TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the assessee was entitled to development rebate on new cars and lorries used in the vehicle-hiring business; (ii) Whether depreciation on those vehicles was allowable at the rate applicable to motor-taxis instead of motor-cars.
Issue (i): Whether the assessee was entitled to development rebate on new cars and lorries used in the vehicle-hiring business.
Analysis: Income from hiring vehicles formed part of the assessee's business and was computable under section 10 of the Income-tax Act, 1922, because hiring was carried on as a business activity and not merely as a source of income falling under the head of other sources. The restriction in section 12(3) against development rebate applied only where the hiring was otherwise than in the course of business. Replacement of the vehicles in such a business stood on the same footing as installation of new plant and machinery for the purpose of development rebate.
Conclusion: The assessee was entitled to development rebate on the new cars and lorries, and the answer to this issue was in favour of the assessee.
Issue (ii): Whether depreciation on those vehicles was allowable at the rate applicable to motor-taxis instead of motor-cars.
Analysis: Rule 8 distinguished between motor-cars and motor-taxis, prescribing different rates of depreciation for each class. A motor-taxi was understood as a vehicle available for hire to the public generally, whereas the vehicles in question were hired only to a single customer and were not registered as motor-taxis. They therefore did not fall within the taxi category for the higher rate.
Conclusion: The higher rate of depreciation was not admissible, and the answer to this issue was against the assessee.
Final Conclusion: The reference was answered partly for the assessee and partly for the revenue, with development rebate allowed but depreciation restricted to the rate applicable to motor-cars.
Ratio Decidendi: Where vehicle hiring is carried on as a business, the resulting income is assessable under the business head and the vehicles used in that business qualify for development rebate as plant or machinery; a vehicle hired only to a particular customer is not a motor-taxi for the purpose of higher depreciation.
TaxTMI 
TaxTMI 
