Assessee entitled to depreciation on vehicle purchased but not registered in his name

Mere fact, being the vehicle not standing in the name of the assessee, cannot be a reason for making or sustaining any disallowance on the account of motor car expenses. So long as the expenses are incurred on the motor vehicles for the purpose of business, the same have to be allowed as deduction. The Hon’ble Jurisdictional High Court in the case of CIT vs. Mirza Ataullaha Baig and other (1993) 202 ITR 291 (BOM) has held the assessee to be entitled to depreciation on vehicle purchased which was not registered in the assesses’s name. In the light of this judgment and several other judgments on the same issue we hold that this reason of the A.O. for making the disallowance of expenses cannot be sustained. Be that as it may, it is observed from the assessment order that the assessee did not have complete details in respect of motor car expenses because no log book etc. were maintained. Considering the totality of the facts and circumstances of the present case, in our considered opinion, it will be just and fair if 10% of the total motor car expenses, in respect of all the 9 cars, are held to be relatable to be personal use by the partners of the firm. We accordingly sustain the disallowance at Rs. 82,859/-

INCOME TAX APPELLATE TRIBUNAL, MUMBAI

ITA Nos. : 2915 & 2916/Mum/2007, 6035/Mum/2007, 

6785/Mum/2007, 2247 & 2248/Mum/2007

Assessment Years: 2002-03 & 2003-04

Please become a Premium member. If you are already a Premium member, login here to access the full content.