TMI Blog2014 (7) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no justifiable reason to doubt the claim that the BMW car was put to commercial use - the assessee was entitled to full depreciation at the specified rate of BMW motor car and the disallowance made by the AO on account of depreciation to the extent of 50% was not sustainable thus, the order of the CIT(A) is set aside Decided in favour of Assessee. Depreciation on Skoda motor car Held that:- The basis given by the AO to disallow the entire depreciation claimed by the assessee on Skoda car was untenable inasmuch as if at all no record was maintained by the assesse to show that the Skoda car was used for the purpose of his business or profession, the disallowance on account of personal use of the car could have been made to some extent on estimated basis but not the entire depreciation merely because the assessee was maintaining a fleet of cars which was kept ready for use for the purpose of his business or profession - a disallowance of 25% of the total depreciation claimed by the assessee on Skoda car on personal use is to be allowed the order of the CIT(A) is modified Decided partly in favour of Assessee. Expenses on motor car and fuel expenses Held that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate / other clients, logistic and transport management, exploring and administering new business opportunities, media management, helping in privacy issues, etc. - Our clients did not have much experience and time to manage all the above issued which though simple in nature, had to be handled by someone very close to our clients and in whom our clients could impose maximum confidence. In the circumstance the only option for our clients was to engage his own father to help him handle all the above issues and lumpsum contract amount of Rs.20 Lacs ( all inclusive) was determined. - In fact as our client understand there are certain agencies who are charging fees ranging from 10 to 15% of gross collection. Our client found a better alternative in his own father and hence the amount was paid. Our clients humbly pleads the amount is reasonable, keeping in mind the facts and circumstances of the case . 4. The above submission made by the assessee was not found acceptable by the A.O. on the following grounds: (i) Shri Gurunath Sharma father of the assessee is not in possession of any expertise knowledge about the job for which he is assigned by the assessee. (ii) It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on BMW car, it was brought to the notice of the ld. CIT(A) by the assessee that the said car was given on rent and the claim for the depreciation on the said car therefore was entirely allowable against the rental income. According to the ld. CIT(A), there was, however, no evidence produced by the assessee to show that the BMW car was put to commercial use. In the absence of such evidence, he confirmed the disallowance made by the A.O. on account of depreciation on BMW car to the extent of 50%. As regards the disallowance made by the A.O. on account of depreciation on Skoda car to the extent of 100% and motor car and fuel expenses to the extent of 75%, the ld. CIT(A) did not give any specific finding in his impugned order on these issues but finally dismissed the entire appeal of the assessee. Aggrieved by the order of the ld. CIT(A), the assessee has preferred this appeal before the Tribunal raising the following grounds:- 1. In the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in confirming the disallowance of Rs. 20,00,000/- made by the Assessing officer by disallowing the entire contract charges of Rs. 20,00,000/- paid by the appellant to his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) confirming the disallowance made by the A.O. on this issue. The same is therefore upheld and ground No. 1 of the assessee s appeal is dismissed. 8. As regards the issue involved in ground No. 2 relating to the disallowance of depreciation on BMW car made by the A.O. to the extent of 50% and confirmed by the ld. CIT(A), it is observed that a specific plea was raised by the assessee before the ld. CIT(A) that the BMW car having been given on rent during the year under consideration, he was entitled for full depreciation on the said car at the specified rate. The ld. CIT(A), however, did not accept this plea of the assessee on the ground that there was no evidence adduced by the assessee to establish that the BMW car was put to commercial use. He, however, appears to have overlooked the vital fact that the car rental income of Rs. 3,16,700/- received during the year under consideration was duly offered by the assessee to tax in his return of income and the A.O. having already assessed the same, there was no justifiable reason to doubt or dispute the claim of the assessee that the BMW car was put to commercial use. In our opinion, the assessee was entitled to full depreciation a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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