Appellant wins depreciation claim on company vehicles despite directors' registration.

The ITAT allowed the appellant's claim for depreciation on vehicles registered in directors' names but owned and used by the company for business purposes. The judgment emphasized the company's financial ownership and control over the assets, disregarding registration details. The decision was supported by precedents from Pune and Mumbai Tribunals, consistent with allowing depreciation claims in similar cases. The ITAT reversed the CIT(A)'s decision, directing the Assessing Officer to permit the depreciation claim on the vehicles.

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Issues:
Claim for depreciation on motor cars registered in the name of directors of the company.

Analysis:
The appellant contested the rejection of the claim for depreciation on motor cars registered in the directors' names, arguing that the company, being the real owner, was entitled to depreciation as the vehicles were used for business purposes. The Assessing Officer disallowed the claim, stating the legal owners were the directors. The CIT(A) upheld this decision, citing a Mumbai Tribunal case. The appellant, however, relied on a Pune Tribunal case and argued that the vehicles were assets of the company, with costs and usage borne by the company. The appellant also highlighted Pune and Mumbai Tribunal judgments supporting depreciation claims in similar cases. The Revenue contended that as the vehicles were in the directors' control, no depreciation should be allowed.

The ITAT noted that the vehicles were funded by the company, appeared in its balance sheet, and were used for business purposes, despite being registered in the directors' names. Citing the concept of financial ownership, the ITAT held that the company was entitled to depreciation as the assets were utilized for business and under its control. Referring to Pune Tribunal cases, the ITAT allowed the appellant's claim, emphasizing that registration in directors' names did not negate ownership. The ITAT disagreed with the CIT(A)'s reliance on the Mumbai Tribunal case, noting favorable decisions by both Pune and Mumbai Tribunals in similar contexts. Consequently, the ITAT reversed the CIT(A)'s decision and directed the Assessing Officer to allow the depreciation claim on the vehicles. The appeal was thus allowed.

In conclusion, the ITAT ruled in favor of the appellant, allowing the claim for depreciation on vehicles registered in the directors' names but owned and used by the company for business purposes. The judgment emphasized the company's financial ownership and control over the assets, disregarding the registration details. The decision was supported by precedents from both Pune and Mumbai Tribunals, highlighting the consistent allowance of depreciation claims in similar cases.

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