9911796707
TMI Blog2001 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Assessing Officer, the buildings had not been registered in the name of the assessee-trust. On appeal, the first appellate authority held that the assessee was entitled to depreciation on the buildings as they were constructed by the trust (though the land in which they stood were not registered in their name). The Tribunal held that even if the land does not belong to him, the assessee would: be entitled to depreciation. The Tribunal also held that there is nothing in section 32 which bars such a claim being made. Learned counsel for the Department, Sri P. K. Ravindranatha Menon, brought to our notice the following decision in Kalpaka Tourist Home (P.) Ltd. v. CIT [1988] 172 ITR 364 (Ker), wherein it was held that the depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was considering the depreciation under section 32 of the Income-tax Act. The Supreme Court held as follows : "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 assessee and used for the purposes of the business or profession. The terms 'own' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd tear of a capital asset employed by an assessee in his business. The very concept of depreciation suggests that the tax benefit on account of depreciation legitimately belongs to one who has invested in the capital asset and is utilising the capital asset and thereby losing gradually the investment caused by wear and tear, and would need to replace the same by having lost its value fully over a period of time. It is well-settled that there cannot be two owners of the property simultaneously and in the same sense of the term. The intention of the Legislature in enacting section 32 of the Act would be best fulfilled by allowing deduction in respect of depreciation to the person in whom for the time-being vests the dominion over the buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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