Renting of car whether income from business or income from other sources

Facts:

Assessee had rented two of their cars to Allcargo Global logistics Ltd., for a lease rent of Rs. 6,00,000 on which they claimed all maintenance expenses and depreciation. It was the case of the revenue that the same would have to be treated as income from other sources and thus depreciation was denied. On appeal -

Held in favour of the assessee that the income from renting of cars was taxable as income from business and they were eligible for all expenses including depreciation. Even under income from other sources under Section 57(ii) depreciation is an allowable expense.

The case was a yo-yo with no decisive stand from the revenue --

A.Y. 2011-12 (appeal year) - assessee's claim business income - revenue's claim income from other sources.

A.Y. 2010-11 - revenue accepted it as income form other sources but allowed depreciation but restricted other expenses to Rs. 50,000

A.Y. 2008-09 - revenue accepted it as business income

A.Y. 2009-10 - revenue accepted it as business income

Case: Transindia Freight Services (P) Ltd. v. Dy. CIT 2023 TaxPub(DT) 1166 (Mum-Trib)