TaxTMI 
TaxTMI 
2009 (4) TMI 410
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....e, it claimed depreciation on the trucks/buses at the rate of 40 per cent. The depreciation was claimed under clause (3)(ii) of Part A under the head "III Machinery and plant" of the old Appendix I. The assessee claimed deduction of a sum of Rs. 11,72,624, calculated at the rate of 40 per cent. depreciation. The return of the respondent-assessee was processed under section 143(1) of the Income-tax Act, 1961 on March 31, 1999 and the claim of the respondent-assessee was accepted. 2. Subsequently, notices were issued to the respondent-assessee under section 148 of the Income-tax Act, 1961 on March 14, 2005. Additionally, the respondent-assessee was served with a questionnaire on September 30, 2005. The respondent-assessee furnished all the i....
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....-tax Appellate Tribunal vide an order dated July 2, 2008. Through the present appeal, the Revenue has impugned the orders dated October 15, 2007 and July 2, 2008, passed by the two appellate authorities. 6. During the course of hearing, the sole controversy which emerges from determination was, whether the respondent-assessee was entitled to claim depreciation under clause (2) or clause (3)(ii) of Part A under the head "III Machinery and plant" of the old Appendix I. The Revenue asserts that the depreciation should be determined under clause (2) whereas the appellate authorities have accepted that the assessee is entitled to depreciation under clause (3)(ii). 7. Clause (2) of Part A under the head "III Machinery and plant" relied upon by ....
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.... the appellant has placed reliance on the meaning of the two terms expressed in Black's Law Dictionary, Eighth edition, wherein the term "hire" is defined as under : "hire, vb. 1. To engage the labor or service of another for wages or other payment. 2. To procure the temporary use of property, usu. at a set price. 3. To grant the temporary use of services <hire themselves out>" 10. In the same dictionary, the term "lease" is defined in the following manner : "lease, n. 1. A contract by which a rightful possessor of real property conveys the right to use and occupy the property in exchange for consideration, usu. rent. The lease term can be for life, for a fixed period, or for a period terminable at will. [Cases : Landlord and Tenan....
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.... hands of the Revenue to distinguish the term "hire" from the term "lease" is wholly unreasonable. We are also of the view that the decision rendered by the Madras High Court in CIT v. Madan and Company [2002] 254 ITR 455, which was relied upon by the both appellate authorities, was determination of the controversy as we perceive it. In this behalf, a relevant extract from the judgment rendered by the Madras High Court in Madan and Company's case [2002] 254 ITR 445 is reproduced hereunder (headnote) : "The word 'hire' used in entry No. III(2)(ii) of appendix I to the Income-tax Rules, 1962, is only meant to denote that the use of the vehicle is not by the owner himself for his own purpose, but it is given to another for use for a limited p....