TaxTMI 
TaxTMI 
2001 (7) TMI 70
X X X X Extracts X X X X
X X X X Extracts X X X X
....ribunal was right in law in disallowing 1/6th of the total car expenses and depreciation claimed by the assessee because of the personal, use of the car entrusted to the director by him?" The learned advocate, Shri Manish Shah, for Mr. J. P. Shah, has appeared for the applicant-assessee whereas the learned advocate, Shri Bharat Naik, has appeared for the respondent. The assessee is a private limited company. For the purpose of its business it owned several vehicles. For the assessment year 1979-80, the assessee had incurred expenditure to the tune of Rs.96,653 on the vehicles maintained by it. The assessee had claimed the said amount as business expenditure, but the Assessing Officer came to the conclusion that all the Vehicles of the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for the assessment year 1979-80, for all other assessment years the expenditure incurred by the assessee-company towards the vehicle expenditure was allowed in toto. It has been also submitted that whenever any expenditure incurred by the assessee towards maintenance of vehicles was disallowed by the Assessing Officer, the disallowance was finally set aside. It has been submitted by the learned advocate that as the expenditure was incurred for the purpose of business by way of salary and perquisites given to the directors, the said expenditure ought not to have been disallowed. On the other hand, the learned advocate, Shri Bharat Naik, appearing for the Revenue, has submitted that the directors of the assessee-company were using the vehic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a) any expenditure incurred in providing any rent-free accommodation, etc., (b) any expenditure incurred in providing any other benefit or amenity free of charge or at a concessional rate, (c) any expenditure which would have been incurred by the director but for such expenditure having been incurred by the com pany, (d) any expenditure incurred by the company for the purpose of any insurance on the life, etc. Therefore, it is clear that the expenditure incurred by the assessee-company on maintenance of vehicles which were available to the directors for their personal use would fall within the meaning of "remuneration" as defined in the Explanation to section 198 of the Companies Act, and once such remuneration is fixed as provided in secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....held the order of the Com missioner of Income-tax (Appeals) wherein the Tribunal's earlier orders in the assessee's own case have been distinguished by giving reasons which are, to say the least, unwarranted. The earlier orders of the Tribunal are distin guished by stating that even if there is no personal user of cars by the com pany it would yet be user for "non-business purpose". As already stated hereinbefore once the expenditure in question is in terms as provided in sections 309 and 198 of the Companies Act, 1956, there cannot be any "non-business" purpose in so far as the assessee-company is concerned. In relation to the aforesaid approach of the Commissioner of Income-tax (Appeals) and the Tribunal we cannot do better than reiterat....