Income-tax ---

-----Reference -Reference---Question of law---Depreciation---Motor vehicles owned and used by tour operators and travel agents in business of running vehicles on hire for tourists---Whether "truck" is included in "motor lorry"---Whether there is no difference between lease and hire so far as motor vehicles (including trucks) are concerned- --Whether Tribunal justified in holding that depreciation at 50 percent allowable on trucks which have been given on lease by assessee and not run on hire by it---Question of law fit for reference---Indian Income Tax Act, 1961, S.256(2).

The assessee-company contended that truck is included in "motor lorry" and there is no difference between lease and hire so far as motor vehicles (including trucks) are concerned. The Revenue contended that Circular No.609, dated July 29, 1991 (see (1991) 191 ITR (St) 1), and Circular No.652, dated June 14, 1993 (see (1993) 202 ITR (St) 55), were relevant for the purpose of interpreting the relevant entries of Appendix I of the Income-tax Rules, 1962. The Tribunal held that depreciation at 50 percent. was allowable on trucks which had been given on lease by the assessee-company and not run on hire by it. The Tribunal rejected the application of the Revenue under section 256(1) of the Income Tax Act, 1961, for referring a question of law. On an application filed under section 256(2) in the High Court for directing the Tribunal to refer a question of law:

Held, that a question of law whether the Tribunal was correct in law holding that depreciation at 50 percent. was allowable on trucks which had been given on lease by the assessee and not run on hire by it, arose for reference.

R.D. Jolly with Ms. Premlata Bansal for Applicant.

JUDGMENT

This is an application under section 256(2) of the Income Tax Acc 1961, filed at the - instance of the Revenue and seeking a mandamus to the Tribunal to draw up a statement of case and refer the following question of law (assessment year 1988-89) for the opinion of the High Court

"On the facts and in the circumstances of the case, whether the Income-tax Appellate Tribunal was correct in law in holding that depreciation at 50 percent. is allowable on trucks which have been given on lease by the assessee-company and not run on hire by them?" .

Learned senior standing counsel for the petitioner has invited the attention of the Court to Circular No.609, dated July 29, 1991--(1991) 191 ITR (St.) 1, and Circular No.652, dated June 14, 1993--(1993) 202 ITR (St.) 55, which in his submission are relevant for the purpose of interpreting the relevant entries of Appendix I to the Income Tax Rules, 1962.

Learned counsel for the assessee has submitted that "truck" is included in "motor lorry" and there is no difference between lease and hire so far as the motor vehicles (including trucks) are concerned.

Learned counsel further submitted, that the issue is concluded by the findings of fact recorded by the assessing authorities and is not a question of law.

Having heard learned counsel for the parties and having perused the assessment order, the appellate orders of the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal, we are satisfied that the question does arise as a question of law from the appellate order of the Tribunal and, therefore, the Tribunal was not justified in rejecting the application under section 256(1) filed by the petitioner.

The application is allowed. The Tribunal shall draw up a statement of the case and refer the above said question of law for the opinion of the High Court.

M.B.A./4077/FC ??????????????????????????????????????????? ??????????????????????????????????? Application allowed.