2015 (10) TMI 2722 - HC - Income Tax

Depreciation claim u/s 32 - asset used by directors of the Assessee company - claim of foreign Assessee company in relation to certain vehicles registered under its name, but given to its employees for their use - Held that - As relied upon the decision of Sayaji Iron and Engineering Company v. CIT 2001 (7) TMI 70 - GUJARAT HIGH COURT where it was held that once the directors of the Assessee company are entitled to use the vehicles of the company for their personal use as per the terms and conditions of their appointment, it cannot be said that the same was a personal expenditure. In other words, it continues to be business expenditure and is not disallowable as such. The Court is not persuaded to hold a different view in the matter - decided in favour of assessee.

Summary

The Delhi High Court dismissed the Revenue's appeal against the ITAT's order allowing depreciation claim for vehicles given to employees for personal use by a foreign Assessee company. The Court relied on a Gujarat High Court decision stating that such usage is business expenditure and not personal expenditure. No substantial question of law arose in the matter.