Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 244 - HC - Income TaxBenefit of depreciation - vehicle were not owned and used but merely financed by the assessee - Held that:- Section 32 requires that the assessee must use the asset for the "purposes of business". It does not mandate usage of the asset by the assessee itself. As long as the asset is utilised for the purpose of business of the assessee, the requirement of Section 32 will stand satisfied, notwithstanding non-usage of the asset itself by the assessee - As the owner, it used the assets in the course of its business, satisfying both requirements of Section 32 of the Act and hence, is entitled to claim depreciation in respect of additions made to the trucks, which were leased out. See Commissioner of Income Tax (I) Jaipur Vs. Baid Leasing & Finance Company Ltd. [2013 (8) TMI 13 - RAJASTHAN HIGH COURT] - Decided in favour of assessee. Deduction of payment of interest - the loans/ advances were provided to the persons related to the Directors without interest and for non business purposes? - Held that:- As decided in S.A. Builders Ltd. Vs. Commissioner of Income Tax (Appeals) Chandigarh and Anr.[2006 (12) TMI 82 - SUPREME COURT] in the present case, the assessee borrowed the fund from the bank and lent some of it to its sister concern (a subsidiary) on interest free loan. The test, in our opinion, in such a case is really whether this was done as a measure of commercial expediency. In our opinion, the decisions relating to Section 37 of the Act will also be applicable to Section 36(1)(iii) because in Section 37 also the expression used is "for the purpose of business". It has been consistently held in decisions relating to Section 37 that the expression "for the purpose of business" includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby. Taking into account the decision of the Supreme Court, we are of the opinion that it was not interest which was from the borrowed fund which was running from the finance which is justified by CIT learned Tribunal. - Decided in favour of the assessee
|