TMI Blog2016 (11) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... any - 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 - I.T.A. No.570 /Mum/2015 - - - Dated:- 21-9-2016 - SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI ASHWANI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the directors inasmuch as the appellants, having paid for the cost of the said vehicles are owners of the vehicles which have been used for the purposes of business of the appellants and hence, the said disallowance is required to be deleted. 2.1. Further, with regard to admissions of the additional ground it was submitted that this ground was omitted to be raised in the appeal memo inadvertently and no fresh facts are required to adjudicate this ground. It was noted by us the additional ground can be decided on the basis of material held on records and therefore after hearing both the parties, it was admitted. 3. It is also noted that there is delay in filing of appeal by 43 days. It was submitted by the Ld. Counsel that there has been inadvertent delay in filing this appeal. Our attention was drawn on the petition for seeking condonation of delay in filing this appeal which is duly supported with an affidavit. It was explained that the delay occurred due to negligence of the accountant of the assessee which happened inadvertently. The affidavit filed by the said accountant reads as follows:- I ,VIKRAM KABRA, aged about 38 years, residing at 4/002, GAURAV CITY, MIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an to 50% to make the disallowance at par with the motor car expenses. While doing so, the Ld. CIT(A) did not give any proper reasoning as to why this 50% disallowance should be made. Being aggrieved, the assessee came in appeal before the Tribunal and contented that it is a case of a company, complete details have been furnished before the lower authorities, there cannot be any disallowance on the ground of personal user and, therefore, disallowance should be fully deleted. 8. On the contrary, the Ld. DR did not object to the admission of additional ground and submitted that the Ld. CIT(A) has fairly brought down the disallowance to 50% which should be sustained. 9. We have considered the submissions made by the lower authorities. It was submitted that complete details have been furnished before the lower authorities. There are no basis to disallow 50% of the expense incurred on the motor car which was used exclusively for the purpose of the business of the assessee. Nothing has been detected to show he user of the motor car for non business purposes. No reasoning whatsoever has been given by the AO as to why these expenses have not been allowed fully. Ld. CIT(A) also has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company keeping in view the provisions of the Companies Act. He further placed reliance on the following judgements in support of the proposition that even if the asset is not registered in the name of the assessee, but if the assessee is de-facto owner of the asset, then the claim of depreciation shall be allowed to the assessee:- 1. Mysore Minerals (1999) 106 Taxman 166 (SC) 2. Navdurga Transport Co 149 CTR 219 3. Dilip SinghSardarsingh Bagga 201 ITR 995 4. Electro Ferro Alloys Ltd 25 Taxmann.com 458 (Ahd) 5. Aravali Finlease Ltd 341 ITR 383 (Guj) 6. Basti Sugar Mills Co Ltd 257 ITR 88 (Del) 13. In view of the above said legal position and facts of the case, Ld Counsel requested for allowing the claim of depreciation. 14. It was also submitted by the Ld. Counsel that the car was purchased in earlier year and this is the second year. Since the car has already entered into the block of assets in A.Y. 2009-10 and depreciation on the same was allowed by the AO, the same cannot be disturbed now in A.Y. 2010-11. 15. The Ld. DR submitted that since assessee is not the legal owner of the car as the same is registered in the name of the director, it canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd (supra) held that the company was entitled to depreciation on car which was owned by it but not registered in its name. The law in this regard was also clarified by Hon ble Supreme Court way back in the case of Mysore Minerals Ltd vs CIT 239 ITR 775 (SC). It is further noticed by us that the co-ordinate bench of Mumbai Tribunal in its later judgment passed in the case of Edwise Consultants Pvt Ltd (supra) clarified the correct legal position in this regard and following the aforesaid judgements of high courts held that depreciation will be allowable in such a situation. 18. It is further 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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