TMI Blog2017 (11) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid facts, it can safely be concluded that though the assessee company was not vested with the legal ownership of the vehicle, but then, it remained the beneficial owner of the same. We thus being of the considered view that the assessee was duly entitled towards the claim of depreciation on the aforesaid motor car, set aside the order of the CIT(A) and delete the disallowance - Decided in favour of assessee. - I.T.A. No. 569/Mum/2016 - - - Dated:- 25-9-2017 - SHRI G.S. PANNU, AM AND SHRI RAVISH SOOD, JM For The Appellant : Shri Jignesh R. Shah, A.R. For The Respondent : Shri V. Justin, D.R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER The present appeal filed by the assessee is directed against the order passed by the CIT(A)-17, Mumbai, dated 26.11.2015, which in itself arises from the assessment order passed by the A.O u/s 143(3) of the Income Tax Act, 1961 (in short Act ), dated 20.01.2015. The assessee had assailed before us the order of the CIT(A), on the following grounds of appeal:- The appellant submits the following grounds of appeal which are separate/alternative and without prejudice to each other: 1. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of CIT Vs. Mysore Minerals (1999) 156 CTR 1 (SC). However, the A.O not finding favour with the submissions of the assessee, disallowed the claim of depreciation of ₹ 5,10,103/- raised by the assessee. 3. The assessee being aggrieved with the order of the A.O carried the matter in appeal before the CIT(A). That it was submitted before the CIT(A) that as the purchase consideration for the motor car was paid by the assessee company, therefore, the same was really owned by the assessee company and not by the director. That it was further submitted by the assessee that the motor car was reflected in the balance sheet of the assessee company and the day to day running expenses were also met by the latter. Thus, in the backdrop of the aforesaid facts, the assessee had tried to impress upon the CIT(A) that though the assessee was not the legal owner of the motor car, but being vested with the beneficial ownership of the same, it was duly entitled towards claim of depreciation. The CIT(A) however did not find favour with the submissions of the assessee, and concluded that the assessee not being the owner of the motor car was thus not entitled towards the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... director, but is reflected as an asset in the books of account of the assessee company and is used in the business of the company, the assessee shall be taken as the de facto owner of the said car and would be entitled towards the claim of depreciation, by observing as under: 22.2 In the present case it is not disputed that investment was made by the assessee in purchase of the motor car. It is shown as asset in the balance sheet of the company. If expenditure for running the vehicle was incurred by the assessee, the assessee is de facto owner of the vehicle. It is not disputed that it was used for the purpose of business of the assessee company. Hon. Rajasthan High Court in the case of CIT vs. Mohd. Bux Shokat Ali (2001) 167 CTR (Raj) 192 : (2002) 256 ITR 357 (Raj) held that where vehicle was purchased by the firm, used by it for the purpose of its business but it was registered in the name of one of the partners, then the firm would be entitled to depreciation on vehicle. Hon ble Delhi High Court in the case of CIT vs. Basti Sugar Mills Co. Ltd. (2002) 176 CTR (Del) 294 : (2002) 257 ITR 88 (Del) held that where vehicle was owned and used by the assessee but no registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company. In the case of Basti Sugar Mills Co. Ltd (supra), the Hon ble Delhi High Court approved the decision of the Tribunal in holding that, since vehicle is a movable asset, the registration as required in the case of transfer of immovable property is not a condition precedent for legal ownership. In the instant case, the funds for purchase of vehicles have been provided by the assessee company and they have been shown as assets of the assessee company. Hence, in our view, the assessee company should be considered as owner for all practical purposes and hence it is entitled for depreciation. In view of the direct decision of Hon ble Gujarat High Court is available on this issue, we prefer to follow the same to that rendered by the Tribunal in the assessee s own case for AY 2007-08. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to allow depreciation on vehicles. The ld. A.R also relied on the order of the coordinate bench of the Tribunal, viz. ITAT, J bench, Mumbai in the case of Mehta Equities Ltd. Vs. ACIT-4(2), Mumbai (ITA No. 570/Mum/2015, dated 21.09.2016 ), wherein the Tribunal had taken a similar view. 5. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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