Depreciation: Rate: Section 32: Gas cylinder including valves and regulators: Entry in schedule: Rate 100%: Liquefied petroleum gas cylinder mounted on chasis of truck: Gas cylinder entitled to depreciation at 100%: Cannot be treated as motor vehicle.

The assessee was dealing in liquefied petroleum gas which it transported in gas cylinders fitted to the chassis of transport vehicles. The assessee claimed depreciation on the cylinders at 100% as applicable to gas cylinders. The Assessing Officer held that the assessee was entitled to depreciation at 40% as applicable to transport vehicles on the ground that the vehicle on which the cylinder was mounted was registered as transport vehicle. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Andhra Pradesh High Court upheld the decision of the Tribunal and held as under:

“(i) The container mounted on the chassis of the truck was nothing but a gas cylinder and it fits the description of gas cylinder in Appendix I, Part I, item III(ii)F(4) read with Rule 5 of the Rules as including valves and regulators.

(ii) The mere fact that the container was mounted on the chassis of the truck did not deprive it of the character of gas cylinder. It had all the attributes of the cylinder and was not divested of its basic character as cylinder on account of the fact that the item was registered as a transport vehicle.

(iii) The assessee was therefore entitled to claim depreciation at 100% on the liquefied petroleum gas cylinder mounted on the chassis of the truck.”