TaxTMI 
TaxTMI 
2017 (9) TMI 1856
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.... the transporter whereas in case of hiring out a vehicle, one person grants to another the enjoyment of things during a certain time for a stipulated compensation without inference of the owner. 2. The Ld. CIT(A) has erred in holding that the assessee was entitled to claim depreciation @ 30% even though the buses were being used for its own business by the assessee and it was entitled to claim depreciation @15% as per para III of appendix 1 of Rule 5 of the Income Tax Rule, 1962. 3. The appellant craves leave to add or amend the grounds of the appeal on or before the date of hearing of appeal." 3. The brief facts of the case are as under: That the Assessee company is in the business of running buses across various routes through out the State of Punjab as well as outside by way of public transports, and on its buses, the assessee company claimed higher depreciation @ 30%. However, the AO held that since the buses were used for the Assessee's company own transport business and not for hire, therefore, not entitled for higher rate on depreciation and depreciation @ 15% can only be admissible and therefore, the excess....
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....pendix I of Rule 5 of the Income Tax Rule, 1962. 5. On the other hand, the Ld. AR submitted that the instant cases are being covered by the order of Co-ordination Bench, ITAT Amritsar itself in the case of M/s Dabwali Transport Co. Ltd. Vs. DCIT, Circle-II, Bathinda reported at [2017] 163 ITD 579 (Amritsar Trib.) Further, it was submitted by the Ld. AR of the assessee that fundamentally the issue at hand is whether the buses used by the assessee in the business of transport constitute use of buses for hire or not as the Schedule for depreciation provides two different rates for the same and the basic fundamental for prescribing two different rates on the basis of the use of the asset is that when the buses will be used for hire they will tend to wear down quickly and therefore, the rate of deprecation in those cases should be higher. Further, in order to understand the issue, one needs to explore the meaning of the word 'hire'. Following definitions were reviewed from different dictionaries: * Oxford Dictionary "obtains the temporary use of (something) for an agreed payment." * Merriam Webster Diction....
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....rning a passenger traveling by a bus is entirely different in as much as the passenger has no discretion whatsoever because the bus will ferry passenger between fixed points, stops at the predetermined stations without carrying for the convenience of an individual passenger and will operate during the fixed time schedule only. Therefore, it is misnomer to describe this as hiring of bus by a passenger or number of passengers. In fact a passenger traveling by a bus purchases only a right to travel between the fixed points at the terms and conditions of the transporter. As opposed to this if the bus is hired by a person or a group of persons then the same will ply between the points determined by such persons and the timing of their choice. This right to run the bus at convenience of the person hiring is missing when a person travels as an ordinary passenger as against the person hiring one. In the instant case, the assessee company engaged in the business of running buses on various routes across the state of Punjab and outside by way of public transports, and its buses are engaged in the same business. The administrative control over the buses remains enti....
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....a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stage of the journey." As in the instant cases, the buses are registered under the Motor Vehicle Act, 1939 as 'stage carriage' or " contract carriage" and even other wise the judgment of High Court of Kerala in the case of Balkrishna Transports reported at [1998] ITR 133 while dealing the same subject matter as in the instant case was pleased to held as under: "The assessee was a partnership firm engaged in transport activity. The transport activity was a regards plying of transport buses carrying passengers on different routes determined by the transport authorities. The passengers who travel in such buses travel on hire. This would obviously mean that the buses in regard to which depreciation was claimed would have to be understood in the necessary context of the situation with regard to the claim for depreciation that the buses were running on hire. It may be that in a given situation it must be an individual, in another si....