Law: Income Tax Act, 1961

Section: 32

[Indian Income Tax Act, 1961].....Depreciation---Building---Condition precedent for claiming depreciation Ownership of building---Meaning of owner in S.32---Wide meaning must be given ---Assessee in possession of building on part payment bf price-Building not registered in name of assessee--Assessee was owner of building for purposes of-S.32---Entitled to depreciation on it. (b) Interpretation of Statutes---- ---Interpretation beneficial to assessee. (c) Words and phrases---- ----"'Owner"--Meaning of Section 32 of the Income tax Act, 1961, confers a benefit on the assessee. The provision should be so interpreted and the words used therein should be assigned such meaning as would enable the assessee to secure the benefit intended to be given, by the Legislature to the assessee. It is also well-settled that where there are two possible interpretations of a taxing provision the one which is favourable to the assessee should be preferred. Section 32 of the Act allows certain deductions, one of them being depreciation of buildings, etc., owned by the msessee and used for the purposes of the business or profession. The terms "own", "ownership" and "owned" are generic and relative terms. They have a wide and also a narrow connotation. The meaning would depend on the context in which the terms are used. CIT v. Podar Cement (Pvt.) Ltd. (1997) 226 ITR 625 (SC), is a case under the Income-tax Act and has to be taken as a trendsetter in the concept of ownership. Assistance from the law laid down therein can be taken for finding out the meaning of the term "owned" as occurring in section 32(1) of the Act. The term owned as occurring in section 32(1) of the Income-tax Act must be assigned a wider meaning. Anyone in possession of property in his own title exercising such dominion over the property as would enable others being- excluded there from and having the right to use arid occupy the property and/or to enjoy its usufruct in his own right would be the owner of the building though a formal deed of title may not have been executed and registered as contemplated by the Transfer of Property Act, the Registration Act, etc. "Building owned by the assessee", the expression as…

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