Depreciation on bus-fitted air-conditioning plant follows the motor bus rate when the equipment forms an integral part of the vehicle.

An air-conditioning plant fixed in a bus was treated as an integral part of the motor bus, so depreciation was to follow the rate applicable to the bus rather than the separate rate for air-conditioning plants. The Delhi High Court noted that an earlier Division Bench had already taken the same view in connected matters involving the same assessee, and on that basis held that the proposed reference did not raise a referable question of law under the Income-tax Act. The reference application was dismissed and the Tribunal's depreciation treatment was left undisturbed.

---

---

Issues: Whether the Tribunal was in holding that an air-conditioning plant fixed in a bus formed an integral part of the bus, and whether depreciation on such air-conditioner was allowable at the rate applicable to the bus rather than the rate applicable to air-conditioning plants.

Analysis: The application sought a reference under Section 256(2) of the Income-tax Act, 1961 on questions already considered by a Division Bench in connected reference applications involving the same assessee. The earlier Division Bench had taken the view that where the parts form part of the motor bus, they are to be depreciated at the same rate as the motor bus. Following that view, the Court found that the proposed questions did not give rise to a referable question of law.

Conclusion: The reference application was dismissed, and the Tribunal's view on depreciation at the bus rate was left undisturbed.

Final Conclusion: The assessee succeeded in resisting the reference, and the matter was finally disposed of by dismissal of the petition.

Ratio Decidendi: Where an accessory or equipment is treated as forming part of the motor vehicle, depreciation is to be allowed at the rate applicable to the vehicle and no referable question of law arises merely because a separate depreciation rate exists for that equipment.

---