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2014 (1) TMI 1290 - ITAT NEW DELHIAllowability of depreciation u/s 32 of the Act - Deletion made on depreciation on car – Held that:- The Assessing Officer disallowed the depreciation due to two factors the first factor being non registration in the name of company and the second factor being the nature of business of assessee wherein the necessity of such luxurious car was not warranted - For claiming depreciation existence of two conditions is a must - That is asset must be owned wholly or partly by the assessee and secondly it should be used for the purpose of business or profession of the assessee - Assessee has not debited any amount for petrol or diesel which proves that vehicle was not used for the purpose of business or profession of the assessee - The Assessing Officer has though observed that business of the assessee did not require such luxurious car but he could not corroborate his findings with the facts from the profit and loss account – assessee contended that in the succeeding year the claim was allowed does not carry any force as in that year, asset might have been used for the purposes of business of assessee which does not seem to be the case the present year as profit and loss account of assessee does not show any expenditure to have been incurred on account of petrol/diesel – matter remitted back to the AO for re-adjudication – Decided in favour of Revenue. Deletion made on proportionate interest - Interest on borrowed capital paid and interest free loans advanced to sister concerns – Held that:- It has been made by Assessing Officer on the basis of assumptions only - The actual facts and figures as per balance sheet of the assessee do not indicate that interest bearing funds were diverted for interest free advances - assessee has not taken any loans and advances on which interest was paid and rather it has paid interest on the purchase of shares which were purchased on credit from share broking firms – there was no infirmity in the order of CIT (A) on this ground – Decided against Revenue.
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