IN HIGH COURT OF DELHI AT NEW DELHI Date of decision: November 24, 2014 + ITA No. 720/2014 COMMISSIONER OF INCOME TAX-21 Appellant Through: Mr.Rohit Madan,Sr.Standing Counsel with Mr.Ruchir Bhatia, Advocate versus MR. SARKAR NATH OBEROI Respondent Through: CORAM: HON BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE V.KAMESWAR RAO SANJIV KHANNA, J. (Oral) 1. first issue raised in present appeal relates to additions made by Assessing Officer under Section 40(a)(ia) of Income Tax Act, 1961 on ground that tax deducted at source was deposited with government after end of relevant Assessment Year. It is accepted by revenue that tax deducted at source was deposited before due date of filing of return. In view of this admitted factual position, question has to be decided against appellant revenue in view of decision of this Court in Commissioner of Income Tax Vs. Naresh Kumar, [2014] 362 ITR 256 (Delhi), wherein, it has been held that amendment to Section 40(a)(ia) by Finance At, 2010 has retrospective effect. respondent assessee would be entitled to benefit of proviso added to Section 40(a)(ia) vide Finance ITA No. 720/2014 Page 1 of 3 Act, 2010. Thus, disallowance under Section 40(a)(ia) cannot be sustained. 2. second issue raised in present appeal relates to issue of rate of depreciation on trucks. Tribunal has relied upon Circular No. 652 dated 14.06.1993 issued by Central Board of Direct Taxes (CBDT) which is applicable. said circular reproduced in [1993] 202 ITR 55 (ST.) 55, reads:- Subject: Section 32 of Income-tax Act, 1961 Rate of depreciation on motor lorries used in business of transportation of goods Regarding. Under sub-item 2(ii) of Item No. III of Appendix I to Income Tax Rules, 1962 higher rate of depreciation is admissible on motor buses, motor lorries and motor taxis used in business of running them on hire. question has been raised as to whether, for deriving benefit of higher depreciation, motor lorries must be hired out to some other person or whether user of same in assessee s business of transportation of goods on hire would suffice. 2. In Board s Circular No. 609, dated 29th July 1991, it was clarified that where tour operator or travel agent uses motor buses or motor taxies owned by him in providing transportation services to tourists, higher rate of depreciation would be allowed on such vehicles. It is further clarified that higher depreciation will also be admissible on motor lorries used in assessee s business of transportation of goods on hire. higher rate of depreciation, however, will not apply if motor buses, motor lorries, etc. are used in some other non-hiring business of assessee . 3. factual findings by Tribunal is that assessee had ITA No. 720/2014 Page 2 of 3 entered into contracts with third parties for transportation of coal, iron etc. aforesaid factual finding shows that assessee was plying motor lorries for hire. Transportation of goods was business of assessee, and was generating revenue/income. It is not case of revenue that respondent assessee was plying motor lorries for transporting goods belonging to assessee. Supreme Court in Commissioner of Income Tax Vs. Gupta Global Exim (Pvt.) Ltd., [2008] 305 ITR 132 (SC) has held that true test which should be applied, is whether assessee was in business of transportation and vehicles were used for said business. This would show whether vehicles were run on hire. said test has been rightly applied in present case. 4. In view of factual findings recorded by Tribunal, we do not see any reason to issue notice on second issue. appeal is accordingly dismissed. (SANJIV KHANNA) JUDGE (V.KAMESWAR RAO) JUDGE NOVEMBER 24, 2014/akb ITA No. 720/2014 Page 3 of 3 Commissioner of Income-tax-21 v. Sarkar Nath Oberoi