2015 (7) TMI 809

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...., petitioner has been letting out trucks to them for their use and has been submitting the returns regularly. In the returns filed, petitioner had claimed depreciation allowance at the rate of 30%. By Ext.P2, the Deputy Commissioner of Income Tax (Circle -1) Alappuzha, while assessing the income tax, under Section 143(1) of that Act, allowed depreciation allowance only at the rate of 15%. In the assessment order Ext.P2 it was held that the assessee is a contractor employed by/engaged in supply/transport of goods and in the TDS certificate, the nature of payment was noted as "Payment to Contractor". The Assessing Authority held that the payment received by petitioner was not hire charges but it was only a contract receipt for letting out lor....

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....only for depreciation allowance @ 15%. 5. I heard the learned counsel appearing for the petitioner and the learned Standing Counsel for the Income Tax Department. 6. It is clear from the order Ext.P2 that the assessment has been made on the basis of the TDS issued and Ext.P1 agreement entered into between the petitioner and the KSE Ltd. As per the agreement it is seen that the contractor had submitted a quotation offering rates for supply of trucks for a period of one year with effect from 10.6.2005 to 9.6.2005 and the company has accepted the same on the terms and conditions fixed therein. Clause (1) of the agreement provides for the rates of charges per metric tonne and the number of daily requirement of such trucks for each destina....

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....ose used in a business of running them on hire, acquired or put to use on or after the 1st day of April 1990. 15 (3) (i) Aeroplanes- Aeroengines (ii) Motor buses, motor lorries and motor taxies used 30 in a business of running them on hire." 30 8. In Ext.P2 assessment order the assessing authority limited the depreciation allowance to 15% in respect of the petitioner, only because of the TDS certificate in which the nature of payment was shown as payment to contractor and not as hire charges. The contention of the learned Standing counsel is that Ext.P1 agreement provides for the rate of charges for the vehicles per metric tonne, whereas the usual procedure is to show the charges at the rate per kilo metre. But there is no provi....