Commissioner Of Income Tax vs Suidu Trade Links Ltd.
2003 Latest Caselaw 499 Del

JUDGMENT

D.K. Jain, J.

1. This appeal under Section 260A of the Income-tax Act,, 1961 (for short "the Act") by the Revenue is directed against order dt, 6th Sept., 2002, passed by the Income-tax Appellate Tribunal (for short 'the Tribunal') in ITA No. 4893 (Delhi) 1997, pertaining to the asst. yrs. 1995-96.

2. The short issue sought to be raised by the Revenue in this appeal, is as to whether an assessed, who has leased out the vehicles to a third party for running them on hire, is entitled to depreciation at a higher rate or not.

3. A similar issue came up for consideration of this Court in CIT v. Bansal Credits Ltd. (2003) 259 ITR 69 (Del), and it was held that where the vehicles have been leased out by the assessed for running them on hire, he is entitled to a higher rate of depreciation. In view of the said decision, the issue raised by the Revenue in the appeal does not survive for our consideration.

However, relying on our observations in Bansal Credits Ltd.'s case (supra) to the effect that before granting depreciation at higher rate, it has to be examined whether the leased out vehicles are actually being used in the business of hire or not. Mr. Sanjeev Khanna, learned senior standing counsel for the Revenue, would submit that in the present case, without examining the said aspect, the Tribunal has directed grant of depreciation at a higher rate only on the ground that the vehicles had been leased out by the assessed.

4. We do not agree with learned counsel for the Revenue for the simple reason that no such plea was sought to be raised on behalf of the Revenue before the Tribunal. As a matter of fact, it was not even AO's case that the vehicles had not been used by the lessee on hire.