Tribunal grants higher depreciation for leased vehicles used for hire, citing business purpose.

The Tribunal allowed the appeal, overturning the lower authorities' decision to allow depreciation at 15% instead of 30% on vehicles leased out by the assessee for the assessment year 2006-07. The Tribunal considered motor cars used for hire as equivalent to motor taxis, entitling them to higher depreciation based on relevant case laws and legal precedents, emphasizing the business purpose of leasing such vehicles.

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Issues:
1. Dispute over depreciation rate on hired out vehicles.

Detailed Analysis:
1. The appeal was against the order of the CIT(A) confirming the AO's decision to allow depreciation at 15% instead of 30% on vehicles leased out by the assessee for the assessment year 2006-07.
2. The assessee argued that the issue was settled in their favor by the jurisdictional High Court and apex court decisions, citing relevant cases.
3. The Departmental Representative supported the lower authorities' decision, stating that higher depreciation is only allowed for motor taxis, not motor cars.
4. The counsel pointed out that normal depreciation is for motor cars not used for hire, while higher depreciation is for motor taxis used for hire, emphasizing that motorcars used for hire should be considered motor taxis.
5. The Tribunal reviewed arguments and materials, noting the High Court's decision in favor of higher depreciation for vehicles used for business purposes like leasing.
6. Referring to relevant case laws, including the apex court's decision, the Tribunal concluded that when motor cars are used for hire, they should be considered motor taxis and entitled to higher depreciation, allowing the appeal.

This detailed analysis highlights the key arguments, legal precedents, and the Tribunal's reasoning behind allowing higher depreciation for motor cars used in the business of running them on hire.

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