Light motor vehicles treated as commercial vehicles for higher depreciation under income-tax rules, sustaining the assessee's claim.

Motor cars admitted to be light motor vehicles were treated as commercial vehicles for depreciation under section 32 of the Income-tax Act, 1961 read with Rule 5(1) and Appendix I. The relevant entry for new commercial vehicles, together with Note 6, brought light motor vehicles within the commercial vehicle category when used in the assessee's business, so higher depreciation at 50% was available. The challenge accordingly did not raise any substantial question of law, and the assessee's claim to the higher rate was sustained.

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Issues: Whether motor cars being light motor vehicles used in the assessee's business were entitled to depreciation at 50% as commercial vehicles.

Analysis: The claim for higher depreciation depended on the depreciation regime under section 32 of the Income-tax Act, 1961 and Rule 5(1) of the Income-tax Rules, 1962, read with Appendix I. The vehicles were admitted to be light motor vehicles. The relevant appendix entry for new commercial vehicles and Note 6 treated light motor vehicles within the expression commercial vehicle. On that basis, the vehicles used in the assessee's business fell within the higher depreciation category. The challenge therefore did not disclose any substantial question of law.

Conclusion: The assessee was entitled to depreciation at 50% on the motor cars and the Revenue's appeal failed.

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