Higher depreciation for motor lorries depends on actual hire use, not mere booking of transportation income.

Higher depreciation for motor lorries applies only if the vehicles are actually used in the business of running them on hire, not merely because transportation income is shown in business accounts. The Court found that the earlier authorities had not applied this statutory test to the facts, so the issue required fresh consideration on actual business use. The matter was remitted for de novo examination, and no final finding was recorded on the assessee's entitlement to the higher rate of depreciation; the High Court's decision was set aside and the claim left open for reconsideration.

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Issues: Whether the assessee was entitled to depreciation at the higher rate applicable to motor lorries used in a business of running them on hire under Appendix I to the Income-tax Rules, 1962.

Analysis: The higher depreciation rate depends on whether the vehicles are used in the business of running them on hire, and not merely on the inclusion of transportation income in business income. The earlier authorities had not examined the claim by applying this statutory test. The matter therefore involved a substantial question of law requiring fresh consideration on the actual business use of the vehicles.

Conclusion: The matter was remitted for de novo examination, and no final finding was recorded on the assessee's entitlement to the higher rate of depreciation.

Final Conclusion: The High Court's decision was set aside and the claim to higher depreciation was left open for fresh adjudication by the appellate authority.

Ratio Decidendi: Entitlement to a higher depreciation rate for motor lorries turns on proof that the vehicles were actually used in a business of running them on hire, and not merely on the receipt or accounting treatment of transportation income.

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