TMI Blog1986 (11) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee company by Arab Union contracting Company a semi-government company, based in Tripalli. To enable it to carry on the work of contract the assessee purchased a few cars and pick-up vans for the mobilisation of material and labour. On these the assessee claimed depreciation. The ITO disallowed the claim for depreciation because the cars and the vans were purchased after 1975. These cars and vans not being manufactured inIndiainvited third proviso to cl. (ii) of sub-s. (1) of s.32. 2. Having failed before the ITO the assessee took up the matter in appeal before the Commissioner (A). The assessee reiterated his plea that for efficient execution of the contract inLibyait was considered economic to purchase foreign vans and cars and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p vans. Regarding the claim for depreciation on the motor cars purchased of foreign brand it was submitted that these are not imported in the taxable territories. Therefore, the bar placed in the aforesaid proviso should not be made applicable. Revenue cannot take the stand that the purchase of the motor car was not required in the exigencies of business. If the purchase was made for carrying on of the business there was no point in disallowing the claim for depreciation as provided in s. 32 for other vehicles. Another submission was also made that alternatively he should be allowed allowance as provided in s. 37 of the Act. 4. Having considered the facts of the case we are of the view that as far as the case of motor vans is considered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lea in this respect. Accordingly we vacate the finding of the lower authorities and direct the ITO to allow after obtaining the necessary particulars from the assessee, depreciation on the motor vans only. 5. Another issue raised in this appeal is regarding a disallowance of Rs. 5,000 on account of expenses incurred in the maintenance and running of cars by the Directors According to the facts brought on record, a total expenditure of Rs. 2,28,246 was incurred on the maintenance and running of cars in its head office and at its two sites of operation in Libya, Beniwalid and Mizda and at Zawarah. The ITO disallowed 15 per cent of the total expenditure on account of personal use by the Directors. This worked out to a disallowance of Rs. 34, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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