Depreciation on bus purchases excludes route permit value, limiting the depreciable base to the vehicle alone.

Depreciation on a bus purchased together with a route permit was confined to the value of the vehicle itself. The court applied the principle that only the actual cost of the depreciable asset qualifies, and any separate amount attributable to the route permit is excluded from the depreciable base. The purchase being for a single consideration did not alter that allocation. The Revenue's position prevailed, and the assessee was entitled to depreciation only on the bus component of the price.

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Issues: Whether depreciation on a bus purchased along with a route permit is allowable on the entire purchase price or only on the value attributable to the bus.

Analysis: The bus was purchased together with the route permit for a single consideration. The Court applied the earlier binding principle that depreciation is allowable only on the value of the vehicle and not on the amount representing the route permit. On that basis, the portion of the purchase price attributable to the permit could not form part of the depreciable cost of the bus.

Conclusion: Depreciation is allowable only on the value of the bus and not on the entire purchase consideration. The answer was therefore in favour of the Revenue and against the assessee.

Final Conclusion: The assessee was held entitled to depreciation only on the bus component of the purchase price, with the route permit value excluded from the depreciable base.

Ratio Decidendi: Depreciation is admissible only on the actual value of the depreciable asset and not on any separate value attributable to an ancillary intangible advantage such as a route permit.

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