Higher depreciation on hire vehicles denied where the assessee failed to prove exclusive use on hire and eligible vehicle status.

Higher depreciation under the relevant Income-tax Rules entry was available only if the assets fell within the eligible vehicle category and were actually used in a business of running them on hire. The assessee failed to produce adequate evidence, such as hire agreements, separate disclosure of hire use, bills, or registration details, to show that the 14 impugned vehicles and machineries were exclusively used on hire. The record also showed that several assets were not motor lorries or similar vehicles covered by the higher rate. On these facts, the lower authorities were justified in restricting depreciation to the normal rate and disallowing the excess claim.

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Issues: Whether the assessee was entitled to depreciation at the higher rate on the 14 impugned vehicles and machineries on the footing that they were motor lorries or other eligible vehicles used in a business of running them on hire.

Analysis: The claim for higher depreciation depended on satisfying the statutory conditions governing the relevant depreciation entry under the Income-tax Rules. The assessee was required to show that the assets fell within the eligible category and were actually used in a business of running them on hire. On the facts, the assessee failed to produce adequate material such as separate disclosure of hire use, agreements, bills, or registration details to prove that the impugned assets were exclusively used on hire. The record also showed that several of the assets were not motor lorries or similar vehicles covered by the higher rate entry. In these circumstances, the lower authorities were justified in restricting depreciation to the normal rate and disallowing the excess claim.

Conclusion: The assessee was not entitled to the higher depreciation claim, and the disallowance of excess depreciation was upheld.

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