TMI Blog1995 (3) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, X-ray equipment, air-conditioners, furniture and fixtures, etc. During the course of regular assessment proceedings, the Assessing Officer had allowed depreciation, as claimed by the assessee. 3. The Assessing Officer, however, issued the notice of rectification on the ground that the assessee was not the full owner of the assets on which depreciation was claimed and allowed. After hearing the assessee, the Assessing Officer held that the depreciation was not admissible in the case of a fractional owner, in view of the Supreme Court decision in the case of Seth Banarsi Das Gupta v. CIT [1987] 166 ITR 783. He accordingly rectified the assessment and withdrew the depreciation of Rs. 55,140. The assessee also did not succeed before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al owner of the assets on which the depreciation has been claimed. To buttress his arguments, the learned counsel has taken us through the decisions of the Bombay High Court in the cases of CIT v. Purushotam Gangadhar Bhende [1977] 106 ITR 932 and CIT v. Modu Timblo (Individual) [1994] 206 ITR 647. The learned counsel reiterated that the assessee is the full owner of the assets and hence, he is entitled to the depreciation. He also argued that the case of the assessee should be understood with reference to the Portuguese Civil Code and the relevant provisions of the Income-tax Act. The rectification, therefore, was not justified and the order of the CIT(A), therefore, should be vacated and the revenue should be directed to allow the depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banarsi Dass Gupta is fully applicable to the facts of the case. 8. In reply, the learned counsel for the assessee reiterated that the assessment is to be made on the communion of wife and husband and not on the individual. Since the assessment is to be made on the communion of wife and husband and as the property is owned by the communion of the said wife and husband, the claim of depreciation is an admissible deduction and, therefore, there was no warrant for the Assessing Officer to withdraw the same u/s 154 of the Income-tax Act. 9. We have heard the rival submissions. For the sake of convenience, we extract the provisions of sec. 5A of the Income-tax Act : " 5A. Apportionment of Income between spouses governed by Portuguese Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried, the property of the spouses gets blended and each spouse becomes a 50 per cent shareholder in the combined property. Similarly, each spouse is legally entitled to 50 per cent of the income of the other spouse. Such a system referred to as community of property has been dealt with by the provisions of sec. 5A extracted above. The said section provides that income from all sources, except from salary, should be apportioned equally between the husband and wife and such income shall not be assessed as income of the communion of property. Even the income from profession will be apportioned equally between the husband and wife. The income so apportioned will be included separately in the total income of the husband and of the wife. 11. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1193 ; (iv) In the corpus as well as the income of communion property, immovable as well as movable, the husband and the wife each have, during the subsistence of a marriage celebrated as per the custom of Goa, a fixed and certain half-share which can be ascertained on the termination of the communion by divorce, separation or death (articles 1121 to 1124, 1203, 1204, 1210, 1216, 1220 and 1226). What is most important in this connection is that it is an admitted position that on the death of one of the spouses, communion property does not devolve by survivorship, but the half-share of the deceased spouse goes by succession to his or her own heirs or legatees by virtue of articles 1122 and 1123. There is a consistent reference to the half ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h income of the husband and of the wife under each head of income, other than under the head " Salaries ", shall be apportioned equally between the husband and the wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively. This, therefore, emerges that the assessment is not to be made on the communion, but the assessment has to be made on the husband or the wife separately. Since the assessment is not made on communion, the husband or the wife cannot claim the full ownership of the communion property. 14. Section 32 of the Income-tax Act grants depreciation to an assessee, provided, (i) the depreciable asset is owned by the assessee, and (ii) it is used for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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