ENTITLEMENT OF DEPRECIATION ON VEHICLE REGISTERED IN THE DIRECTOR'S OR OTHER OFFICER

It is observed that in many instances Vehicles purchased by Companies were registered in the name of Director's or other officer's of company under the Motor Vehicles Act, 1988 (generally for ease of insurance claim settlement)

So question arise whether Companies were entitled to claim depreciation on vehicles registered in the name of its directors's or other officer of company.

In the case of SWAGAT INFRASTRUCTURES v. JCIT-2013 (Ahd.) tribunal held that claim of depreciation cannot be denied to the taxpayer as long as it is proved that the asset is under its dominion control and is being utilised for the business purpose of assesse, even though the tax payer is not registered owner of the asset.

Companies should ensure the following to use the above mentioned judgement.

1. A resolution should be passed by the Company to purchase and register these vehicle in the name of the Director or other officer of the company.

1. Proper documentation should be prepared to substantiate that the vehicles were utilized for business purposes. 

Disclaimer: The above post is only for sharing information between friends & professional colleagues. Professional consultancy must be sought before entering into any transaction related with above post.