Case Law Details
Mukesh Trends Lifestyle Limited Vs DCIT (ITAT Ahmedabad)
In the case of Mukesh Trends Lifestyle Limited Vs DCIT (ITAT Ahmedabad), a significant dispute unfolded over the eligibility of depreciation on a car utilized for business purposes, registered under the name of the company director. The intricacies of ownership, usage, and legal interpretations came to the forefront in this case, highlighting the complexities inherent in tax assessments and the importance of clear delineation between personal and business assets.
Background:
The crux of the matter revolves around the depreciation claim made by Mukesh Trends Lifestyle Limited on an Audi Q7, a vehicle ostensibly purchased in the name of one of its directors. However, the financial backing for the purchase emanated from the company’s coffers, leading to a contentious argument over ownership and entitlement to depreciation benefits.
The DCIT, Circle – 2(1)(2), Ahmedabad, in an assessment for the year 2017-18 under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961, disallowed the depreciation claimed by the company on the grounds that the car was registered under the director’s name. This decision was subsequently upheld by the National Faceless Appeal Centre (NFAC), Delhi, prompting the company to challenge the ruling before the Income Tax Appellate Tribunal (ITAT) Ahmedabad.
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