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Issues: Disallowance of depreciation on a vehicle
Analysis: The only issue in this appeal pertains to the disallowance of depreciation on a vehicle by the Assessing Officer, which was confirmed by the Commissioner of Income-tax (Appeals) (CIT(A)). The Assessing Officer disallowed the depreciation claim on the grounds that the motor car was purchased in the name of the director of the assessee-company and not in the name of the company itself. The Assessing Officer emphasized the ownership of the asset as a condition precedent for allowing depreciation. The CIT(A) upheld this decision, citing relevant case laws and emphasizing the lack of evidence regarding the use of the vehicle for business purposes. The Appellate Tribunal, after considering the submissions and facts of the case, found that the vehicle was purchased using funds from the assessee-company. The Tribunal referred to precedents where courts allowed depreciation even when the vehicle was not registered in the name of the company but was used for business purposes. The Tribunal highlighted that ownership, for the purpose of depreciation, should be interpreted broadly, focusing on the entity that benefits from the property rather than just legal ownership. The Tribunal also noted that the assessee provided evidence of petrol and diesel expenses for the vehicle, demonstrating its business use. In conclusion, the Tribunal disagreed with the lower authorities' decision to disallow depreciation on the vehicle and allowed the assessee's claim. The Tribunal's decision was based on the broader interpretation of ownership for depreciation purposes and the evidence presented regarding the business use of the vehicle. Consequently, the assessee's appeal was allowed, overturning the disallowance of depreciation on the vehicle.
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