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2015 (12) TMI 1618 - AT - Income TaxDepreciation claimed on motor car - disallowance on the alleged ground that vehicles were not registered in the name of the company - Held that - Following the decision of the Hon ble Supreme Court in the case of ICDS Ltd (2013 (1) TMI 344 - SUPREME COURT ) we hold that the assessee is entitled for claim of depreciation on the vehicles used by it even though it has been purchased in the name of the Director. We therefore set aside the findings of the Ld. CIT(A) and direct the AO to allow the claim of depreciation - Decided in favour of assessee.
Issues: Disallowance of depreciation claimed on motor car due to vehicles not being registered in the name of the company.
Analysis: The appeal pertains to the disallowance of depreciation claimed on a motor car because the vehicles were not registered in the name of the company. The Assessing Officer found that the vehicle was purchased in the name of the Director, prompting the query on why depreciation should not be disallowed. The assessee contended that ownership of the vehicles by the Director did not negate the company's ownership, as all expenses were accounted for by the company. The AO, however, insisted that ownership was essential for depreciation claims and disallowed the depreciation. The matter was taken to the Ld. CIT(A) without success. During the appeal, the assessee's counsel referenced a Tribunal decision in a similar case and the Supreme Court's ruling in ICDS Ltd Vs CIT 350 ITR 527, arguing for the allowance of depreciation. The Departmental Representative supported the Revenue authorities' stance but failed to present a distinguishing decision in their favor. Upon review, the Tribunal found merit in the assessee's argument. Citing the precedent set by the Hon'ble Supreme Court in ICDS Ltd, the Tribunal ruled in favor of the assessee, allowing the claim for depreciation on vehicles even if purchased in the Director's name. The Tribunal set aside the Ld. CIT(A)'s findings and directed the AO to permit the depreciation claim of Rs. 5,12,405. Consequently, the appeal by the assessee was allowed, and the decision was pronounced in an open court hearing on 1st December 2015.
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