SOUTHLAND CONSTRUCTIONS (INDIA) PRIVATE LIMITED,COIMBATORE vs. ITO CORPORATE WARD 3, COIMBATORE

Having heard rival submissions and after going through relevant material on record, our adjudication would be as given in succeeding paragraphs.

The dispute stem from the fact that the assessee purchased a car in during April, 2013 in the name of one of the Director. For the said reason, Ld. AO denied depreciation claim of Rs.6.02 Lacs. During appellate proceedings, the assessee submitted that the vehicle was used for the business purposes. The payments were made by the assessee towards purchase of car. The interest paid on loan to purchase the car was claimed as well as allowed and therefore, the assessee was eligible to claim the depreciation in terms of decision of Hon’ble Supreme Court in Mysore Minerals Ltd. V/s CIT (239 ITR 775). 4. We find that it is undisputed fact that the assessee made payment of the car and it was also allowed interest paid on repayment of loan. There are no findings that the car was being used for the purpose of business. Therefore, merely because it was registered in the name of director would not vitiate depreciation claim of the assessee. The assessee has placed on record affidavit of the director wherein it has been confirmed that the vehicle was purchased by the assessee out of its own funds and the car was being used for business purposes only. Therefore, on the facts of the case, the depreciation claim would be allowable to the assessee as held by Ahmedabad Tribunal in the case of Sanatosh Starch Ltd. V/s DCIT (ITA No.1884/Ahd/2010 dated 19/11/2010) as relied upon by Ld. AR. Therefore, we direct Ld. AO to allow the depreciation.