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Issues: Whether depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922 was allowable in respect of buses kept ready for use throughout the previous year, though not actually plied for more than thirty days.
Analysis: The expression "used for the purposes of the business" in section 10(2)(vi) was held to admit of a wider construction and not to be confined to active or actual working. The Court noted that the decided cases supported a liberal interpretation that includes passive user where the asset is kept ready by the assessee for use in the business and remains part of the profit-making apparatus. The buses were admittedly in working order and were retained for contract work, the only reason for non-user being lack of demand and not unfitness or non-availability. The Rules were found not to be inconsistent with this construction, because the percentage restriction operated where the asset was not available for use, while normal depreciation did not require continuous actual operation.
Conclusion: The buses were used for the purposes of the business within the meaning of section 10(2)(vi), and depreciation was allowable to the assessee.
Ratio Decidendi: An asset is "used for the purposes of the business" if it is kept ready and available as part of the business apparatus, even without continuous active operation, provided the non-use is not due to its incapacity or unavailability.
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