SANGEET LODHA, J. - (1.) THIS reference has been made by the learned Income -tax Appellate Tribunal, Jaipur Bench, Jaipur (in short 'the Tribunal' hereinafter) under Section 256 of the IT Act, 1961 (in short the Act' hereinafter), at the instance of Revenue, whereby the following question of law arising out of the order dt. 28th Oct., 1988 in ITA Nos. 461 and 462/Jp/1987 has been referred for the opinion of this Court: Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to depreciation on trucks at the rate of 40 per cent as against 30 per cent allowed by the ITO.
(2.) BRIEFLY stated the facts of the case are that the respondent assessee is a contractor engaged in business of construction of roads and buildings. During the relevant asst. yrs. 1981 -82 and 1982 -83, the assessee claimed depreciation on two trucks owned by it at the rate of 40 per cent. The claim of the assessee was allowed by the AO for both the years i.e., 1981 -82 and 1982 -83 vide assessment orders dt. 27th Aug., 1982 and 28th March, 1983 respectively. However, later on it was found that the excessive depreciation at the rate of 40 per cent has been allowed to the assessee instead of 30 per cent allowable under the law, therefore, in order to withdraw the excessive depreciation, the assessment proceedings were reopened under Section 147 of the Act. After due consideration, the AO passed the reassessment orders dt. 26th July, 1985 and 27th July, 1985 for the asst. yrs. 1981 -82 and 1982 -83 respectively. The AO arrived at the findings that only those assessees, who carry on business of the transportation, are entitled for depreciation at the rate of 40 per cent on trucks/dumpers. It was found that the assessee's main business is not transportation but it is a building contractor and plies the trucks for its own business but sometimes when spare same are let on hire, therefore, the depreciation at the rate of 40 per cent cannot be allowed. Accordingly, the depreciation was restricted by the AO to 30 per cent on both the trucks.
(3.) BEING dissatisfied with the orders passed by the AO, the respondent assessee preferred appeals before the Commissioner of Income -tax (Appeals) Rajasthan Jaipur [in short 'CIT(A)']. The appellate authority while disposing of the appeal by a common order dt. 19th Feb., 1987, by merely recording its ipse dixit held that assessee is entitled to depreciation at the rate of 40 per cent and accordingly directed the ITO to allow the depreciation.;