9911796707
TMI Blog2004 (10) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... be upset without reliable evidence and merely on conjectures and surmises. The assessee is a private limited company. It is engaged in the transport of oil business. The dispute relates to the assessment year 1997-98. It claimed depreciation on two oil tankers bearing registration number UP 78-N/6916 and UP-78-N/6917. These tankers were purchased by sale invoice dated February 17, 1997. The documents produced during the assessment proceeding show that complete tankers along with body were duly delivered to the assessee by Motor and General Sales Limited on and after March 26, 1997. The registration certificates of payment of road tax are dated March 31, 1997. In view of these facts the assessee claimed depreciation on the aforesaid two vehicles also which was denied by the Assessing Officer, namely, the Deputy Commissioner Income-tax, Circle-11(1), Kanpur, on the ground that the vehicles were not actually used for the purposes of business in the relevant previous year. The assessee's claim for depreciation was negatived by the Assessing Officer and the Commissioner of Income-tax, Circle-11(1) on the ground that these tankers could not have run on March 31, 1997, as the relevant pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March 31, 1997, and subsequently penalty of Rs. 500 was also imposed by the C.M.M., Kanpur, clearly shows that the vehicles were actually plied on March 31, 1997. There is a presumption of correctness of official acts under section 114 of the Evidence Act and that presumption was wrongly not drawn by the authorities below. In contra, learned standing counsel submitted that to claim depreciation under section 32 of the Act it is essential to establish that the asset was actually used during the relevant previous year by the assessee. He submitted that the restricted meaning to the word "used" should be given while interpreting section 32 of the Act. The findings recorded by the Tribunal are findings of fact and no substantial question of law is involved in the appeal. The appellant-assessee took delivery of complete tanker along with body mounted on the chasis on March 26, 1997 from Motor and General Sales, Allahabad. The sale certificates issued by the selling dealer are on record. The authorities below have not accepted the case of the assessee-appellant about the use of truck in question on the ground that the asses-see could not produce the documents to show that these tankers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty were collusive in nature and were only "stage show". The Tribunal was obsessed with a view that since the registration of the vehicle by the registering officer under the Motor Vehicles Act, 1988 was granted on April 1, 1997, the vehicle could not be plied on March 31, 1997. The Tribunal approached the said problem with wrong angle. For the income-tax purposes the Tribunal was required to examine as to whether the assets (oil tankers) were used during the previous assessment year or not. The user of oil tankers even prior to obtaining registration from the registering authority or without payment of road tax, etc., may be violative of the provisions of the Motor Vehicles Act, 1988. But none the less if the vehicle was plied even without obtaining registration or payment of road tax, etc., it cannot be said, as a matter of fact, that the vehicle has not been used. The attention of the Tribunal was not drawn towards rule 47 of the Motor Vehicles Rules which gives seven days time td apply for registration of the vehicle with the registering authority under the Motor Vehicles Act. The finding recorded by the Tribunal that the oil tankers were not used on the last date of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered in his name. Reliance was placed upon a judgment of the Supreme Court in the case of K.L. Johar and Co. v. Deputy CTO [1965] 16 STC 213 (SC). CIT v. Nidish Transport Corporation [1990] 185 ITR 669 (Ker) is an authority for the proposition that the motor vehicle is a movable property and transfer of ownership is governed by the Sale of Goods Act. Transfer takes effect from the date of sale. Registration is not necessary to pass title in the motor vehicle, to claim depreciation under the Income-tax Act. The same view has been taken by the Division Bench of the Bombay High Court in the case of CIT v. Dilip Singh Sardarsingh Bagga [1993] 201 ITR 995. Registration under the Motor Vehicles Act, to claim depreciation under the Income-tax Act, is not an essential prerequisite. The assessee purchasing a motor vehicle for valuable consideration and using the same for his business cannot be denied the benefit of depreciation on the ground that the transfer was not recorded under the Motor Vehicles Act or the vehicle stood in the name of the vendor in the records of the authorities under the Motor Vehicles Act. This judgment has been followed by the Delhi High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re challaned and also fined by the C. M. M., Kanpur. Therefore the oil tankers were actually put to use in the relevant accounting year by the assessee for its business purposes. Alternatively the assessee was entitled for depreciation on these two oil tankers as they were purchased during the relevant accounting year for business purposes and were ready to use, road tax was deposited and the oil tankers were got registered with the registering authority on the last date of the accounting year. Failure of the assessee to produce the hire contract with the parties is in respect of the two oil tankers is of little significance in view of exposition of law that the word "used" under section 32 of the Act has to be given wider meaning and it will include assets ready for use. In the result, we are of the opinion that substantial questions of law are involved in the appeal and the order of the Tribunal refusing to grant depreciation on the two oil tankers is not legally Justified. The appeal is allowed. The order of the Tribunal is set aside and it is held that the assessee-appellant is entitled to depreciation on the two oil tankers bearing registration Nos. UP 78-N/6916 and UP-78-N/6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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