TMI Blog2000 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in holding that the assessee is entitled to depreciation under section 32 in respect of the immovable properties, even though their ownership has not been transferred to the assessee under any registered written instrument ?" The material facts giving rise to this reference are as follows : In the year 1967, the Government of Jammu and Kashmir found that it was not possible on their part to look after the management of the tourist homes, etc. With a view to encouraging tourism in the State, the State Government decided that a corporation be put in charge and made responsible for the management of the tourist homes, Accordingly, a corporation was floated under the name and style of "Jammu and Kashmir Tourism Development Corporation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been affected by a duly registered instrument of conveyance, the legal ownership continued to vest in the Tourism Department of the State Government and the corporation could not claim that the legal ownership vested in it, The Income-tax Officer, therefore, rejected the claim of the assessee-corporation for depreciation in respect of the assets taken over by it from the State Government on the ground that it was not the "owner" of the same. The assessee appealed to the Commissioner of Income-tax (Appeals). The Commissioner (Appeals) upheld the order of the Income-tax Officer and dismissed the appeal. The assessee went in further appeal to the Income-tax Appellate Tribunal (the "Tribunal"). The Tribunal accepted the contention of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd profession. Section 32 of the Act, so far as it is relevant, reads as under : "32. Depreciation.---(1) In respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed--. . ." The case of the Revenue is that the expression "owned by the assessee" should be assigned its legal meaning and so long as the assessee does not become an "owner" of the property in the manner contemplated by law, it cannot claim the benefit of deduction under section 32 of the Act. In the present case, the properties in question being immovable properties, the case of the Revenue is that in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. After a detailed and illuminating discussion on the various shades of meanings of the terms "own", "ownership" and "owned", both wide and narrow, the Supreme Court felt that in the context of section 32 of the Act, the term "owned" must be assigned a wider meaning. The Supreme Court held : "In our opinion, the term 'owned' as occurring in section 32(1) of the Income-tax Act, 1961, 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 therefrom and having the right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner of the buildings though a formal deed of title may not have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the owner of the property. The Supreme Court held that, in the context of section 22 of the Income-tax Act, having regard to the ground realities and further having regard to the object of the Income-tax Act, namely, "to tax the income", "owner" is a person "who is entitled to receive income from the property in his own right". While coming to this conclusion, the Supreme Court observed (page 653) : "We are conscious of the settled position that under the common law, 'owner' means a person who has got valid title legally conveyed to him after complying with the requirements of law such as the Transfer of Property Act, Registration Act, etc. But, in the context of section 22 of the Income-tax Act, having regard to the ground realities and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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