2016 (7) TMI 683 - AT - Income Tax

Tribunal rules in favor of appellant, emphasizing ownership beyond registration for depreciation claims. Specific evidence crucial for disallowing expenses.

Mangal Singh Palsania Versus Assistant Commissioner of Income-Tax

Mangal Singh Palsania Versus Assistant Commissioner of Income-Tax - [2016] 49 ITR (Trib) 63 Issues:1. Disallowance of depreciation claimed under section 32 of the Income Tax Act.2. Disallowance of trip expenses incurred during business operations.Analysis:Issue 1: Disallowance of DepreciationThe appellant claimed depreciation on 16 tankers, but the Assessing Officer disallowed it as the tankers were not registered in the appellant's name. The Commissioner of Income-tax (Appeals) upheld the disallowance, stating that ownership requires valid registered documents. However, the appellant argued that despite not being the registered owner, they purchased the tankers with loans, used them for business, and paid all related expenses. The appellant relied on legal precedents to support their claim that ownership extends beyond registration. The Tribunal agreed, emphasizing the appellant's possession, dominion, and control over the tankers, allowing the depreciation claim.Issue 2: Disallowance of Trip ExpensesThe Assessing Officer disallowed a portion of trip expenses, alleging lack of specific documentation. The appellant contended that fixed allowances were provided to drivers and helpers, supported by vouchers with signatures. The Tribunal found the disallowance arbitrary and lacking specific instances of non-business expenses. Consequently, the ad hoc disallowance was deleted, and the ground was allowed.In conclusion, the appeal by the assessee was allowed, with the Tribunal ruling in favor of the appellant on both issues. The judgment highlighted the importance of ownership beyond mere registration for depreciation claims and emphasized the necessity of specific evidence for disallowing business expenses.