N.D. JOSEPH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) WE have heard advocate Sri P. Balakrishnan appearing for the appellant and standing counsel appearing for the respondent. Of the three issues raised in the appeal filed by the assessee, we notice that the first two pertain to estimation of income under various heads which got modified by the two appellate authorities. We do not find any substantial question of law arising in regard to estimation of income under two items covered by question Nos. 1 and 2.

(2.) THE next question raised pertains to the assessee's claim for higher rate of depreciation on tipper trucks and JCB mainly used for own business and partly let out to other parties. Counsel for the appellant submitted that occasional letting out of the tipper trucks and JCB entitles the assessee for higher rate of depreciation under item 3 of Appendix I of the depreciation schedule under r. 5 of the IT Rules, 1962. However, we notice that higher rate of depreciation is available for motor bus, motor trailers and motor taxies used in the business of running them on hire. Even though counsel for the assessee has relied on decision of the Supreme Court in CIT vs. Gupta Global Exim (P) Ltd. (2008) 216 CTR (SC) 368 : (2008) 7 DTR 62 (SC) : (2008) 305 ITR 132 (SC), we do not think the decision of the Supreme Court supports the assessee's case because in that case the claim of the assessee was that besides trading in timber, the assessee was letting out the truck on hire. On the other hand, in this case the assessee being a contractor has used the equipment namely, tippers and JCB for his own business and occasionally the items were let on hire earning hire charges. We are of the view that in order to entitle for higher rate of depreciation, the main use of the vehicles should be to let on hire and not to use in the assessee's own business. Since the items were predominantly used in the assessee's own business, we feel the assessee is entitled to depreciation only at normal rate which is granted. Consequently the appeal is dismissed.