High Court Of Delhi
CIT vs. Delhi Airport Service
Sections Rule, Appendix I, Part I, Item III(ii), D(9)
Asst. Year 1977-78
Arijit Pasayat, C.J. & D.K. Jain, J.
IT Ref. No. 253 of 1983
10th September, 2001
Counsel Appeared
R.C. Pandey with Mrs. Prem Lata Bansal, for the Applicant : None, for the Respondent
JUDGMENT
ARIJIT PASAYAT, C.J. :
At the instance of Revenue, following questions have been referred for opinion of this Court under s. 256(1) of the IT Act, 1961 (for short the ‘Act’), by the Income-tax Appellate Tribunal, Delhi Bench ‘E’, New Delhi (for short the ‘Tribunal’) :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the air-conditioning plant is an integral part of a bus ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that depreciation on air-conditioner fixed in a bus was allowable at the rate applicable to the bus, instead of the rate applicable to air-conditioner when separate rates of depreciation have been provided for motor vehicles and air-conditioning plants ?”
Dispute relates to asst. yr. 1977-78.
2. Factual position in nutshell is as follows. Assessee, a partnership firm at the relevant point of time, was carrying on business of transport bus service. The buses were air-conditioned. It was claimed before the ITO that the entire vehicle was one and the air-conditioner was an integral part thereof and consequently it was entitled to depreciation @ 30 per cent admissible on such vehicles. The AO was of the view that the value of the air- conditioning machinery is to be separately ascertained and depreciation @ 15 per cent admissible on air- conditioning machinery was to be allowed. Accordingly, he determined the value of the air-conditioning machinery separately and allowed lower depreciation @ 15 per cent while allowing higher depreciation @ 30 per cent on the remaining value of the vehicles. Assessee preferred an appeal before the Commissioner of Income-tax (Appeals) [in short ‘the CIT(A)’], who accepted assessee’s contention and directed allowance of depreciation @ 30 per cent on the aggregate value of the bus and the air-conditioning machinery. Revenue preferred an appeal before the Tribunal. Relying on its earlier decision in the case of Smt. Urmila Goel in ITA Nos. 4887/Del/79 and 1247/Del/1977-78, CIT(A)’s views were upheld. On being moved for reference questions as set out above have been referred for opinion of this Court.
3. We have heard learned counsel for Revenue. There is no appearance on behalf of assessee in spite of notice. According to learned counsel for the Revenue air-conditioning plant is not an integral part of the bus and a bus can operate even without the air-conditioning plant and, therefore, the conclusions of the CIT(A) and the Tribunal are not in order. We find that the Revenue had moved for reference under s. 256(1) of the Act so far as Smt. Urmila Goel is concerned. The same was turned down. Application under s. 256(2) of the Act also did not bring any relief to the Revenue, as appears from the decision in CIT vs. Smt. Urmila Goel (1986) 52 CTR (Del) 276 : TC 27R.459. In view of what has been stated in the said decision, so far as the first question is concerned, we answer the same in the affirmative i.e., in favour of assessee and against the Revenue. The obvious answer to the second question is also on similar lines, i.e., in the affirmative, in favour of assessee and against the Revenue.
The reference stands disposed of.
Decision in favour of Assessee
[Citation : 255 ITR 91]