Law: Income Tax Act, 1961

Section: 22,32

Income-tax---Depreciation---Condition precedent--Ownership of asset-=-Meaning of "owner"---Building purchased by assessee---Full consideration paid and building occupied but document of sale not registered ---Assessee was owner for purposes of Income Tax Act---Entitled to depreciation---Indian Income Tax Act, 1961, S.32. The liability to pay income-tax as owner is on the person who received or is entitled to receive the income from the property in his own right. The requirement of registration of the sale-deed in the context of section 22 of the Income Tax Act. 1961, is not warranted. Although under the common law "owner" means a person who has got a valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act. the Registration Act, etc., in the context of section 22 of the Income-tax Act having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, "to tax the income", owner is a person who is entitled to receive income from the property in his own right. The Andhra Pradesh Industrial Development Corporation constructed a building known as "Parisrama Bhavan". The assessee purchased two floors in the said building. Full consideration was paid to the Government. However, the conveyance deed transferring title to the property was not registered Though the premises were taken possession of in the month of July, 1978, by the assessee, the document was registered on March 31, 1984. The Income-tax Officer held that the assessee was not the owner of the property and, therefore, not entitled for depreciation. This view was upheld by the-Tribunal. On a reference: Held, that the assessee was entitled to depreciation notwithstanding that the property was subsequently registered. CIT v. Podar Cement (Pvt.) Ltd. (1997) 226 ITR 625 (SC) applied. Nawab Mir Barkath Ali Khan v. CIT (1988) 171 ITR 541 (AP) ref. JUDGMENT MS. S. V. MARUTHI, J.---This is a reference at the instance of the assessee. The assessee is a public sector undertaking wholly owned by the Government of Andhra Pradesh. The Andhra Pradesh Industrial Development Corporation constructed a building known as…

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