Commissioner of Income Tax vs P.S. Jain and Co. Ltd.

Heard.

This is an application u/s 256(2) of the Income Tax Act, 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 per cent, 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 Manian Transports and others Vs. S. Krishna Moorthy, Income Tax Officer, , and Circular No. 652, dated June 14, 1993- [1993] 202 ITR 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 assessed 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 u/s 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.