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| The Tax Publishers2020 TaxPub(DT) 2040 (Del-Trib) INCOME TAX ACT, 1961
Section 32(1)
Where oil rigs were wholly owned by assessee and were used for the purpose of its business, which was to give those assets on lease, the assessee would be entitled to claim depreciation @60% on such oil rigs.
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Depreciation - Higher rate - Oil rigs - Oil rigs owned by assessee being used for hiring purpose
Assessee-company was engaged in business of providing mobile drilling rig services to oil and gas industry on hire. It claimed depreciation @60% on oil rigs owned by it, which were rented out to other parties. AO held that the said depreciation should be allowed @15% and not @60% for the reason that the assessee was not a 'mineral oil concern' as it was supplying equipment on hire to all other mineral oil concern and was giving it on hire and not using for its business purpose. Held: It was found that the oil rigs were wholly owned by assessee and were used for the purpose of its business, which was to give those assets on lease. Further, the oil rigs were large structure with the equipment for removing the oil from under sea. Therefore, the assessee would be entitled to claim depreciation @60% on the said oil rigs.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 14A Read with rule 8D
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