Appeal granted for depreciation disallowance on motor vehicle under IT Rules

The Tribunal allowed the appeal of the assessee regarding the disallowance of depreciation on a motor vehicle, citing eligibility criteria under the IT Rules. The judgment emphasized adhering to prescribed rates based on the nature of the asset and the assessee's business activities.

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Issues:
1. Delay in filing appeal condonation
2. Disallowance of depreciation on motor vehicle

Delay in filing appeal condonation:
The appeal was directed against the order of ld. CIT(A)-IV, Baroda dated 13.03.2013 relating to Asst. Year 2009-10, framed by DCIT, Kheda Circle, Nadiad on 29/11/2011. The appeal was time-barred by 29 days, but the delay was condoned as the assessee had a reasonable cause due to awaiting the outcome of an application for rectification. The Tribunal accepted the delay condonation and proceeded to adjudicate the appeal.

Disallowance of depreciation on motor vehicle:
The case involved disallowance of depreciation on a motor vehicle purchased by the assessee, a limited company engaged in the business of marketing bidi. The Assessing Officer disallowed excess depreciation claimed on a new motor car, stating that as the assessee was not in the business of hiring cars, the depreciation rate should be 15% instead of 50%. The ld. CIT(A) upheld the disallowance. The Tribunal, however, considered the specific provisions of depreciation rates under the IT Rules and held that the assessee was eligible for claiming depreciation at 50% on the motor vehicle purchased in March 2009, falling under a special category for new commercial vehicles. Citing a similar case from the Mumbai Bench, the Tribunal allowed the appeal and deleted the disallowance of depreciation.

In conclusion, the Tribunal allowed the appeal of the assessee concerning the disallowance of depreciation on the motor vehicle, based on the eligibility criteria under the IT Rules. The judgment highlighted the specific provisions for claiming depreciation on assets and emphasized the importance of adhering to the prescribed rates based on the nature of the asset and the business activities of the assessee.

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