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TMI Blog2023 (4) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble CIT (A) may please be held as bad-in-law and be deleted. Ground No. 2: On the facts and circumstances of the case and in law, the Hon'ble CIT (A) erred in confirming disallowance to the extent of 50% of the expenses incurred in respect of Nissan Skyline (luxury sports car). The appellant prays that the said action of Hon'ble CIT (A) may please be held as bad-in-law and be deleted. The appellant craves leave to add, omit or alter ground of appeal before or during the hearing of the appeal. 2. Brief facts of the case are that the assessee filed its return of income on 22.11.2013 declaring total income of Rs. 24,24,21,580/-. Assessee's case was selected for scrutiny and a show-cause was issued for disallowance of depreciation on Sports Car. 3. The findings of AO with regard to disallowance of depreciation on luxury sport car and expenses occurred on it are as under: "Addition on account of depreciation on sports car On perusal of the deprecation chart, it is noticed that the assessee has claimed deprecation on luxury sports car of Rs. 5, 90,596/- and expenses occurred on It of Rs. 3, 45,918/-. In this case, during the course of search action, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant's claim by placing reliance on earlier years' orders. No finding was given by the Ld. AO regarding the merits and demerits of the case. Every assessment year is a different year by itself which requires its separate adjudication and therefore, the Ld. AO has violated the principles of natural justice. 2. In earlier years, the revenue had taken a stand that the car was used for personal purposes, without any evidence available on records. The allegations of the Department are not backed by any evidence and it is pure assumptions. 3. In earlier years, the revenue had taken a stand that claim cannot be entertained due to non-maintenance of log book, but there is no denial by the department that Nissan Skyline was a company owned vehicle. Further, when the car has been used only for business purposes, there is no statutory requirement of maintaining a log book as per law and non-maintenance of log book by the appellant cannot be a reason in itself to suggest that the car was not used for business purposes. 4. The Ld. AO cannot question the requirement of such car for the appellant company as he cannot step into the shoe of the appellant company. 5. It's not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts 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." 6. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee. We further considered the decision of ITAT, Mumbai in the case of NIBR Bullion P Ltd v/s DCIT in ITA Nos. 5522 to 5524/Mum/2011, Hon'ble Gujarat High Court in the case of Sayaji Iron & Engg. Co. v/s CIT reported in 253 ITR 749 and that in the case of Dinesh Mills Ltd vs. CIT reported in 122 Taxman 384. [2002] 121Taxman43 (Gujarat) Sayaji Iron & Engg. Co. v. Commissioner of Income-tax "As the directors of the assessee-company were entitled to use the vehicles of the assessee-company for their personal use as per the terms and conditions on which they were appointed, it was not proper on the part of the Assessing Officer to disallow one-sixth of the expenditure incurred by the assessee on maintenance of its vehicles. Section 309 of the Companies Act, 1956 provides the modality for determining the remuneration payable to directors, including any managing or full-time director. Such remuneration is pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is a private limited company. it is assessable as a distinct assessable entity, as per the definition of person' under section 2(31) of the Act. The Hon'ble High Court clearly held that 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. While coming to the aforesaid conclusion, Hon'ble High Court followed the decision from Hon'ble Madras High Court in CIT v/s L.G. Ramamurthi (1977) 110 ITR 543 (Mad.). No contrary decisions or facts were brought to our notice by the Revenue. Thus, respectfully following the aforesaid decision from Hon'ble High Court, these grounds of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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