Delhi High Court
Commissioner Of Income Tax-21 vs Mr. Sarkar Nath Oberoi on 24 November, 2014
* IN THE 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. The first issue raised in the present appeal relates to additions
made by the Assessing Officer under Section 40(a)(ia) of the Income
Tax Act, 1961 on the ground that the tax deducted at source was
deposited with the government after the end of the relevant Assessment
Year. It is accepted by revenue that the tax deducted at source was
deposited before the due date of the filing of the return. In view of this
admitted factual position, the question has to be decided against the
appellant revenue in view of the 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. The respondent assessee would be
entitled to benefit of the proviso added to Section 40(a)(ia) vide Finance
Act, 2010. Thus, the disallowance under Section 40(a)(ia) cannot be
sustained.
2. The second issue raised in the present appeal relates to the issue of
rate of depreciation on trucks. Tribunal has relied upon Circular No. 652
dated 14.06.1993 issued by the Central Board of Direct Taxes (CBDT)
which is applicable. The said circular reproduced in [1993] 202 ITR 55
(ST.) 55, reads:-
"Subject: Section 32 of the Income-tax Act, 1961 -
Rate of depreciation on motor lorries used in the
business of transportation of goods - Regarding.
Under sub-item 2(ii) of Item No. III of Appendix I to
the Income Tax Rules, 1962 higher rate of
depreciation is admissible on motor buses, motor
lorries and motor taxis used in a business of running
them on hire. A question has been raised as to
whether, for deriving the benefit of higher
depreciation, motor lorries must be hired out to some
other person or whether the user of the same in the
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 a 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 the
assessee's business of transportation of goods on hire.
The higher rate of depreciation, however, will not
apply if the motor buses, motor lorries, etc. are used in
some other non-hiring business of the assessee".
3. The factual findings by the Tribunal is that the assessee had
entered into contracts with the third parties for the transportation of coal,
iron etc. The aforesaid factual finding shows that the assessee was
plying the motor lorries for hire. Transportation of goods was the
business of the assessee, and was generating revenue/income. It is not
the case of the revenue that the respondent assessee was plying the
motor lorries for transporting goods belonging to the assessee. The
Supreme Court in Commissioner of Income Tax Vs. Gupta Global
Exim (Pvt.) Ltd., [2008] 305 ITR 132 (SC) has held that the true test
which should be applied, is whether the assessee was in the business of
transportation and the vehicles were used for the said business. This
would show whether the vehicles were run on hire. The said test has
been rightly applied in the present case.
4. In view of the factual findings recorded by the Tribunal, we do not
see any reason to issue notice on the second issue. The appeal is
accordingly dismissed.
(SANJIV KHANNA)
JUDGE
(V.KAMESWAR RAO)
JUDGE
NOVEMBER 24, 2014/akb
