the truck, in this case the trailor, has been plied on hire or not on the basis of material produced on record the learned Tribunal recorded a finding of fact that the truck trailor has derived the income and that income, if we go by the facts, as we find, is Rs. 91,078 for five and half months, out of which Rs. 60,000 was earned from hire business and Rs. 30,545 were for the personal goods of the assessee. It is true and as what it is held by this Court in the case of CIt vs. Manjeet Stone Co. (supra), the registration of truck as a public carrier will not affect the eligibility to depreciation under the relevant entries. But, nevertheless, the important fact is that the truck has been plied on hire and substantial income has been drawn. In the case aforesaid this Court held that if a small portion of its income is received from the business of hiring from two or three transactions of hiring, then it will not make the business of the assessee as one of hiring the trucks. That makes a distinction in these two cases. At the costs of repetition we are to state that as against the total receipts of Rs. 91,078 for five and a half month, Rs. 60,000 were earned from hire business of truck and Rs. 30,545 were for personal goods. Thus, 2/3rd receipts were from hire of truck. Yet, there is another distinguishable fact in these two cases. There the Tribunal found that the business of the assessee was of quarrying and selling stones and the trucks were mainly used for carrying the stones from the mines to the sales depot. Here it is not the finding of the Tribunal that the truck was used only for the purpose of carrying the raw material and of the manufactured goods of the assessee. On the other hand, on the basis of the material which has come on record the learned Tribunal has recorded a finding of fact that the assessee had income from plying of truck. It is not a pure question of law but it is a mixed question of law and fact. As per the case of CIt vs. Manjeet Stone Co. (supra) also it is not necessary that unless the assessee undertakes the transportation business 40 per cent depreciation cannot be allowed. The insistence and thrust was upon the fact that whether there is any income from hiring of the truck, with the exception that a nominal income may not be taken as income from hiring of the truck. In this case, on the material produced on the record, the finding of fact has been recorded by the learned Tribunal that the assessee has receipts from hiring of the truck and that, as said earlier, is also substantial, which is not a perverse finding. Taking into consideration the matter from any angle we are satisfied that no question of law does arise in the matter for our consideration. As a result of the aforesaid discussion, this application fails and the same is dismissed. No order as to costs. ;