TMI Blog1992 (9) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... wal. The truck was originally allotted as a brand new truck to the said Shri Agrawal (hereinafter referred to as " the vendor " ). Since the vendor did not have sufficient funds to purchase the truck, he made an offer to the assessee to finance the purchase of the said truck and to operate the said truck on licence as owing to the restrictions under the Motor Vehicles Act the truck in question could not be registered immediately in the name of the assessee. From the various documents filed before the Income-tax Officer, it was amply clear that although the vendor lent his name for the purchase of the truck, for obtaining loans for the said purpose from the banks, for obtaining the licence for plying it as a public vehicle for hire, etc., the truck was all along being used beneficially by the assessee. The taxes, etc., were also paid by the assessee. The assessee was fully responsible for operation of the truck. The assessee claimed that the truck was beneficially owned by him for his business of transportation for hire. The income from the running of the truck was shown by the assessee as his income in his return of income. The assessee also claimed depreciation on the truck as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee under the Motor Vehicles Act, the assessee cannot be said to be its owner and, as such, he would not be entitled to depreciation allowance in respect thereof. The word " owner ", as observed by the Supreme Court in R. B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC) (at page 578) has different meanings in different contexts and in certain circumstances even a lessee may be considered as the owner of the property leased to him. It was also held to be so by the Bombay High Court in CIT v. Alpana Talkies [1983] 139 ITR 1055, It was a case of a lease of a theatre for exhibiting films. Under the lease agreement, the lessee was to keep the theatre in good condition and make all repairs and the premises were to be surrendered with the fittings and fixtures and additions and alterations on the expiry of the lease period. The assessee demolished the theatre and constructed a new one during the period January-July, 1962. In respect of the assessment years 1964-65 to 1969-70, the assessee claimed depreciation in respect of the theatre building, furniture and fixtures, plant, etc. The claim was rejected by the Income-tax Officer on the ground that the lessor had not divested himse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e owner thereof in the sense in which the expression has been used in section 32 of the Income-tax Act". In this connection, reference may be made to the decision of the Calcutta High Court in CIT v. Steelcrete (P.) Ltd. [1983] 142 ITR 45. This too was a case of rejection of a claim to depreciation and development rebate under sections 32 and 33 of the Income-tax Act. The controversy was whether the assets in question were "owned by the assessee and used for the purpose of business". There was no real dispute in regard to the user of the assets for the purpose of the business. The sole question for determination was whether the machinery in question could be considered to be owned by the assessee for the purpose of section 32 of the Act. Relying upon the observations of the Supreme Court in R. B. Jodha Mal Kuthiala [1971] 82 ITR 570, the High Court observed that though the machinery in respect of which the depreciation was claimed stood in the name of the Government of India, for all real intents and purposes and also for purposes of section 32 of the Income-tax Act, 1961, it was intended that the property and the goods should pass to the assessee at the relevant time. Read in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the vehicles and were entitled to depreciation under section 32 of the Act if the same has been used for the purpose of the business. The various decisions including the decisions of the Calcutta High Court and the Kerala High Court which relate to the transfer of motor vehicles referred to above leave no scope for doubt that the transfer of ownership of a vehicle is not dependent upon the transfer of ownership being recorded under the Motor Vehicles Act. Section 31 of the Motor Vehicles Act, 1939 (corresponding to section 50 of the Motor Vehicles Act, 1988), so far as relevant, reads : " 31. (1) Where the ownership of any motor vehicle registered under this Chapter is transferred, (a) the transferor shall (i) within fourteen days of the transfer, report the fact of transfer to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee (ii) within forty-five days of the transfer forward to the registering authority referred to in sub-clause (i) (A) a no objection certificate obtained under section 29A ; or (B) in a case where no such certificate has been obtained, (1) a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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