CHANDAN CHATTERJEE,BARDHAMAN vs. ITO, WARD - 3(1), ASANSOL

(A.Y. 2021-2022) Chandan Chatterjee Faceless Appeal Centre (NFAC), Delhi dated 02.02.2024 passed for A.Y. 2021-22.

Though the assessee has taken three grounds of appeal, but his grievances revolve around a single issue, namely ld. CIT(Appeals) has erred in disallowing depreciation on vehicles amounting to Rs.11,02,969/-.

Brief facts of the case are that the assessee has filed his return of income on 15.03.2022 declaring total income at Rs.1,12,51,690/-. The case of the assessee was selected for scrutiny assessment and notices under section 143(2)/142(1) were issued and served upon the assessee. A perusal of the accounts, it revealed to the ld. Assessing Officer that the assessee has purchased two dumpers, which were registered as WB37E0916 and WB37E0936. These dumpers were purchased by the assessee on 25.03.2021 and registered with RTO on 05.04.2021. The stand of the assessee was that these vehicles were registered temporarily and they were put to use by him. The assessee has given these vehicles to Jai Balaji Industries Limited on rent @ Rs.15,000/- per month. The assessee claimed the depreciation on these vehicles. The stand of the ld. Assessing Officer was that registration of the vehicles was granted in the month of April so they cannot be construed as put to use before 31st March by the assessee. The ld. CIT(Appeals) further observed that unless the vehicles are pliable on the road, it cannot be construed that asset was used for the purpose of the business. The ld. CIT(Appeals) further recorded that (A.Y. 2021-2022) Chandan Chatterjee the vehicles can be plied on the road once a valid registration certificate is being granted to the assessee.

With the assistance of ld. Representatives, we have gone through the record carefully. We find that both the authorities have miserably failed in appreciating the controversy. The Motor Vehicles Act do provide a temporary registration, which is valid for 30 days, after obtaining that registration, vehicles can be used for all functional purposes. The assessee has demonstrated that he has earned rental income from those Trippers. The ld. D.R. invited our attention towards the report of the Auditor, who has observed that the vehicles were ready for use from 31st March as against 26th March claimed by the assessee. We are of the view that this can be a difference of opinion amongst the assessee vis-à-vis his auditor, but that does not show that the vehicles were not purchased and not to be used. Even if it is used on 31st March, then, depreciation is to be granted. Apart from the above, it is to be observed that even if vehicle was ready to be used, depreciation is to be allowed. It is not necessary that it should be actually used. Therefore, we allow the appeal of the assessee and delete the disallowance.