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2016 (7) TMI 683 - ITAT JAIPUR

2016 (7) TMI 683 - ITAT JAIPUR - [2016] 49 ITR (Trib) 63 - Disallowance made on account of depreciation claimed u/s 32 - registration of vehicles has not been transferred in the name of the appellant under the Motor Vehicles Act - Held that:- Hon'ble Supreme Court decision in the case of Mysore Minerals Ltd. v. CIT [1999 (9) TMI 1 - SUPREME Court ] has held that anyone in possession of property in his own title exercising such dominion over the property as would enable others being excluded ther .....

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epreciation on the vehicles - Decided in favour of assessee - Disallowance on account of trip expenses - Held that:- The expense have been disallowed on purely ad hoc basis and no specific expenditure/transaction has been highlighted by the Assessing Officer which suggest that these expenses have not been incurred for the purposes of the business. In the light of that, we delete the ad hoc disallowance - Decided in favour of assessee - I.T.A. No. 53/JP/14 - Dated:- 31-3-2016 - Vikram Singh Y .....

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als) erred in law as well as on the facts of the case in confirming the disallowance made on account of depreciation claimed under section 32 of the Act of ₹ 21,02,033 made by the assessee. The disallowance so made by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is contrary to the provisions of law and facts of the case. Hence, the same kindly be deleted in full. (2) The learned Commissioner of Income-tax (Appeals) erred in law as well as on the f .....

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nt proceeding, the Assessing Officer noted that the assessee claimed depreciation of ₹ 21,02,033 on 16 tankers which were not found registered in the name of the assessee though were shown as assets of the assessee. Out of 16 tankers, 11 tankers were in the name of Shri Narendra Palsania and remaining was in the name of Shri Prabhu Dayal. On being asked, the assessee, vide reply dated December 10, 2010, stated that the assessee has purchased these vehicles from the above named persons, vid .....

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peals) who has given findings as under : "I have considered the facts of the case and the submission made. It is stated that the authorised representative could not controvert the findings of the Assessing Officer the assessee claimed for depreciation on trucks is not allowable because he was not the owner of those trucks. The Assessing Officer categorically mentioned in the assess ment order that the expression 'owner' is a much comprehensive term which denotes the full ownership a .....

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is no dispute raised by the Assessing Officer that the assessee has shown such tanker, trailers and trucks in the audited balance-sheet (schedule D) as an owner. The said tankers are admittedly used for the business of the asses see and day-to-day running expenses are also claimed by the assessee in its profit and loss account and the same have been allowed by the Assess ing Officer without any dispute. Notably even the income from the truck plying has been duly declared by the appellant and as .....

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nks, however, all the instalments and EMIs are being paid by the appellant to the bank directly. Copy of the ledger account in the books of the appellant showing the payment with cheque number as also the corresponding bank statements are enclosed. As theses tankers were purchased by the first parties, i.e., Shri Prabhu Dayal Choudhary and Shri Narendra Singh Palsania on finance, there has been some restriction to operate the said tankers as owner under the Motor Vehi cles Act because of the cha .....

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however, such assessment has not been disturbed under section 147 or under section 263 and, therefore has become final. Thus, the Assessing Officer himself treated the appellant to be beneficial owner of these trucks. The concept of registered owner is not at all relevant under section 32. In support of its contention the learned authorised representative drawn our attention to following : "1. The apex Court, while interpreting section 32 of the Act, in Mysore Minerals Ltd. v. CIT [1999] 2 .....

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e, has been placed in possession of the houses as an owner and is using the buildings for the purpose of its business, denial of depreciation not justified. 2. In the case of CIT v. Podar Cement P. Ltd. [1997] 226 ITR 625 (SC), it has been held that anyone in possession of the property in his own title exercising such dominion over the property as would enable the others being excluded therefrom and having the right to use and occupy the property and/or to enjoy its usurp in his own right would .....

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276 ITR 625 (All) held that : 'Fact that registration of the vehicles under the Motor Vehicles Act, 1988, was granted on April 1, 1997, was of no relevance as regards the allowability of depreciation. That apart, the word 'used' under section 32 has to be given wider meaning and it will include assets ready for use'." Hence, the impugned disallowance kindly be deleted in full and the assessee be held entitled to the claim of depreciation as made. 2.3 The learned Departmental .....

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age for the purposes of business. In the instant case, the limited dispute relates to whether the assessee satisfies the ownership test and whether for the purposes of determining the ownership, the registration of tankers in the name of the appellant under the Motor Vehicles Act is an essential requirement. The assessee has purchased these vehicles from two above named persons vide agreements, both dated April 1, 2006, which has not been disputed by the Revenue. It is also an undisputed fact th .....

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appellant is not eligible for claim of depreciation is that registration of vehicles has not been transferred in the name of the appellant under the Motor Vehicles Act. In response, the learned author ised representative has submitted that it has bought the vehicles and have taken over the loan liabilities of the sellers and the vehicles are currently under hypothecation with the bank and as soon as the loan liability is fully discharged, the registration of vehicles would be transferred in his .....

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9] 239 ITR 775 (SC) has held that anyone in possession of property in his own title exercising such dominion over the property as would enable others being excluded therefrom and having right to use and occupy the property in his own right would be the owner of building for the purpose of section 32(1) though a formal deed of title may not have been executed and registered. The said proposition of law is fully satisfied in the instant case where the assessee has claimed depreciation on the vehic .....

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