Higher depreciation for motor lorries used in goods transportation on hire applies under the vehicle depreciation entry.

Motor lorries used in a transportation business qualify for higher depreciation where they are employed in running goods on hire under Appendix I to the Income-tax Rules, 1962. The Tribunal relied on the relevant depreciation entry and the Board's circular clarifying that vehicles used in the business of transporting goods on hire fall within the higher-rate category. On those facts, the lower 15% rate was not justified, and depreciation at 30% was available.

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Issues: Whether the assessee was entitled to higher depreciation at 30% on motor lorries used in its transportation business.

Analysis: The assessee's only business was transportation of goods, and the vehicles in question were used in that business. Under the relevant depreciation entry in Appendix I to the Income-tax Rules, 1962, higher depreciation is available for motor trucks used in a business of running them on hire. The Tribunal also noted the Board's circular clarifying that motor lorries used in the assessee's business of transportation of goods on hire qualify for the higher rate. On these facts, the lower rate of 15% was not justified.

Conclusion: The assessee was entitled to higher depreciation at 30%, and the Revenue's challenge failed.

Ratio Decidendi: Where motor lorries are used in the business of transportation of goods on hire, the higher depreciation rate prescribed for vehicles run on hire applies.

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