TaxTMI 
TaxTMI 
2008 (6) TMI 269
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..... 8,30,075 to the assessee without appreciating the facts that the trucks in question were registered in the name of assessee's husband and it was only a sham arrangement to avoid the incidence of tax as no actual transfer of trucks took place. 3. That the learned CIT(A) erred in law and on facts in deleting the addition of Rs. 2,20,979 out of total addition of Rs. 4,56,979 made to the assessee's income on account of unexplained credits, without properly appreciating the facts and the circumstances of the case. 4. That the order of the learned CIT(A) being erroneous in law and on facts be vacated and the order of the AO restored." 3. In assessee's appeal, main ground is against holding that a sum of Rs. 2,36,000 remained unexplained in the hands of the assessee and second ground, which according to the learned Authorised Representative goes to the root of the matter is about making addition of Rs. 2,36,000 which was beyond the scope of limited scrutiny. 4. Now, we take up Revenue's appeal first. 5. The Revenue is aggrieved against the decision of the learned CIT(A) wherein he has allowed the claim of depreciation to the assessee on five trucks which she claims to hav....
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..... 1 is decided in favour of the appellant." 8. Before us, the learned Departmental Representative supported the order of the AO whereas the learned Authorised Representative relied on the order of the learned CIT(A) and various authorities cited by him before the learned CIT(A). 9. We have considered the rival submissions and perused the material on record. In our considered view, there is no case for interference in the order of the learned CIT(A) on this issue. The Hon'ble Delhi High Court in the case of CIT vs. Basti Sugar Mills Co. Ltd. held that even if vehicles are not registered in the name of the assessee but assessee is using them and declaring income, he is entitled for depreciation. In that case, it was held that the transfer of movable property is not a condition precedent for legal ownership. Further, issue is covered in favour of the assessee by several decisions such as CIT vs. Salkia Transport Associates (1983) 33 CTR (Cal) 198 : (1983) 143 ITR 39 (Cal), Continental Construction Ltd. vs. CIT (1990) 85 CTR (Del) 116 : (1990) 185 ITR 178 (Del), CIT vs. Dilip Singh Sardarsingh Bagga (1993) 201 ITR 995 (Bom) and CIT vs. Mirza Ataullaha Baig & Anr. (1993) 202 ITR 2....
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.... in his business. The very concept of depreciation suggests that the tax benefit on account of depreciation legitimately belongs to one who has invested in the capital asset and is utilising the capital asset and thereby losing gradually the investment caused by wear and tear, and would need to replace the same by having lost its value fully over a period of time. It is well-settled that there cannot be two owners of the property simultaneously and in the same sense of the term. The intention of the legislature in enacting s. 32 of the Act would be best fulfilled by allowing deduction in respect of depreciation to the person in whom for the time-being vests the dominion over the building and who is entitled to use it in his own right and is using the same for the purposes of his business or profession. Assigning any different meaning would not subserve the legislative intent." 11. Following the above decision, Hon'ble Delhi High Court (Full Bench) in the case of Gowersons Publishers (P) Ltd. vs. CIT held that assessee, in whose favour sale deed was not executed but it was using factory building for the purposes of its business, it was entitled for depreciation. Once assessee has....
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....under the Motor Vehicles Act or that the vehicle stood in the name of the vendor in the records of the authorities under the Motor Vehicles Act." 14. As a result, we hold that mere non-registration of vehicles under Motor Vehicles Act will not disentitle an assessee for claiming depreciation. The purpose of registration under Motor Vehicles Act is different. It permits an assessee to ply the vehicle in any public place. It does not indicate a legal evidence of ownership. If a vehicle is registered in the name of a person, the presumption is that he is a legal owner of the vehicle but where the vehicle is not registered in the name of the assessee then it is not a presumption that assessee is not the owner of the vehicle. The ownership of the vehicle has to be determined from finances utilized in making purchases of vehicles, its control and management, use of the same as an apparatus for earning income. declaring income earned from these vehicles as assessee's in the return of income and their acceptance by the Department and there being no counter claim against such declaration. Since as facts stand, depreciation has been disallowed merely on the ground that vehicles are not re....
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....sp; Department of Revenue, CBDT New Delhi, the 28th June, 2002 All Chief CITs. All Directors General of IT Sir, Subject: Guidelines in respect of Limited scrutiny under s. 143{2}(i) After the introduction of the concept of limited scrutiny vide amendment to s. 143(2) by the Finance Act, 2002 (Effective from 1st June, 2002) it has been decided that the following procedure shall be adopted for the limited scrutiny under s. 143(2)(i) of the IT Act. 1. In case the AO has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, he shall serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce any evidence or particulars specified therein or on which the assessee may rely, in support of such claim. 2. A notice is to be issued in the prescribed performa for limited ....
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.... month. Sd/- (Sangeeta Gupta) Director (ITA. II) &....
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.... the assessee on the basis that this was not taken before the lower authorities. He submitted that in case this ground is admitted for adjudication by the Tribunal then it should go back to the learned CIT(A) for deciding the same in view of the decision of Hon'ble Madhya Pradesh High Court in the case of CIT vs. Tollaram Hassomal (2006) 202 CTR (MP) 317 : (2008) 298 ITR 22 (MP). He also referred to the decision of Hon'ble Kerala High Court in the case of K.J. Thomas vs. CIT (2008) 4 DTR (Ker) 98 : (2008) 301 ITR 301 (Ker) for the proposition that failure to give notice under s. 143(2) will not invalidate the assessment. 21. On the other hand, the learned Authorised Representative submitted that admissibility of ground cannot be questioned on the basis of decision of Hon'ble Allahabad High Court referred to by the learned Departmental Representative because those decisions were given in the context of s. 120/124. There was no challenge to issuance of notice under s. 143(2)(i). In view of the decision of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC), the ground is required to be admitted and adjudica....