2010 (5) TMI 948

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....ndent-Bank is entitled to higher rate of depreciation at 40% in respect of motor bus purchased and leased out by it to the Madhya Pradesh Road Transport Corporation. We have heard Senior Standing Counsel appearing for the appellant and Senior counsel Sri.Joseph Markose appearing for the respondent-assessee. 2. Admittedly the normal rate of depreciation for motor bus is 25%. However, Item III(2)....

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....rted in (2003) 259 ITR 69) allowed the claim holding that end use of the vehicle when considered, entitles the assessee for higher rate of depreciation, no matter assessee was not engaged in hiring of vehicles by itself as a business. Before us, counsel for the assessee relied on the very same decision based on which Tribunal decided the case and he further contended that SLP filed against the jud....

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....tc. which really deteriorates very fast on account of extensive use. A vehicle on hire is extensively used and so much so, it's value erodes faster than a vehicle privately owned and used by somebody. Keeping this in mind, we feel a vehicle engaged in route operation suffers same erosion in value as a contract carriage let on hire. So much so, in our view, the motor buses engaged in route oper....

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....ent is entitled as owner of the vehicle which has leased it out to the Madhya Pradesh Road Transport Corporation. The depreciation Schedule only provides for rate of depreciation and does not state in whose hands the rate of depreciation provided is to be allowed. It naturally follows that whoever is entitled to depreciation as owner of the vehicle, will be entitled to the appropriate rate of depr....