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TMI Blog2013 (2) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. Before us, the grounds of appeal raised by the assessee read as under:- 1.1 That the Hon ble CIT(A) has erred in confirming disallowance of 50 % discount of ₹ 2,64,460/- out of total discount of ₹ 5,28,920/- being claimed by the appellant. 1.2 That the various findings given by the ld. CIT(A) in confirming the disallowance of discount of ₹ 2,64,460/- are contrary to the facts of the case and evidence on record. 1.3 That appellant respectfully submits that it has granted discount on account of various reasons and circumstances like market share, RTO, Income charges. The appellant refers and relies on various submissions made in its letter dated 10.12.2008 and requests that the same may be specifically treated as agitated here also. The learned Assessing Officer has disallowed discount expenses by stating that the appellant has allowed excess discount than what is stated in TELCO circular. The above fact has also been confirmed by CIT(A). But actually there is no such binding on the dealers for discount to be given in excess of what is mentioned in TELCO circular. 1.4 That appellant therefore submits that the disallowance of ₹ 2,64,460/- bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiries and adjudicate the addition after giving opportunity of hearing to the assessee. He placed on record the copy of the aforesaid order of Tribunal. He further submitted that since the facts of the case in the year under appeal are identical to that of A.Y. 2005-06, similar directions may be issued in the year under appeal. The Ld. D.R., on the other hand, relied on the order of A.O. 8. We have heard the rival submissions and perused the material available on record. The facts of the case of the issue under appeal are identical to that of A.Y. 2005-06 has been confirmed by the AO and by CIT(A) in their orders and therefore is undisputed fact. The Co-ordinate Bench while deciding the issue for A.Y. 2005-06 had followed the order of A.Y. 2003-04 (in ITA No.1213/Ahd/2007 dated 10/12/2010) and has held as under:- 7. Having heard both the sides, we have carefully gone through the orders of authorities below. For the assessment year 2003-04, 1TAT, 'C Bench, Ahmedabad has decided the appeal of the assessee in ITA No. 1213/AHD/2007 vide order dated 10.12.2010. In that order, this issue has been restored to the file of Assessing Officer for the detailed reasons given in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns taking the delivery of the cars from the assessee. According to the AO since the assessee has shown that the signatures on the discount vouchers invariably tally with the signatures of the customers on the delivery notes, the discount vouchers produced by the assessee become doubtful. The AO further observed that in the instant case, the discounts allowed do not represent the expenditure wholly and exclusively incurred for the purpose of the business of the assessee. Aggrieved, the assessee preferred appeal before CIT(A) and field the details of discount as under:- (A) Discounts allowed to the customers by allowing them to make short payments against the bill Value of cars 15,95,088/- (B) Discounts allowed to the customers by making payments of discounts amounts to them since they had made full payments against the bill value of sale of cars on account of obtaining car finance form financial institutes/banks 19,24,387/- Total 35,19,475/- Before the CIT(A) it was submitted that the assessee has filed copy of sales bills and the respective customers ledger accounts, it was shown to the A.O that in respect of such customers, 95% to 98% of sales value of cars were rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the discount account. Again, it is a fact known to all that now a days the customers bargain heavily while purchasing the cars which the dealers on account of cut throat competition amongst the various car dealers of the various companies and also amongst more than one car dealers of the same company. In that view of the matter, what the appellant has been claiming is not something which is unusual or unacceptable. The claim of the appellant therefore that if allowed is discounts of ₹ 15,95,088/- represented by short payments made by the customer is found to be correct and acceptable. We further find that eh CIT(A) has relied orders in the case of the assessee for assessment years 2001-02 and 2003-04 respectively, in assessee s own case, whereby CIT(A)-IV, Surat has allowed the claim of the assessee. 5. In view of the above facts that the assessee being a dealer of motor car has allowed discount to the customers as well as commission, i.e. short payment account, sale of value of cars and for this the assessee has produced all sale bills, copy of all ledger a/c. of such customers which prove that in the cases of customers initially the customer s accounts were d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in assessee s own case for the earlier two assessment years (supra) and re-adjudicate this addition after giving opportunity of being heard to the assessee. 9. Since the facts of the issue in appeals in the year under appeal are identical by that earlier years, we respectfully following the decision of Coordinate Bench for A.Y. 2005-06 restore the issue of disallowance of discount amount to ₹ 2,64,460/- to the file of A.O with similar directions. This ground of the assessee is thus allowed for statistical purposes. 10. Ground No 2.1 to 2.4 are with respect to disallowance of depreciation of ₹ 1,56,152/-. 11. On perusal of the depreciation statement, the AO observed that the assessee has claimed depreciation on car of ₹ 1,15,652/-. Further on perusing the copies of R C book, the AO observed that the cars were registered in the personal name of the director. He was of the view that an assessee is eligible to claim depreciation when the asset is purchased by the assessee and used by it for the purpose of business. In the case of assessee, the AO was of the view that since the asset is not in the name of assessee, depreciation cannot be allowed on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r who claimed that asset was used for business. Now coming to the issue of ownership of the vehicle purchased in the name of the Director, Hon ble Delhi High Court in the case of M. M. Fisheries Pvt Ltd (Supra) held that- The ownership of an asset in his personal capacity by the director of the company, cannot be an asset deemed to be in the vested ownership or beneficial utility of the company. They are two distinct and independent legal entities. This is not a question of law, but is primarily a question of fact. The Hon'ble Delhi High Court considered and examined its own decision in the case B. L Passi (2002) 254 ITR 225 and Mysore Mineral Ltd (1999) 239 ITR 775 (SC) as relied by the assessee and held that they are not applicable and misplaced with the fact of the case of the assessee. It is therefore, the AO is justified in making the disallowance. The ground of appeal of the appellant is rejected. 12. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 13. Before us the ld. A.R. submitted that the car has been purchased out of the funds of the company and the same is reflected in its balance sheet even though the car is registered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer was not recorded under the Motor Vehicles Act or that the vehicle stood in the name of a director of the assessee company in the records of the authorities under the Motor Vehicles Act. 5.1 The aforesaid view is supported by the decision in the case of CIT Vs. Navdurga Transport Co., 235 ITR 150 (All), wherein the issue was as to whether firm was entitled to depreciation on cars, brought in to the firm for use of business of the firm, even through cars continued to be registered in the name partners. Hon ble Allahabad High Court held that the Tribunal rightly reached the conclusion that the assessee owned and used the three vehicles within the meaning of s. 32 of the Act. Similar view was taken in the case of CIT Vs, Mohd. Bus Shokat Ali (No.2), 256 ITR 357 (Raj), CIT Vs Fazilka Dabwali TPT Co. Ltd (2004) 270 ITR398 (P H), CIT v. Salkia Transport Associates [1983] 143 ITR 39/13 Taxman 191 (Cal.), CIT v. Nidish Transport Corpn. [1910] 185 ITR 669/[1989] 44 Taxman 351(Ker.), CIT v. Dilip Singh Bagga [1993] 201 ITR 995/[1994] 77 Taxaman 66 (Bom), CIT v Navdurga Transport Co. [1999] 235 ITR 158 (All.) and CIT v Basti Sugar Mills Co. Ltd. [2002] 257 ITR 88/123 Taxman 693 (De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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