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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI D.T. GARASIA, J.M. & SHRI ASHAWANI TANEJA, A.M
Appellant By:- Shri Rahul Raman,(CIT D.R.) Respondent By:- Shri Brijmohan Pooranmal Agarwal Date of hearing:- 01/02/2017 Date of Pronouncement:- 22/03/2017 O R D E R PER D. T. GARASIA, JM:
The captioned appeal by the Revenue is directed against the order of the CIT(A)-08, Mumbai dated 27/02/2015, pertaining to the Assessment Year 2010-11, which in turn has arisen from the order passed by the Assessing Officer dated 20/03/2013 under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).
The Only ground in this appeal reads as under:
"Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified 2 ALD Automotive P. Ltd. in allowing depreciation to the assessee on vehicles given on lease without appreciating the fact that the vehicles were not registered in the name of the assessee's name but in the name of the parties using the vehicles and the same were also directly delivered to the parties using it."
The short facts of the case are as under:
The assessee has claimed that it is giving vehicles on operating lease basis and accordingly it claimed depreciation on the vehicles leased. However, the vehicles are registered in the name of the parties who are using them and not in the name of the assessee. The assessee contended that he was giving vehicles on operating lease basis and accordingly to claimed depreciation on the vehicle leased, but the A.O. disallowed the depreciation.
The matter travelled to CIT(A) and CIT(A) has allowed the claim of the assessee by observing as under:-
“The issue is covered by the judgment of the Hon'ble Supreme Court in the case of ICDS Ltd. us CIT (2013) 350 ITR 527, wherein it has been held that section 2 (30) of the Motor Vehicle Act is a deeming provision that creates a legal fiction of ownership in favour of lessee only for the purpose of the Motor Vehicle Act. It has been held there in that the lessor, the assessee was the owner of the vehicles. As the owner, it used the assets in the course of its business, satisfying both requirements of section 32 of the Act and hence was entitled to claim of depreciation in respect of addition made to the trucks, which were leased out.
I find from para 4.3 of the assessment order that the AO has 3 ALD Automotive P. Ltd. relied on the assessment passed u/s. 143(3) dated 30th December, 2010 for A.Y. 2008-09 in making an addition of Rs. 52,17,62,572/-. He has not brought on record any new material while making the above addition for the A.Y. 2010-11. In view of the similar facts in the present case and the position of law enunciated by the Hon'ble Supreme Court delineated here-in- above, the addition of Rs. 52,17,62,572/- made by the AO is deleted”.
The Ld. AR submitted that a similar issue had assessee in assessee’s own case for AY 2007-08 to 2009-10 wherein the Tribunal has dismissed the appeal of the and therefore, the departmental appeal may be dismissed.
The Ld. D.R. has no objection if the matter is decided accordingly.
We have heard the rival contention of both the parties. Looking to the facts and circumstances of the case we find that the issue in controversy is covered in AY 2007-08 and 2008-09 dated 25/07/2016 and in AY 2009-10 dated 20/07/2016 wherein the Tribunal has held as under: “We find that, as observed by the learned CIT(A), that the issue is covered by the decision from Hon’ble Apex Court in ICDS Ltd. vs. CIT (2013) 350 ITR 527 wherein it has been held that section 2(3) of the Motor Vehicle Act is a deeming provision that creates a legal fiction of ownership in favour of lessee only for the purpose of the Motor Vehicle Act. It has been held there in that the lessor, the assessee was the owner of the vehicles. As the owner, it used the assets in the course of its business, satisfying both requirements of section 32 of the Act and hence was entitled to claim of depreciation in respect of addition made to the trucks, which were leased out. However, we are 4 ALD Automotive P. Ltd. making it clear that the learned Assessing Officer is to satisfy himself whether the parties who are using the vehicles may not get the benefit of depreciation and if it is found that the depreciation is claimed by the assessee as well as the parties who are using the vehicles, in that case the learned Assessing Officer is free to take a decision in accordance with law. With these remarks the stand taken by the learned CIT(A) is affirmed.” 8. We respectfully following the same the Tribunal order we dismissed the Departmental appeal.