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2021 (12) TMI 698 - AT - Income TaxRevision u/s 263 by CIT - claim of depreciation on motorcars and interest paid on car loans - HELD THAT:- The depreciation so claimed and the interest expenditure on loan availed for purchasing the motorcars have been allowed in the earlier assessment years. It is a fact on record that in the impugned assessment year, the assessee claimed depreciation on the opening WDV. Therefore, once depreciation on the assets have been allowed in the preceding assessment years, the AO could not have disallowed the depreciation claimed on the opening WDV. Simply because the motorcars are registered in the name of the Directors of the company the claim of depreciation cannot be disallowed, if it is established that the motorcars are actually owned by the assessee and used in its normal course of business, though, purchased in the name of the Directors. The assessee has also furnished evidence to show that payment for the purchase of motorcars was on assessee’s account and the EMI for loan availed were paid by the assessee from the its bank account. Even, the motorcars have been shown as fixed assets in assessee’s books of account - there was no reason for the AO to disallow assessee’s claim of depreciation. In any case of the matter, the judicial precedents cited before us by learned Counsel for the assessee clearly say that even if vehicles are registered in the name of directors or partners for certain restrictions/conditions under the Motorcar Vehicle Act, however, if such assets, for all intent and purpose, belong to the company and are used for its business, the company would be eligible to claim depreciation. View taken by the AO in allowing assessee’s claim of depreciation and interest expenses can be considered to be a plausible view. That being the case, assessment order cannot be held as erroneous. Thus, the twin conditions of section 263 of the Act remain unsatisfied. For this reason the impugned order passed by learned PCIT cannot be sustained. - Decided against revenue.
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