1993 (3) TMI 159

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....r the assessee submitted that : The revisionary Commissioner erred in passing an order dated 23-3-1989 under section 263 of the Income-tax Act which is not attracted on the facts of the case as it is without jurisdiction to initiate proceedings in respect of the issue in question as it was subject matter of appeal before the Commissioner of Income-tax (Appeals). Hence the Commissioner erred in setting aside the assessment as made under section 143(3) of the Act and directing the Assessing Officer to reframe it. The Commissioner erred in holding that on the facts and circumstances of the case of the assessee, applicable rate of depreciation as admissible in respect of DLY/DLZ Cars, coaches, pick up Vans, etc., was 30% and not 40% as granted ....

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....e Income-tax Rules, Appendix I, Part I, Item-III, clauses C(7) and E(1A) are the provisions coming into play in the instant issue. Clause E(1A) clearly stipulates 40% for motor buses, motor lorries and motor taxis used in a business of running them on hire and which is squarely applicable to the facts of the present case for the reason that as per the Income-tax Rules though no depreciation claim is admissible on imported cars, if the car is used, as in the instant case, for hiring to tourists depreciation claim is fully admissible on the actual cost. The Central Board of Direct Taxes circular also clearly supports the case of the assessee. On merit itself, the order impugned deserves to be set aside, even though the Commissioner of Income-....

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.... hire from such tour operator or travel agent and that therefore, depreciation on foreign motorcar owned by him and used for providing transportation services to tourists, whether in a package tour or otherwise, should be allowed. It also further adds that where a tour operator or travel agent uses such vehicles owned by him in providing transportation services to the tourists, higher rate of depreciation should be allowed on such vehicles. No appreciable argument has been advanced by the Revenue as to how the C.B.D.T. circular is not applicable to the facts of the instant case. The intention behind the legislative provision is only to discourage use of foreign cars for the purpose of business or profession, but in order to provide the tour....