Commissioner of Income-tax, Central-I, Kolkata v. M/s. Ideal Financing Corporation Ltd - 2015-LL-0409-21

Citation	2015-LL-0409-21
Appellant Name	Commissioner of Income-tax, Central-I, Kolkata
Respondent Name	M/s. Ideal Financing Corporation Ltd.
Court	HIGH COURT OF CALCUTTA
Relevant Act	Income-tax
Date of Order	09/04/2015
Assessment Year	2004-05, 2005-06
Judgment	View Judgment
Keyword Tags	higher rate of depreciation • business of transportation • higher depreciation • tax effect
Bot Summary:	Whether the Tribunal below was justified in granting higher rate of depreciation to the assessee when the assessee is engaged in the business of leasing out of vehicles Mr. Bandopadhyay, learned Advocate for the appellant has fairly drawn our attention to the CBDT Circular No. 652 dated 14th June, 1993 which provides as follows :- Higher depreciation will also be admissible on motor lorries used in the assessee s business of transportation of goods on hire. The higher rate of depreciation will not apply if the motor buses, motor lorries, etc. Are used in some other non-hiring business of the assessee. 2 The question formulated at the time of admission of the appeal is by the aforesaid circular squarely answered in favour of the assessee. The question does not contemplate a situation where the vehicle is used for non-hiring purpose. Mr. Bandopadhyay very frankly suggested that the Assessing Officer had arrived at a finding that the vehicles of the assessee are used for non-hiring purpose but the finding was upset both by the CIT and the Tribunal. When the question formulated at the time of admission of the appeal has to be answered in favour of the assessee, the tax effect assumes a secondary role.

IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) Original Side Present : Hon ble Justice Girish Chandra Gupta And Hon ble Justice Arindam Sinha 9th April, 2015 ITA 26 of 2009 C.I.T, Central-I, Kolkata Vs. M/s. Ideal Financing Corporation Ltd. Mr. R.N. Bandopadhyay, Advocate with Mrs. Jyotsna Roy Mukherjee, Advocate for appellant Mr. F. Gaffar, Advocate for respondent Court :- appeal was admitted on following question of law was formulated pertaining to Assessment Years 2004-05 and 2005-06. Whether Tribunal below was justified in granting higher rate of depreciation to assessee when assessee is engaged in business of leasing out of vehicles ? Mr. Bandopadhyay, learned Advocate for appellant has fairly drawn our attention to CBDT Circular No. 652 dated 14th June, 1993 which provides as follows :- 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 . 2 question formulated at time of admission of appeal is by aforesaid circular squarely answered in favour of assessee. question does not contemplate situation where vehicle is used for non-hiring purpose. Mr. Bandopadhyay very frankly suggested that Assessing Officer had arrived at finding that vehicles of assessee are used for non-hiring purpose but finding was upset both by CIT (Appeals) and Tribunal. Mr. Gaffar however submitted that appeal so admitted is incompetent because necessary tax effect is not there. When question formulated at time of admission of appeal has to be answered in favour of assessee, tax effect assumes secondary role. . Therefore, question is answered in affirmative and against revenue. appeal is thus disposed of. (Girish Chandra Gupta, J.) (Arindam Sinha, J.) ANC. Commissioner of Income-tax, Central-I, Kolkata v. M/s. Ideal Financing Corporation Ltd

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