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2023 (4) TMI 553 - AT - Income TaxDisallowance of depreciation and expenses on Sports Car - personal v/s business expenditure - As per CIT appellant's sports vehicle has been used for the purpose of business and eligible for claim of depreciation as well as of the expenditure incurred on maintenance and upkeep of the vehicle - HELD THAT:- We are of the opinion that the action of AO in disallowing 50% of depreciation and maintenance charges on the sports car owned and used by the assessee for the purpose of business is not justified. AO is failed to establish, on the given facts that sports car being owned by the assessee has any personal use or being not used fully for the purposes of business. The assessee, which was a private limited company, was a distinct assessable entity as per the definition of 'person' under section 2(31) of the Act. Therefore, it could not be stated that when the vehicles were used by the directors 'even if they were personally used by the directors', the vehicles were personally used by the company, because a limited company by its very nature cannot have any 'personal use'. The limited company is an inanimate person and there cannot be anything personal about such an entity. The view was supported by the provision of section 40(c) and section 40A (5) of the Act. Once the expenditure in question was in terms as provided in sections 309 and 198 of the Companies Act, there could not be any 'non-business' purpose insofar as the assessee-company was concerned. Decided in favour of assessee.
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