Higher depreciation for hire vehicles depends on proof of actual hire use and hire income; matter remitted for fresh enquiry.

Higher depreciation for lorries under the hire-vehicle entry was not available on the existing record because the books did not show hire income for the relevant years and the factual basis for use of the vehicles on hire was not clearly established. The assessing authority had denied the claim on that ground, while the appellate authority and Tribunal relied mainly on other assessment orders without addressing the distinguishing facts for the years in question. The matter was remitted for fresh enquiry into whether the lorries were actually used for hire and whether income from hiring had been earned.

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Issues: Whether the assessee was entitled to claim depreciation at 40 per cent on lorries under the hire-vehicle entry when no hire charges were accounted for in the relevant assessment years.

Analysis: The assessing authority had denied the higher depreciation on the footing that, for the two assessment years in question, the books did not show any hire income from the 18 lorries and there was no material to establish that they were used for hire. The appellate authority and the Tribunal had proceeded largely on the basis of earlier and later assessment orders without examining the distinguishing feature noticed by the assessing authority for these assessment years. The governing entry permits the higher rate only where the vehicles are used for hire, and the record before the Court did not clearly establish that necessary factual foundation.

Conclusion: The assessee was not finally held entitled to the higher depreciation on the existing record; the matter required fresh enquiry on whether any income had been earned by hiring out the lorries, and the issue was remitted for that purpose.

Final Conclusion: The appeals resulted in a remand for reconsideration of the factual basis for claiming the higher depreciation rate on the lorries.

Ratio Decidendi: A higher depreciation rate for vehicles used on hire can be allowed only when the factual foundation of hire use and related income is established on the record; if that foundation is not examined, the matter may be remitted for fresh enquiry.

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