Clipped from: https://www.taxscan.in/higher-rate-of-depreciation-available-to-vehicles-let-out-on-hire-only-if-assessee-furnish-details-itat/169772/?utm_source=izooto&utm_medium=push_notifications&utm_campaign=Depreciation
By Rasheela Basheer – On April 22, 2022 12:14 pm
The Ahmedabad bench of the ITAT has held that the assessee can avail higher rate of depreciation available to vehicles let out on hire subject to submission of details.
The assessee, M/s Jaihind Projects Ltd, was in construction business. while rejecting their claim, contended that there is nothing to demonstrate that the vehicles were let out commercially on hire. It is not the case that the assessee was engaged in the business of letting on vehicles on hire.
The department, approached the Tribunal on appeal and contended that the assessee was engaged in construction activity and is not engaged in the business of letting vehicles for hire on a commercial basis and the vehicles were not used for plying commercially.
The assessee submitted that the assessee is eligible for a higher rate of depreciation since the vehicles were give on hire and assessee has shown rental income from those vehicles.
Ms. Annapurna Gupta, Accountant Member and Shri Siddhartha Nautiyal, Judicial Member has observed that “it is a settled law that vehicles let on hire are eligible for higher depreciation, but in the instant facts, in our view there are apparent factual contradictions which leads us to conclude that the assessee has not been able to irrefutably establish whether vehicles were let out on hire on regular basis, with details of parties to whom vehicle were given on hire, duration for which vehicles were let out for hire i.e. whether vehicles were being let out on hire on a regular basis throughout the year, the purpose for which the vehicles were being used when let out on hire, the details of rental income earned from such vehicle etc. Therefore, in the interests of justice, we are restoring the file to Ld. CIT(A) to re-examine the matter afresh in light of observations made above, after giving the assessee due opportunity.”To Read the full text of the Order CLICK HERE