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2013 (10) TMI 602 - ITAT MUMBAIDisallowance u/s.40A(2)(a) - reasonableness of an expenditure - f interest paid by the assessee-company on the deposits by its directors and principal shareholders - assessee paid interest @24% - AO restricted the claim to 15% - Held that:- an interest rate in the range of 16% to 18% p.a., i.e., 33% to 50% over the PLR, would represent the FMV of the interest on the unsecured deposits as raised by the assessee. The Revenue has also not brought any material on record to justify the assessed rate of 15% p.a. and, besides, the assessee has claimed its business to be relatively new. - taking a liberal view of the matter, an interest rate of 18% p.a. allowed to meet the ends of the justice. - Decided partly in favor of assessee. Depreciation on Motor car - Vehicle not registered under name of assessee but purchased in the name of employee - Held that:- the basis on which the assessee claims the beneficial ownership of the said asset is not clear or understood. Have the parties entered into an agreement or understanding to this effect? This is as the law deems the registered owner to be the owner proper. How would, and on what basis, one may ask, the assessee claim the vehicle from the concerned employee when required, as when the employee leaves the service? Who, of the two, has its possession? It is only where the beneficial ownership is not disputed that it has been held by the hon'ble courts that the absence of registration or legal title would not operate to preclude the claim for depreciation on the relevant asset. - matter remanded back for reconsideration.
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