Aircraft depreciation at 40% upheld where the depreciation schedule covers aeroplanes and binding precedent supports the higher rate.

Aircraft owned by the assessee were held to fall within the relevant depreciation entry for aeroplanes, and the applicable schedule was construed by the jurisdictional High Court to allow depreciation at 40% rather than 15%. That interpretation had also been followed in the assessee's earlier years, making the lower rate adopted by the Assessing Officer unsustainable. The departmental appeals therefore failed, and the higher depreciation rate was confirmed in favour of the assessee.

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Issues: Whether depreciation on aircraft owned by the assessee was allowable at 40% under the depreciation schedule, or at 15% as applied by the Assessing Officer.

Analysis: The aircraft fell within the relevant depreciation entry for aeroplanes. The schedule had been interpreted by the jurisdictional High Court to permit 40% depreciation on such aircraft, and the same view had already been applied in the assessee's own earlier years. Following that binding and consistent line of authority, the lower rate adopted by the Assessing Officer was not sustainable.

Conclusion: Depreciation on the aircraft was correctly allowable at 40%, and not 15%, in favour of the assessee.

Final Conclusion: The departmental appeals failed because the allowable depreciation rate on the assessee's aircraft was governed by the higher rate recognised in the applicable depreciation schedule as interpreted by the jurisdictional High Court and followed in the assessee's own case.

Ratio Decidendi: Where aircraft are covered by the relevant depreciation entry and the jurisdictional High Court has construed that entry to permit 40% depreciation, the higher rate must be applied consistently.

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