Law: Income Tax Act, 1922

Section: 10(2)(vi)

Income-tax----Depreciation---Condition precedent ---Assessee must be the owner of the assets in question---Income-tax Act, 1922, S.10(2)(vi). Depreciation under the provisions of section 10(2)(vi) of the Income¬-tax Act of 1922 is admissible only where the assessee is the owner of the assets in question. JUDGMENT B.P. JEEVAN REDDY, CJ.---The Income-tax Appellate Tribunal, Allahabad, has referred the following question under section ?.56(2) of the Income Tax Act, 1961, at the instance of the Revenue. "Whether, on the facts and in the circumstances of the case, was the Tribunal in law, justified in taking into consideration the depreciation suffered by the buses in question in estimating the net taxable income?" The respondent assessee did not file any returns for the assessment years 1951-52 to 1956-57. However, on the basis of certain material, the Income-tax Officer initiated proceedings under section 34 of the Indian Income Tax Act, 1922. Wherein it was claimed that the buses belonged to the members individually, and that no income arising from the plying of those buses was assessable in the hands of the assessee. Its case was that the income of each bus should be assessed separately in the hands of its respective owner. This case was, however, rejected and assessment was made treating the respondent as an unregistered firm. On appeal, the Appellate Assistant Commissioner reduced the quantum but rejected the claim for depreciation to be forwarded by the assessee. On further appeal, the Tribunal adopted a different course. But, before we notice the course adopted by the Tribunal, it would be appropriate to notice its findings. These are: (1) The respondent-assessee was not the owner of the buses and the buses were owned by individual member's. (2) In this sense, depreciation cannot be allowed in the hands of the assessee. Since the assessee is not the owner of the buses but at the same time the buses must have depreciated on account of constant plying and, therefore,…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492