THE PR. COMMISSIONER OF INCOME-TAX vs. M/S. HASAN HAJEE AND CO.

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ITA/533/2018HC KarnatakaKAHC01046397201825 August 2021Bench: ALOK ARADHE,HEMANT CHANDANGOUDAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal and CIT(A) were correct in allowing the claim for excess depreciation. The question of law was answered in favor of the assessee.

What were the facts?

The Revenue appealed against an ITAT order that allowed the assessee's claim for excess depreciation. The core issue was whether vehicles used for the assessee's own business were eligible for the higher depreciation rate applicable to vehicles used for hire.

What were the issues?

Whether vehicles used for the assessee's own business are eligible for the higher depreciation rate prescribed for vehicles used on hire under Section 32(1)(ii) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF AUGUST 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR.JUSTICE HEMANT CHANDANGOUDAR I.T.A. NO.533 OF 2018 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX

C.R. BUILDING, ATTAVARA

MANGALURU-575001. 2. THE INCOME-TAX OFFICER

WARD-1(1), PRESENT ADDRESS

ACIT, CIRCLE-1(1), C.R. BUILDING

ATTAVARA, MANGALURU-575001.

... APPELLANTS (BY SRI. E.I. SANMATHI, ADV., FOR SRI. K.V. ARAVIND, ADV.,) AND: M/S. HASAN HAJEE & CO. NO.20-8-678, NEAR OLD MUNICIPAL OFFICE, BUNDER MANGALURU-575001.

... RESPONDENT (BY SRI. THIRUMALESH M, ADV.,) THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 12.04.2018

2 PASSED IN ITA NO.220/PAN/2017, FOR THE ASSESSMENT YEAR 2007-08, PRAYING TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BANGALORE IN ITA NO.220/PAN/2017 DATED 12.04.2018 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), MANGALURU. III. PASS SUCH OTHER SUITABLE ORDERS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. THIS I.T.A. COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been filed by the revenue against the order dated 12.04.2018 passed by the Income Tax Appellate Tribunal. The subject matter of the appeal pertains to the Assessment Year 2007-08. The appeal was admitted by a Bench of this Court on the following substantial question of law: "Whether on the fact and in the circumstances of the case, the Tribunal and CIT(A) are right in law in allowing claim of excess depreciation without properly considering that

3 section 32(1)(ii) of the Act read with Rule 5 and Appendix 1, inter alia, provides for depreciation at 30% in respect of motor buses/lorries/taxi used in the assessee's business of running them on hire, whereas in the instant case, the vehicles are used for assessee's own business and therefore, will not be eligible for higher rate of depreciation?" 2. For the reasons assigned by us today in ITA No.532/2018, the substantial question of law framed in this appeal is answered in favour of the assessee and against the revenue. In the result, the appeal fails and is hereby dismissed. Sd/- JUDGE Sd/- JUDGE RV

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