Depreciation Claim on JCB can’t be disallowed merely on Ground of Delay in Registration: ITAT [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has held that the depreciation claim in respect of JCB cannot be disallowed merely on the ground that there was a delay in registration of the same.

In the instant case, the assessee purchased a JCB machine on 3rd June 2011 and delivery was taken on 6th June 2011. However, the registration of JCB with the RTO was done on 29.08.2011. In the registration charges, the RTO has recovered a penalty of Rs. 5708/- on account of delay in registration. The Assessing Officer disallowed the assessees’ claim for depreciation on the ground of the said delay in registration.

The Tribunal, on the second appeal, noted that the delay in registration was regularized by the Office of the RTO by levying the penalty.

“It is not the case of the A.O. that the assessee has not used the JCB for the business purposes and further when the assessee has received the hire charges from the use of JCB during the year under consideration, then the mere delay in registration would not negate the fact of use of JCB by the assessee. It is pertinent to note that the JCB is not a transportation vehicle but a machine used in digging and other excavation of work and, therefore, practically it is possible to use the JCB without getting the registration. Further, when the registration was granted with a penalty on account of delay in registration, the said defect was removed by paying the penalty and accordingly the claim of depreciation on the JCB cannot be disallowed. In view of the above facts and circumstances of the case, we allow the claim of depreciation on JCB,” the Tribunal said.