Depreciation @50% on maruti Car

plz clarify that you want dep. as per i.t. or companies act

1. as i.t.act provide  the depreciation on moter buses, motor lorries and motor taxis used in a business of running them on is upto a.y. 2005-06 is 40% and a.y.2006-07 onwards is 30%.

2. As per companies act. 1956 provides the 40% (WDV) and 16.21% (SLM) on the sama.

Are you taking about recent amendment in New Appendix-I vide Notification No.120/2009 dt.19-01-2009, whereby new entry is added namely (via) in heading III- MACHINARY AND PLANT in item (3) stating that “New Commercial vehicle which is acquired after 01-01-2009 but before 01-04-2009 and is put to use before 01-04-2009 for the purposes of business or profession, Rate of Depreciation is 50%.’? The said entry is for Commercial Vehicle means Heavy goods vehicles and not for Motor Car. Motor car is covered in item No. (2) in heading III. Hence, Normal Rate of depreciation on Motor Car is 15% only and if it is put to use for less than 180 days, it is 7.50%

Sorry, I do not agree that you will get depreciation on Maruti Car @ 50% due to amendment in New Appendix-I vide Notification No.120/2009 dt.19-01-2009, whereby new entry is added namely (via) in heading III- MACHINARY AND PLANT in item (3) stating that “New Commercial vehicle which is acquired after 01-01-2009 but before 01-04-2009 and is put to use before 01-04-2009 for the purposes of business or profession, Rate of Depreciation is 50%.’ The reason is as I have ready stated that the said entry is for Commercial Vehicle which means Heavy goods vehicles and not for Motor Car. Motor car is covered in item No. (2) in heading III. Hence, Normal Rate of depreciation on Motor Car is 15% only and if it is put to use for less than 180 days, it is 7.50%

I think CAR used as taxi should also be called as Commercial vehicle. The basic funda of dep is the wear & tear. For commercial vehicle dep rate is higher as they are to be used extensively than a private vehicle. This is general logic. So if it is put to use before 1.4.2009, it is eligible for 50% dep.

Mr. Abhinav, here we are discussing depreciation on motor car used for the purpose of business other than those used in a business of running them on hire. Please refer Schedule of Rate of Depreciation. Motor car is separately covered in entry no. 2 of heading III . Commercial vehicle is covered in entry no.3 of heading III. Commercial vehicle is defined in the said schedule. 

Thanks for the reply.

I agree with you that we are discussing here only about motor car used in the business. But my point is that when by inserting a seperate entry via by notification then one can claim the depreciation as per that inserted enrty on all the items falling under that inserted entry it is irrelevent that, that item is already having a seperate entry under clause 2 or any other clause i.e. 3(ii). My main doubt is the defination of commercial vehicle which is again reproduce here:-

     “Commercial vehicle” means

• “heavy goods vehicle”,

• “heavy passenger motor vehicle”,

• “light motor vehicle”,

• “medium goods vehicle” and

• “medium passenger motor vehicle”

• “maxi-cab”,

• “motor-cab”,

• “tractor ” and “road-roller”.

in the aforesaid defination where is the motor car it is neither in inclusion list nor in exclusion list.

As per motor vehicle act  "motor car" means any motor vehicle other than a transport vehicle, omnibus, road-roller, tractor, motor cycle or invalid carriage;"

The Motor Car used for the purpose of our own business is a private car and not a commercial vehicle. Hence, it is covered in Entry 2 (separate entry) and not in Entry 3 of heading III which is for commercial vehicles only.

I agree with Mr. Ashok Shah.

I am attaching herewith a case law relating to claim of higher depreciation on motor car and treating the motor car as commercial vehicle, go through the same and share your views now.

Hii CA mkhandelwal, I want your final conclusion which you arrived after this case law which yu hav attached. I also have the same query like you! Watz the solution to this.

Please Revert Back.

Waiting for reply.