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Depreciation on buses

We had claimed depreciation on route buses at 40 per cent. But the assessing officer purportedly acting under Sec. 154 restricted the same to 15 per cent by an order of rectification. Please advise whether rectification is correct?

The basis for having claimed 40 per cent depreciation has not been indicated. Depreciation was available for commercial vehicles during the period between October 1, 1998, and March 31, 1999, at 40 per cent. The present rate is 30 per cent for “motor buses, motor lorries and motor taxis used in the business of running them on hire”. The route bus is a bus, which runs on hire.

The route bus is also a motor bus so that the assessee is entitled to 30 per cent depreciation. Deduction at 15 per cent is only for unspecified machinery and plant and motor cars. Buses cannot be included in this category in view of the separate entry for buses. At any rate, rectification is meant for apparent mistakes and not for an inference, which may be debatable, so that rectification is even otherwise without jurisdiction. An appeal can be filed.

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