17 August 2013
To claim Depreciation on any fixed asset cost of Acquisition is relevant under section 43 (1)
However to claim Depreciation under Income Tax on Car Company can opt to make a sales/Transfer deed at Appropriate Market value of Car on the date of Transfer.
However Car Running & Maintenance Expenses can be claimed without giving any effect of Transfer Deed
Whether, merely because cars were shown as assets in books of account of assessee company, depreciation could not be allowed where cars were registered in name of its directors..
17 August 2013
To get Depreciation under section 32, asset(s) must be used in business of Assessee Company, it doesn't make compulsory that assets should be registered in the name of Assessee.
If its proved in Court of Law then revenue cannot deny to claim depreciation on Asset
The same case is already decided in The Supreme Court, in CIT v. Podar Cement P Ltd. (1997) 226 ITR 625 & Also in Delhi High Court, CIT v. Smt. A. Sivakami and Another (2010) 322 ITR 64
So i will go with the same...what ever be the stand of this issue in before 2013 where as it is recently provided case law...i would like to rely on this.. . .
I stand on my opinion that it is disallowed
Opinion was given with my understanding of tax provisions and cited case laws
17 August 2013
Yes... . . nice to have this discussion..lets see some body will confirm the same . . If that is the case i can say case provided me was latest one (2013 april),,more over it is held by Mumbai ITAT
18 August 2013
In my opinion; if the car has been purchased in the name of the director and one resolution is passed that the "real ownership" is with the company which has paid its cost/loan instalments by cheques . and . the same be used by the company only and in future whenever it would be sold out; . the proceeds be deposited with the company by the director. . . Further the director will use it for the company's business exclusively. . . Although the following discussion is relevant. . http://www.skpgroup.com/newsletters/tax-alerts/skp-tax-alert-VI-7-Depreciation-on-motor-cars-registered-in-the-name-of-directors.html . In my opinion; the above case was not PROPERLY REPRESENTED by the counsel.
Many times what practice is generally followed by the public is taken/misunderstood as acceptable in law. .
CAclubindia
