KEDIA SHARES & STOCK BROKERS LTD, MUMBAI V. ASST CIT CIR 4(3), MUMBAI

ITA 6128/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3174 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 18-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MURLIDR
• Assessee Lawyers: RISHABH S HAH
• Keywords: Capital asset; Depreciation; Scheme of amalgamation; Capital expenditure
• Section: 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.6128/MUM/2013 ASSESSMENT YEAR-2010-11 KEDIA SHARES & STOCK BROKERS LIMITED, 418, COMMERCE HOUSE, 140, NAGINDAS MASTER ROAD, MUMBAI-400023 / VS. ACIT, CIRCLE-4(3), ROOM NO.649, 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 PAN NO. AAACK2528E ( / APPELLANT) ( / RESPONDENT) ! / ASSESSEE BY MR. RISHABH SHAH ' / REVENUE BY SHRI M. MURLI -DR # '$ % !& / DATE OF HEARING : 31/03/2016 % !& / DATE OF ORDER: 01/04/2016 ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 23/08/2013 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTA INS TO SUSTAINING DISALLOWANCE OF RS.1,88,364/- ON ACCOUNT OF DEPRECIATION ON MOTOR CAR, IGNORING THE FACTS AND T HE PROVISIONS OF THE LAW. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI RISHABH SHAH, ADVANCED ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED BY SUBMITTING THAT T HE IMPUGNED ISSUE IS COVERED BY THE DECISION FROM HON BLE JURISDICTIONAL HIGH COURT IN CIT VS MIRZA ATTAULLA BAIG & ORS. (202 ITR 291) (BOM.), CIT VS SALKIA TRANSPORT ASSOCIATES 143 ITR 39 (CAL.) AND CIT VS NIDISH TRAN SPORT CORPORATION 185 ITR 669 (KERALA). 2.1. ON THE OTHER HAND, SHRI M. MURLI, DEFENDED TH E CONCLUSION, ARRIVED AT IN THE ASSESSMENT ORDER/IMPU GNED ORDER BY CONTENDING THAT THE DIRECTOR IS NOT THE OW NER OF THE MOTOR CAR, THEREFORE, THE CLAIM OF DEPRECIATION WAS RIGHTLY REJECTED. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE CLAIMED DEPRECIATION ON A MOT OR CAR, WHICH WAS REGISTERED IN THE NAME OF THE DIRECTOR, S HRI ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 3 NARENDRA KEDIA, DURING FINANCIAL YEAR 2009-10. THE CAR WAS EXCLUSIVELY CLAIMED TO BE USED FOR BUSINESS PUR POSES. HOWEVER, THE LD. ASSESSING OFFICER DENIED THE CLAIM ED RELIEF ON THE PLEA THAT THE CAR IS REGISTERED IN THE NAME OF THE DIRECTOR, THEREFORE, IS NOT THE PROPERTY OF THE ASS ESSEE FIRM. ON APPEAL, BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL), THE STAND OF THE ASSESSING OFFICER WAS AF FIRMED. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBU NAL. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT OR DER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT THERE ARE VARIOUS DECISIONS IN FAVOUR AND AGAINST THE ASSESSEE. THE C LAIMED DEPRECIATION WAS DISALLOWED BY THE LD. ASSESSING OF FICER MERELY ON THE GROUND THAT THE VEHICLE WAS REGISTERE D IN THE NAME OF THE DIRECTOR OF THE ASSESSEE COMPANY BUT HA S NOT DISPUTED THAT THE VEHICLE WAS USED EXCLUSIVELY FOR B USINESS PURPOSES. VARIOUS INSERTIONS HAVE BEEN MADE AT DIF FERENT TIMES BY THE FINANCE ACT. DEPRECIATIONS MEANS A D ECREASE IN THE VALUE OF PROPERTY THROUGH WEAR AND TEAR, DETERIORATION OR OBSOLESCENCE, MEANING THEREBY, IT IS INHERENT DECLINED IN THE VALUE OF THE ASSET. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RE LEVANT PROVISION OF SECTION 32OF THE ACT FOR READY REFEREN CE AND ANALYSIS:- ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 4 32. (1) IN RESPECT OF DEPRECIATION OF ( I ) BUILDINGS, MACHINERY, PLANT OR FURNITURE, BEING TANGIBLE ASSETS; ( II ) KNOW-HOW, PATENTS, COPYRIGHTS, TRADE MARKS, LICEN CES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGH TS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTE R THE 1 ST DAY OF APRIL, 1998, OWNED, WHOLLY OR PARTLY, BY THE ASSESSEE AND USED F OR THE PURPOSES OF THE BUSINESS OR PROFESSION, THE FOLLOWING DEDUCT IONS SHALL BE ALLOWED (2) IN THE CASE OF ASSETS OF AN UNDERTAKING ENGAGED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER, SUCH PERCENTA GE ON THE ACTUAL COST THEREOF TO THE ASSESSEE AS MAY BE PRESC RIBED 10 ; ( II ) IN THE CASE OF ANY BLOCK OF ASSETS, SUCH PERCENT AGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED 11 : PROVIDED THAT NO DEDUCTION SHALL BE ALLOWED UNDER THIS CLAU SE IN RESPECT OF (2) ANY MOTOR CAR MANUFACTURED OUTSIDE INDIA, WHERE SUC H MOTOR CAR IS ACQUIRED BY THE ASSESSEE AFTER THE 28 TH DAY OF FEBRUARY, 1975 BUT BEFORE THE 1 ST DAY OF APRIL, 2001, UNLESS IT IS USED (2) IN A BUSINESS OF RUNNING IT ON HIRE FOR TOURISTS ; OR ( II ) OUTSIDE INDIA IN HIS BUSINESS OR PROFESSION IN A NOTHER COUNTRY ; AND ( B ) ANY MACHINERY OR PLANT IF THE ACTUAL COST THEREO F IS ALLOWED AS A DEDUCTION IN ONE OR MORE YEARS UNDER AN AGREEMENT ENTERED INTO BY THE CENTRAL GOVERNMENT UNDER SECTION 42 : PROVIDED FURTHER THAT WHERE AN ASSET REFERRED TO IN CLAUSE ( I ) OR CLAUSE ( II ) OR CLAUSE ( IIA ) 12 [ OR THE FIRST PROVISO TO CLAUSE ( IIA ) ] , AS THE CASE MAY BE, IS ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR THE PURPOSES OF BUSINESS OR PROFESSION FOR A PERIOD OF LESS THAN ONE HUNDRED AND EIGHTY DAYS I N THAT PREVIOUS YEAR, THE DEDUCTION UNDER THIS SUB-SECTION IN RESPE CT OF SUCH ASSET SHALL BE RESTRICTED TO FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET UNDER CLAUSE ( I ) OR CLAUSE ( II ) OR CLAUSE ( IIA ), AS THE CASE MAY BE : FOLLOWING THIRD PROVISO SHALL BE INSERTED AFTER THE SECOND PROVISO TO CLAUSE ( II ) OF SUB-SECTION (1) OF SECTION 32 BY THE FINANCE ACT, 2015, W.E.F. 1-4-2016 : PROVIDED ALSO THAT WHERE AN ASSET REFERRED TO IN CLAUSE ( IIA ) OR THE FIRST PROVISO TO CLAUSE ( IIA ) , AS THE CASE MAY BE, IS ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR THE PURPOSES OF BUSINESS FOR A PERIOD OF LESS THAN ONE HUNDRED AND ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 5 EIGHTY DAYS IN THAT PREVIOUS YEAR, AND THE DEDUCTIO N UNDER THIS SUB-SECTION IN RESPECT OF SUCH ASSET IS RESTRICTED TO FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET UNDER CLAUSE ( IIA ) FOR THAT PREVIOUS YEAR, THEN, THE DEDUCTION FOR THE BALANCE FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR SUCH ASSET UNDER CLAUSE ( IIA ) SHALL BE ALLOWED UNDER THIS SUB-SECTION IN THE IMMEDIATELY S UCCEEDING PREVIOUS YEAR IN RESPECT OF SUCH ASSET: PROVIDED ALSO THAT WHERE AN ASSET BEING COMMERCIAL VEHICLE IS ACQUIRED BY THE ASSESSEE ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998 BUT BEFORE THE 1 ST DAY OF APRIL, 1999 AND IS PUT TO USE BEFORE THE 1 ST DAY OF APRIL, 1999 FOR THE PURPOSES OF BUSINESS OR PROFESSION, THE DEDUCTION IN RESPECT OF SUCH ASSET SHALL BE ALLOWED ON SUCH PERCENTAGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED. EXPLANATION. FOR THE PURPOSES OF THIS PROVISO, (2) THE EXPRESSION COMMERCIAL VEHICLE MEANS HEAVY GO ODS VEHICLE, HEAVY PASSENGER MOTOR VEHICLE, LIGHT M OTOR VEHICLE, MEDIUM GOODS VEHICLE AND MEDIUM PASSEN GER MOTOR VEHICLE BUT DOES NOT INCLUDE MAXI-CAB, MO TOR-CAB, TRACTOR AND ROAD-ROLLER; ( B ) THE EXPRESSIONS HEAVY GOODS VEHICLE, HEAVY PA SSENGER MOTOR VEHICLE, LIGHT MOTOR VEHICLE, MEDIUM GOOD S VEHICLE, MEDIUM PASSENGER MOTOR VEHICLE, MAXI-C AB, MOTOR-CAB, TRACTOR AND ROAD ROLLER SHALL HAVE THE MEANINGS RESPECTIVELY AS ASSIGNED TO THEM IN SECTIO N 2 OF THE MOTOR VEHICLES ACT, 1988 (59 OF 1988): PROVIDED ALSO THAT, IN RESPECT OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 1991, THE DEDUCTION IN RELATION TO ANY BLOCK OF ASSETS UNDER THIS CLAUSE SHALL, IN THE CASE OF A COMPANY, BE RESTRICTED TO SEVENTY- FIVE PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE, ON THE WRI TTEN DOWN VALUE OF SUCH ASSETS, PRESCRIBED UNDER THIS ACT IMMEDIATE LY BEFORE THE COMMENCEMENT OF THE TAXATION LAWS (AMENDMENT) ACT, 1991: PROVIDED ALSO THAT THE AGGREGATE DEDUCTION, IN RESPECT OF DEPRECIATION OF BUILDINGS, MACHINERY, PLANT OR FURN ITURE, BEING TANGIBLE ASSETS OR KNOW-HOW, PATENTS, COPYRIGHTS, T RADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMME RCIAL RIGHTS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ALLOWABLE T O THE PREDECESSOR AND THE SUCCESSOR IN THE CASE OF SUCCESSION REFERRE D TO IN CLAUSE ( XIII ), CLAUSE ( XIIIB ) AND CLAUSE ( XIV ) OF SECTION 47 OR SECTION 170 OR TO THE AMALGAMATING COMPANY AND THE AMALGAMATED COM PANY IN THE CASE OF AMALGAMATION, OR TO THE DEMERGED COMPAN Y AND THE ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 6 RESULTING COMPANY IN THE CASE OF DEMERGER, AS THE C ASE MAY BE, SHALL NOT EXCEED IN ANY PREVIOUS YEAR THE DEDUCTION CALCULATED AT THE PRESCRIBED RATES AS IF THE SUCCESSION OR THE AM ALGAMATION OR THE DEMERGER, AS THE CASE MAY BE, HAD NOT TAKEN PLACE, AND SUCH DEDUCTION SHALL BE APPORTIONED BETWEEN THE PREDECES SOR AND THE SUCCESSOR, OR THE AMALGAMATING COMPANY AND THE AMAL GAMATED COMPANY, OR THE DEMERGED COMPANY AND THE RESULTING COMPANY, AS THE CASE MAY BE, IN THE RATIO OF THE NUMBER OF DAYS FOR WHICH THE ASSETS WERE USED BY THEM. EXPLANATION 1. WHERE THE BUSINESS OR PROFESSION OF THE ASSESSEE IS CARRIED ON IN A BUILDING NOT OWNED BY HIM BUT IN RESPECT OF WHICH THE ASSESSEE HOLDS A LEASE OR OTHER RIGHT OF OCCUPANCY AND ANY CAPITAL EXPENDITURE IS INCURRED BY THE ASSESSEE FOR THE PURPOSES OF THE BUSINESS OR PROFESSION ON THE CONSTRUCTION O F ANY STRUCTURE OR DOING OF ANY WORK IN OR IN RELATION TO, AND BY W AY OF RENOVATION OR EXTENSION OF, OR IMPROVEMENT TO, THE BUILDING, T HEN, THE PROVISIONS OF THIS CLAUSE SHALL APPLY AS IF THE SAI D STRUCTURE OR WORK IS A BUILDING OWNED BY THE ASSESSEE. EXPLANATION 2. FOR THE PURPOSES OF THIS SUB-SECTION WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS SHALL HAVE THE S AME MEANING AS IN CLAUSE * OF SUB-SECTION ( 6 ) OF SECTION 43 . EXPLANATION 3. FOR THE PURPOSES OF THIS SUB-SECTION, THE EXPRESSION ASSETS SHALL MEAN (2) TANGIBLE ASSETS, BEING BUILDINGS, MACHINERY, PLANT OR FURNITURE; ( B ) INTANGIBLE ASSETS, BEING KNOW-HOW, PATENTS, COPY RIGHTS, TRADE MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS O R COMMERCIAL RIGHTS OF SIMILAR NATURE. EXPLANATION 4. FOR THE PURPOSES OF THIS SUB-SECTION, THE EXPRESSION KNOW-HOW MEANS ANY INDUSTRIAL INFORMAT ION OR TECHNIQUE LIKELY TO ASSIST IN THE MANUFACTURE OR PR OCESSING OF GOODS OR IN THE WORKING OF A MINE, OIL-WELL OR OTHE R SOURCES OF MINERAL DEPOSITS (INCLUDING SEARCHING FOR DISCOVERY OR TESTING OF DEPOSITS FOR THE WINNING OF ACCESS THERETO). EXPLANATION 5. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SUB-SECTION SHALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT O F DEPRECIATION IN COMPUTING HIS TOTAL INCOME; ( IIA ) IN THE CASE OF ANY NEW MACHINERY OR PLANT (OTHER THAN SHIPS AND AIRCRAFT), WHICH HAS BEEN ACQUIRED AND INSTALLE D AFTER THE 31 ST DAY OF MARCH, 2005, BY AN ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICL E OR THING OR IN THE BUSINESS OF GENERATION OR GENERATION AND DISTRIBUTION ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 7 OF POWER, A FURTHER SUM EQUAL TO TWENTY PER CENT OF THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALLOWED AS DEDUCTION UNDER CLAUSE ( II ) : FOLLOWING PROVISO SHALL BE INSERTED BEFORE THE EXIS TING PROVISO TO CLAUSE ( IIA ) OF SUB-SECTION (1) OF SECTION 32 BY THE FINANCE ACT, 2015, W.E.F. 1-4-2016 : PROVIDED THAT WHERE AN ASSESSEE, SETS UP AN UNDERTAKING OR ENTERPRISE FOR MANUFACTURE OR PRODUCTION OF ANY ART ICLE OR THING, ON OR AFTER THE 1 ST DAY OF APRIL, 2015 IN ANY BACKWARD AREA NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS BEHALF, IN THE ST ATE OF ANDHRA PRADESH OR IN THE STATE OF BIHAR OR IN THE STATE OF TELANGANA OR IN THE STATE OF WEST BENGAL, AND ACQUIRES AND INSTALLS ANY NEW MACHINERY OR PLANT (OTHER THAN SHIPS AND AIRCRAFT) FOR THE PURPOSES OF THE SAID UNDERTAKING OR ENTERPRISE DURING THE PE RIOD BEGINNING ON THE 1 ST DAY OF APRIL, 2015 AND ENDING BEFORE THE 1 ST DAY OF APRIL, 2020 IN THE SAID BACKWARD AREA, THEN, THE PROVISION S OF CLAUSE ( IIA ) SHALL HAVE EFFECT, AS IF FOR THE WORDS TWENTY PER CENT, THE WORDS THIRTY-FIVE PER CENT HAD BEEN SUBSTITUTED : PROVIDED 13 [ FURTHER ] THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ( A ) ANY MACHINERY OR PLANT WHICH, BEFORE ITS INSTALL ATION BY THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE INDIA B Y ANY OTHER PERSON; OR ( B ) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE P REMISES OR ANY RESIDENTIAL ACCOMMODATION, INCLUDING ACCOMMODATION IN THE NATURE OF A GUEST-HOUSE; OR ANY OFFICE APPLIANCES OR ROAD TRANSPORT VEHICLES ; OR ( D ) ANY MACHINERY OR PLANT, THE WHOLE OF THE ACTUAL COST OF WHICH IS ALLOWED AS A DEDUCTION (WHETHER BY WAY OF DEPREC IATION OR OTHERWISE) IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION OF AN Y ONE PREVIOUS YEAR; ( III ) IN THE CASE OF ANY BUILDING, MACHINERY, PLANT OR FURNITURE IN RESPECT OF WHICH DEPRECIATION IS CLAIMED AND ALLOWE D UNDER CLAUSE ( I ) AND WHICH IS SOLD, DISCARDED, DEMOLISHED OR DESTR OYED IN THE PREVIOUS YEAR (OTHER THAN THE PREVIOUS YEAR IN WHIC H IT IS FIRST BROUGHT INTO USE), THE AMOUNT BY WHICH THE MONEYS P AYABLE IN RESPECT OF SUCH BUILDING, MACHINERY, PLANT OR FURNI TURE, TOGETHER WITH THE AMOUNT OF SCRAP VALUE, IF ANY, FALL SHORT OF THE WRITTEN DOWN VALUE THEREOF : PROVIDED THAT SUCH DEFICIENCY IS ACTUALLY WRITTEN OFF IN THE BOOKS OF THE ASSESSEE. ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 8 EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, ( 1 ) MONEYS PAYABLE IN RESPECT OF ANY BUILDING, MACH INERY, PLANT OR FURNITURE INCLUDES ( A ) ANY INSURANCE, SALVAGE OR COMPENSATION MONEYS PA YABLE IN RESPECT THEREOF; ( B ) WHERE THE BUILDING, MACHINERY, PLANT OR FURNITUR E IS SOLD, THE PRICE FOR WHICH IT IS SOLD, SO, HOWEVER, THAT WHERE THE ACTUAL COST OF A MOTOR CAR IS, IN ACCORDANCE WITH THE PROVISO TO CLAUSE ( 1 ) OF SECTION 43 , TAKEN TO BE TWENTY-FIVE THOUSAND RUPEES, THE MONEYS PAYAB LE IN RESPECT OF SUCH MOTOR CAR SHALL BE TAKEN TO BE A SU M WHICH BEARS TO THE AMOUNT FOR WHICH THE MOTOR CAR IS SOLD OR, AS THE CASE MAY BE, THE AMOUNT OF ANY INSURANCE, SALVAGE O R COMPENSATION MONEYS PAYABLE IN RESPECT THEREOF (INC LUDING THE AMOUNT OF SCRAP VALUE, IF ANY) THE SAME PROPORT ION AS THE AMOUNT OF TWENTY-FIVE THOUSAND RUPEES BEARS TO THE ACTUAL COST OF THE MOTOR CAR TO THE ASSESSEE AS IT WOULD HAVE B EEN COMPUTED BEFORE APPLYING THE SAID PROVISO; ( 2 ) SOLD INCLUDES A TRANSFER BY WAY OF EXCHANGE OR A COMPULSORY ACQUISITION UNDER ANY LAW FOR THE TIME BEING IN FOR CE BUT DOES NOT INCLUDE A TRANSFER, IN A SCHEME OF AMALGAMATION , OF ANY ASSET BY THE AMALGAMATING COMPANY TO THE AMALGAMATE D COMPANY WHERE THE AMALGAMATED COMPANY IS AN INDIAN COMPANY OR IN A SCHEME OF AMALGAMATION OF A BANKING COMPANY, AS REFERRED TO IN CLAUSE OF SECTION 5 OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) WITH A BA NKING INSTITUTION AS REFERRED TO IN SUB-SECTION (15) OF S ECTION 45 OF THE SAID ACT, SANCTIONED AND BROUGHT INTO FORCE BY THE CENTRAL GOVERNMENT UNDER SUB-SECTION (7) OF SECTION 45 OF T HAT ACT, OF ANY ASSET BY THE BANKING COMPANY TO THE BANKING INS TITUTION. XXXXXXXXXXXXXX (2) WHERE, IN THE ASSESSMENT OF THE ASSESSEE, FULL EFFECT CANNOT BE GIVEN TO ANY ALLOWANCE UNDER SUB-SECTION (1) IN ANY PREVIOUS YEAR, OWING TO THERE BEING NO PROFITS OR GAINS CHARGEABLE FOR THAT PREVIOUS YEAR, OR OWING TO THE PROFITS OR GAINS CHARGEABLE B EING LESS THAN THE ALLOWANCE, THEN, SUBJECT TO THE PROVISIONS OF SUB-S ECTION (2) OF SECTION 72 AND SUB-SECTION (3) OF SECTION 73 , THE ALLOWANCE OR THE PART OF THE ALLOWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN, AS THE CASE MAY BE, SHALL BE ADDED TO THE AMOUNT OF THE ALLOWAN CE FOR DEPRECIATION FOR THE FOLLOWING PREVIOUS YEAR AND DE EMED TO BE PART OF THAT ALLOWANCE, OR IF THERE IS NO SUCH ALLOWANCE FO R THAT PREVIOUS YEAR, BE DEEMED TO BE THE ALLOWANCE FOR THAT PREVIO US YEAR, AND SO ON FOR THE SUCCEEDING PREVIOUS YEARS. ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 9 2.4. IF THE AFORESAID PROVISION IS ANYLAYZED, IT C AN BE SAID THAT DEPRECIATION IS A GENERAL PRINCIPLE REPRE SENTS THE DIMINUTION IN THE VALUE OF A CAPITAL ASSET, WHEN AP PLY TO THE PURPOSE. THUS, THE TERM DEPRECIATION IS TO BE UNDERSTOOD IN COMMERCIAL SENSE THEN IT CAN BE SAID THAT IT IS A NORMAL WEAR AND TEAR, WHICH REQUIRED TO BE REP LACED AT A POINT OF TIME IN FUTURE (CIT VS ANAND THEATERS (2 000) 244 ITR 192 (SC), CIT VS DAUDAYAL HOTELS PVT. LTD. (282 ITR 132)(GUJ.)). THE POSITION OF LAW IS WELL SETTLED TH AT THE DEPRECIATION ALLOWANCE IS A NORMAL WEAR AND TEAR, O UT OF USE OF THE ASSET/VEHICLE (CIT VS CROWN PRODUCTS 304 ITR 106 (GUJ.)). THE HONBLE MADRAS HIGH COURT IN VELIM ALAI RUBBER COMPANY LTD. VS ITO (1999) 240 ITR 618, 623 (MAD.) HELD THAT, WHERE IT IS FOUND THAT THE ASSESS EE IS NOT THE OWNER OF THE ASSET IN RESPECT OF WHICH DEPRECIA TION IS CLAIMED, THE ASSESSEE IS NOT ENTITLED TO CLAIM SUCH DEPRECIATION. HOWEVER, THE HONBLE KERALA HIGH COU RT IN CIT VS NIDISH TRANSPORT CORPORATION 185 ITR 669 (KE RALA), WHEREIN ,THE MOTOR VEHICLE WAS PURCHASED BY THE ASS ESSEE, USE FOR BUSINESS PURPOSES, BUT NOT REGISTERED IN TH E NAME OF THE ASSESSEE, THE ASSESSEE WAS HELD TO BE ENTITL ED FOR DEPRECIATION. IDENTICAL RATIO WAS LAID DOWN BY HON BLE JURISDICTIONAL HIGH COURT IN CIT VS DILIP SINGH S. BAGGA (1993) 201 ITR 995 (BOM.), CIT VS MIRZA ATAULLA BAI G 202 ITR 291 (BOM.), CIT VS NABDURGA TRANSPORT COMPANY 2 35 ITR 158, 160 (ALL.), BASTI SUGAR MILLS LTD. (2002) 257 ITR ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 10 88, 89,91 (DEL.), HOTELS SKYLARK & RESTAURANT PVT. LTD. 221 ITR 283 (PUNJAB), CIT VS A.P. PAPER MILLS 225 ITR 2 62 (A.P.), CIT VS ORIENT LONGMAN PVT. LTD. 227 ITR 68 (A.P.), CIT VS HIMACHAL PRADESH MINERAL AND INDUSTRIAL DEVELOPMENT CORPORATION 234 ITR 509 (HP), MYSORE MINERALS LTD. 239 ITR 775 (SC), RELYING ON CIT VS P ODDAR CEMENTS PVT. LTD. 226 ITR 625 (SC) HELD THAT THE AS SESSEE IS ENTITLED TO DEPRECIATION. THE RATIO LAID DOWN IN CIT VS REVATHI 245 ITR 686 (MAD.), CIT VS THANTHAI PT CORPORATION 248 ITR 632 (MAD.), CIT VS WEP PERFERAL S LTD. (2014) 362 ITR 508 (KARN.) AND CIT VS JAWHAR KALA K ENDRA (2014) 362 ITR 515 (RAJ.) SUPPORTS THE CASE OF THE ASSESSEE. 2.5. THE RATIO LAID DOWN IN ICDS LTD. VS CIT (2013 ) 350 ITR 527 (SC), PRKASH LEASING LTD. VS DCIT (2013 ) 356 ITR 179 (KARN.), CIT VS BIAD LEASING AND FINANCE CO MPANY LTD. (2013) 359 ITR 413 (RAJ.), CIT VS H.B. LEASING AND FINANCE LTD. (2014) 360 ITR 362 (DEL.), CIT VS GLEN MARK PHARMACEUTICAL LTD. (2013) 351 ITR 359 (BOM.), CIT VS ANSAL PROPERTIES AND INDUSTRIES LTD. (2013) 352 ITR 637 (DEL.), SUPPORTS THE CASE OF THE ASSESSEE. EVEN OTH ERWISE, IN VIEW OF THE RATIO LAID DOWN BY HONBLE APEX COURT I N VEGETABLE PRODUCTS PVT. LTD. 88 ITR 192 (SC), WHERE IN, IT WAS HELD THAT WHEN TWO VIEWS ARE POSSIBLE, WHICH FA VOUR THE ASSESSEE, HAS TO BE FOLLOWED, FURTHER FAVOURS T HE CASE OF THE ASSESSEE. FURTHER, IT IS NOT THE CASE OF THE DE PARTMENT THAT THE DEPRECIATION WAS CLAIMED BY BOTH I.E. DIRE CTOR AS WELL AS THE ASSESSEE. DEPRECIATION IS A STATUTORY A LLOWANCE ITA NO.6128/MUM/2013 KEDIA SHARES & STOCK BROKERS LTD. 11 AND HAS TO BE ALLOWED, SUBJECT TO FULFILLMENT OF CO NDITIONS. THERE IS NO DISPUTE THAT THE VEHICLE IN QUESTION WA S USE FOR BUSINESS PURPOSES AND MERE REGISTRATION IN THE NAME OF THE DIRECTOR, THEREFORE, WILL NOT DEBAR THE ASSESSEE TO CLAIM THE STATUTORY ALLOWANCE, THUS, THE APPEAL OF THE ASSESS EE IS ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 31/03/2016. SD/- SD/- (RAJENDRA) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ) DATED : 01/04/2016 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. / THE RESPONDENT. 3. # ,! ( ) / THE CIT, MUMBAI. 4. # ,! / CIT(A)- , MUMBAI, 5. /'01 !2 , & 23 , # $ / DR, ITAT, MUMBAI 6. 14 5$ / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI