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Issues: Whether the assessee was entitled to higher depreciation at 30% on pay loaders, dozers and water tankers used in its transport operations on the ground that the vehicles were used in the business of running them on hire.
Analysis: The assessee's agreement with the transport contractor showed that the vehicles were deployed for loading, transporting and allied work in the course of transporting coal and iron ore, and that the activity had an element of hire. CBDT Circular No. 652 clarified that the higher rate of depreciation is available not only when motor lorries are hired out to others, but also when they are used in the assessee's business of transportation of goods on hire. The Court treated the circular as enlarging the literal scope of the entry in Appendix I and relied on prior decisions holding that dumpers and pay loaders used for transporting goods of others qualify for the higher rate.
Conclusion: The assessee was entitled to higher depreciation at 30% on the vehicles in question and the Revenue's objection was rejected.
Ratio Decidendi: Vehicles used by an assessee in the business of transporting goods on hire fall within the scope of the higher depreciation entry, even if they are not separately hired out to another person.
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