K. Shivashankar Bhat, J.
1. In respect of there assessment 1981-82, 1982-83 and 1983-84, the following question has been referred under section 256(1) of the Income-tax Act, 1961 :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the lorries owned by the assessee would not fall under item III-E (1A) of part I of Appendix I, to be entitled to depreciation at 40 per cent. ?'
2. The finding is that the assessee is a manufacture of plywood. To transport the timber which is the raw material in the manufacture of plywood, the assessee used its own lorries. The dominant purpose of these lorries was the transportation of the material belonging to the assessee in connection with its manufacturing activity. However, on a few occasions, when the lorries were idle, they were given on hire. It is also the finding that the income earned by the assessee by hiring by hiring out the lorry is a negligible part of the assessee's income.
3. In the background of the above facts, the claim of the assessee for depreciation under item III-E (1A) of Part I of Appendix I, of the Rules was disallowed. Hence, these references.
4. The facts speak for themselves. The above provision is attracted only in the case of motor buses, motor lorries and motor taxis used in a business or running them on hire. The assessee should be engaged in the business of running the vehicles on hire. The concept of business involves some kind of regularly in the activity involved in the business. Stray incidents of hiring out idle lorries cannot be brought within this provision because the assessee herein was engaged in the business of manufacturing timber in connection with which the lorries were being used. The dominant activity of the assessee will have to be considered to find out as to whether the particular claim would fall within the provision referred to above.
5. In view of the specific finding that the lorries were regularly employed for the business of the assessee of manufacturing plywood and the lorries were hired out only on a few limited occasions, the Revenue is justified in rejecting the claim of the assessee under the above provision of item III-E (1A) of Part I of Appendix I.
6. The question referred to us is, accordingly, answered in the affirmative and against the assessee.
7. References are answered accordingly.