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2016 (11) TMI 358 - ITAT MUMBAIAllowability of expenses on motor car maintenance, car insurance and interest paid on car loan - cars were registered in the name of the directors - Held that:- It is a case of a company which is a separate legal juristic person. There cannot be any disallowance on account of alleged personal user. It was shown that complete details and evidences were submitted in this regard. Nothing has been brought on record by either of the authorities to show any discrepancies in the details and evidences with regard to running and maintenance of motor car, car insurance and payment of interest on car loan furnished by the assessee company. Under these circumstances, we find the action of the lower authorities as unjustified in making the disallowances on surmises and conjectures. Therefore, the AO is directed to fully allow the motor car expenses, car insurance and interest paid on car loan as claimed by the assessee - Decided in favour of assessee Depreciation on motor cars - diallowance of claim as the said cars were registered in the name of the director and not in the name of the assessee company - Held that:- As noted that in this case car was purchased by the assessee company in preceding year i.e. A.Y. 2009-10, wherein depreciation was claimed by the assessee and allowed by the AO. Thus, the said car had entered into block of assets in A.Y. 2009-10. Once an asset is entered into the block of asset and is brought forward as part of opening WDV, there arises no question for not allowing depreciation on the opening amount of WDV of the car, so long as continues to be used for the business of the assessee. It is further noted that in this case, the AO has himself allowed motor car expenses on the same car @50%. Thus, AO himself has accepted the user of the car for the purpose of business of the assessee company. Under these circumstances, contradictory decision could not have been taken for the purpose of allowing depreciation. Thus, taking into account the aforesaid legal position and peculiar facts and circumstances of this case, we find that depreciation is allowable on the car and, therefore, the same is directed to be allowed - Decided in favour of assessee
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