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Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment year 1991-92 - Where assessee was neither in business of hire nor it used vehicle in question in business of transportation, higher rate of depreciation on vehicles was not allowable [In favour of revenue] Where assessee was neither in business of hire nor it used vehicle in question in business of transportation, higher rate of depreciation on vehicles was not allowable. CASE REVIEW Bhagwati Appliance v. ITO[2011] 337 ITR 286/199 Taxman 131/10 taxmann.com 329 (Guj.) and CIT v. Gupta Global Exim (P.) Ltd. [2008] 305 ITR 132/171 Taxman 474 (SC)followed. CASES REFERRED TO Bhagwati Appliance v. ITO [2011] 337 ITR 286/199 Taxman 131/10 taxmann.com 329 (Guj.) (para 5), CIT v.Gupta Global Exim (P.) Ltd. [2008] 305 ITR 132/171 Taxman 474 (SC) (para 5), CIT v. BPL Sanyo Finance (P.) Ltd. [2006] 287 ITR 69/154 Taxman 31 (Kar.) (para 9) and Kotak Mahindra Finance Ltd. v. Dy. CIT [2004] 265 ITR 114/[2003] 130 Taxman 422 (Bom.) (para 9). M.R. Bhatt and Mrs. Mauna M. Bhat for the Appellant. Saurabh N. Soparkar and Mrs. Swati Soparkarfor the Respondent. . JUDGMENT Akil Kureshi, J.-The Revenue is in appeal against the judgment of the Tribunal dated May 17, 2001. While admitting the appeal on November 9, 2001, the following question was framed by the Bench: "Whether, the Appellate Tribunal is right in law and on facts in holding that the assessee is entitled to depreciation at the higher rate of 50 per cent. on truck though as per Appendix I appended to rule 5 of the Income-tax Rules, 1962, higher rate of depreciation is allowable only if the vehicles are used in business of running them on hire?" 2. Briefly stated the facts leading to filing of this appeal are as under: 2.1 During the previous year relevant to the assessment year 1991-92, the respondent-assessee purchased one truck. The truck was given on lease. In turn it was the case of the assessee that the truck was run on hire by the lessee. On the investment so made in purchase of the truck, the assessee claimed higher rate of depreciation at the rate of 50 per cent. in terms of clause (2)(ii) of entry III of Appendix I to the…

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