Law:

Section:

When a vehicle is registered as contract carriage and permit to that effect is also obtained, only thereupon it can be concluded that it was ready for use for carrying passengers for hire Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment year 1992-93 - Assessee-company purchased a vehicle and took delivery on 30-3-1992 - On same day, assessee applied for its registration as a non-transport vehicle, which was granted on 3-4-1992 with retrospective effect - Case of assessee was that it had operated said vehicle from 1-4-1992 for taking a tourist party, so depreciation was to be allowed in respect of vehicle in question for relevant assessment year - It was, however, admitted by assessee that vehicle was registered as a contract carriage only on 5-5-1992 - Whether only after getting a vehicle registered as contract carriage and obtaining contract carriage permit, it can be concluded that vehicle is kept ready for use for carrying passengers for hire - Held, yes - Whether since contract carriage permit was obtained for vehicle only on 5-5-1992, it could not be concluded that vehicle was kept ready for use on or before 31-3-1992 - Held, yes FACTS The assessee was carrying on business of travel agencies and as operator of tourist vehicles. It purchased a vehicle and took delivery of the same on 30-3-1992. On the same day, the assessee applied for registration as a non-transport vehicle. The registration was granted on 3-4-1992 with retrospective effect from 30-3-1992 and it was valid up to 24-4-1992. The case of the assessee was that it had operated the said vehicle from 1-4-1992 for taking a tourist party. However, it was stated that the vehicle was registered as a contract carriage only on 5-5-1992. On the basis of above materials, the assessee claimed depreciation on the said vehicle for the relevant assessment year. The Assessing Officer disallowed the claim on the ground that the assessee had not used or kept the vehicle ready for use at any time prior to 31-3-1992. On appeal, the Commissioner (Appeals) upheld the order passed by the Assessing Officer. On second appeal, the Tribunal, however, allowed the claim of the…

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