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Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment year 1996-97 - Whether depreciation at rate of 40 per cent is admissible in respect of leased motor trucks/lorries used in business of running them on hire - Held, yes [In favour of assessee] FACTS The assessee-company was engaged in the business of leasing out motor trucks and lorries. It received lease rent from the lessees and filed the return for the assessment year 1996-97 and claimed depreciation at 40 per cent on leased out vehicles. However, the Assessing Officer while processing the return filed by the assessee allowed the depreciation at 25 per cent as per rule 5 of the Income-tax Rules, 1962. On appeal, the Commissioner (Appeals) allowed the depreciation at 40 per cent on the leased out vehicles as against 25 per cent allowed by the Assessing Officer. On further appeal, the Tribunal reversed the order of the Commissioner (Appeals) and upheld the order of the Assessing Officer that the assessee was not entitled for higher rate of depreciation on the leased vehicles/lorries. On appeal : HELD In view of the decision of the Delhi High Court in the case of CIT v. Bansal Credits Ltd. [2003] 259 ITR 69 / 126 Taxman 49the assessee was to get deprecation as claimed at rate of 40 per cent in respect of leased motor trucks/lorries used in business of running them on hire. [Para 6] CASES REVIEW CIT v. Bansal Credits Ltd. [2003] 259 ITR 69 / 126 Taxman 49 (Delhi) (para 6) followed. CASES REFERRED TO Soma Finance & Leasing Co. Ltd. v. CIT [2000] 244 ITR 440 /[2001] 116 Taxman 173 (Cal.) (para 2), CIT v. Bansal Credits Ltd. [2003] 259 ITR 69 / 126 Taxman 149 (Delhi) (para 5), CIT v. Goodwill India Ltd. [2004] 268 ITR 480/ 141 Taxman 1(Delhi) (para 6) and CIT v. Shaan Finance (P.) Ltd. [1998] 231 ITR 308/ 97 Taxman 435 (SC) (para 6). J.P. Khaitan for the Appellant. JUDGMENT 1. This appeal was admitted on the following substantial questions of law : "(a)Whether a disallowance made in an intimation under section 143(1)(a) of the Income-tax Act, 1961 which is not repeated in the assessment made under section 143(3) continues to have any existence and whether the Tribunal was…

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