Commr.Of Income Tax,Gujarat vs Gupta Global Exim (P) Ltd on 6 May, 2008
2. The next question raised pertains to 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 Rule 5 of the Income
Tax Rules. However, we notice that higher rate of depreciation is
available for motor bus, motor trailers and motor taxies used in the
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business of running them on hire. Even though counsel for the
assessee has relied on decision of Supreme Court in COMMISSIONER
OF INCOME-TAX VS. GUPTA GLOBAL EXIM P. LTD. reported in
(2008) 305 ITR 132, we do not think the decision of the Supreme Court
supports assessee's case because in that case the claim of the assessee
was that besides trading in timber, assessee was letting out the truck on
hire. On the other hand, in this case assessee being a contractor has
used the equipments 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 assessee's
own business. Since the items were predominantly used in assessee's
own business, we feel assessee is entitled to depreciation only at
normal rate which is granted. Consequently appeal is dismissed.