TaxTMI 
TaxTMI 
1993 (11) TMI 81
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....assengers are supposed to pay the bus fares and are issued tickets thereon. The assessee had claimed depreciation on these buses at the rate of 50 per cent. The ITO, however, remarked that depreciation at the rate of 50 per cent was available on buses only if such buses were run on hire. He stated that the buses in the instant case were being operated along prescribed routes sanctioned by the transport authorities and that they were not used for hire during the year. On the basis of the said reasoning, he allowed depreciation on the buses at the rate of 33 1/3 per cent only. 2. When the matter came up before the DCIT (Appeals), the assessee placed reliance on the provisions of the Karnataka Motor Vehicles Taxation Act, 1957 and partic....
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.... for labour or services. He argued that since in the instant case, the passengers were compensating the owner of the buses for the journey undertaken by them in the buses, the buses must be considered to have been used in a business of hiring out the same. He also took us to the various provisions of the Karnataka Motor Vehicles Taxation Act, 1957. He particularly drew our attention to item No. 4 at Part A of the Schedule attached to the said Act which prescribed various rates for payment of tax under the Motor Vehicles Act (in accordance with the capacity of the vehicle) in respect of motor vehicles plying for hire and used for transport of passengers. He also argued that a liberal construction is necessary about the usage of the word "....
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....e. 5.2 Black's Law Dictionary defines the word "hire" (noun) as below : "Compensation for the use of a thing, or to arrange for the labour or services." 5.3 We also note that item No. 4 of the Part A of the Schedule to the Karnataka Motor Vehicles Taxation Act, 1957 prescribes certain rates in respect of motor vehicles plying for hire and used for transport of passengers and in respect of which permits have been issued under the Motor Vehicles Act, 1939. On the other hand, item No. 5 of the same Schedule prescribes a different rate for motor vehicles plying for hire or reward used for transport of passengers in respect of which contract carriage permits have been issued under the Motor Vehicles Act. Again, item No. 7 prescribes a d....
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....tions do not specifically state that when passengers use the motor bus for journey purpose by paying separate fares for the portions of their journey, that would also be considered to be a case of "hire" of the motor bus. It has also not been shown to us that the assessee's case really falls under Item No. 4 of the Schedule to the Karnataka Motor Vehicles Taxation Act, 1957 and not under item No. 7 thereof dealing with omnibuses. In fact, the word "omnibus" was originally being used to denote a motor bus which carried passengers in general and not a selected group of people who would pay the hiring charges in respect of the bus itself. We also find that the Legislature has used in the depreciation schedule attached to the Income-tax Rules, ....
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....very few cases would remain for applicability of the lower rates of depreciation to motor buses. This conclusion also does not at all seem to be in conflict with the definition of the word "hire" as found in different dictionaries. Again, we note that the expression like "motor vehicles plying for hire" is completely different from the expression "motor buses... used in a business of running them on hire". Thus, finally, we are of the opinion that because of the use of the specific language of "used in a business of running them on hire", the various arguments of the learned counsel for the assessee by relying on the definition of the word "hire" in connection with the expression "passengers being carried for hire", would not hold good in t....