Depreciation on vehicles cannot be disallowed merely because such vehicles have been registered in the name of partner of an assessee-firm:

AO disallowed depreciation on motor vehicles on the count that such vehicles were registered in the name of the partner of the assessee firm. On appeal, CIT(A) observed that the said vehicles were reflected in the assesse-firm’s balance-sheet under the head “Fixed Assets”. Assessee had raised loans for purchasing some of those vehicles. Further, AO had accepted running and maintenance expenses debited by the assessee which makes it abundantly clear that the said vehicles were purchased from the funds of the assessee and were used for assessee’s business purposes. CIT(A), placing reliance in the case of “Mysore Minerals vs. CIT – 239 ITR 775 (SC)”, held that depreciation on such vehicles was allowable and the said order was further confirmed by Hon’ble ITAT.

[ACIT vs. Gopal Fabrics – ITA No.3338/Ahd/2010 and 463/Ahd/2013]