TMI Blog1985 (10) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal depreciation on the said shed for the first time and was permitted to do so. He contended that the M.I.D.C. had sold to him the said shed under the said deed. The Appellate Assistant Commissioner found that the assessee was not the owner of the said shed and disallowed the assessees's claim for depreciation thereon. The assessee preferred an appeal to the Income-tax Appellate Tribunal. It was contended before the Tribunal on behalf of the assessee that the said deed was not a lease but a hire purchase agreement and that the assessee had thereunder become the equitable or beneficial owner of the said shed. The Tribunal referred to the provisions of section 32 of the Income-tax Act, 1961, and noted that the question for consideration was whether the assessee could be said to own the said shed within the meaning of that provision. It considered it proper to examine the question from a businessman's point of view instead of a strictly legal and technical one. Referring to the composition of the premium amount, which had been furnished by the M.I.D.C. to the assessee in a letter dated September 29, 1971, it expressed the opinion that the M.I.D.C. had charged the assessee, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said deed provided for the following: In consideration of the sum of Rs. 15,000 paid by the assessee to the M.I.D.C. and the further sum of Rs. 57,213 agreed to be paid by the assessee to the M.I.D.C. in the manner set out in the schedule to the said deed as and by way of premium and of the rent thereby reserved and the covenants and agreements on the part of the assessee, the assessee was granted the said plot of land together with all rights, easements and appurtenances thereto for the term of ten years, paying therefor the yearly rent of Re. 1. The assessee covenanted, inter alia, that no alterations or additions would, at any time, be made to the facade or elevations of any building erected and standing on the said plot of land without the previous approval of the M.I.D.C.; to keep in good and substantial repair and condition those buildings and premises throughout the term of the lease; to permit the M.I.D.C. to enter into and upon the " demised premises " to inspect the state of repair thereof; to keep the buildings already erected or which might thereafter be erected on the said plot of land insured in the joint names of the M.I.D.C. and the assessee; and, at the expiratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the assumption that the assessee had paid to the M.I.D.C. the price of the said shed. The question, it will be recalled, is whether the assessee was entitled to depreciation in respect of the said shed. The interpretation of documents is a matter of law. The Tribunal held that the assessee had paid to the M.I.D.C. the price of the said shed upon its construction of the said deed and the letters written by the M.I.D.C. to the assessee. The court is entitled to construe the said deed and letters for itself to answer the question posed to it. Mr. Kumeria next relied upon the letters dated January 15, 1968, May 14, 1970, August 11, 1971, and September 28, 1971, written by the M.I.D.C. to the assessee. They form part of a compilation which has been tendered. By the letter dated January 15, 1968, the M.I.D.C. wrote to the assessee that the amount of the premium included " the cost of the land, building and an element of interest ". No break-up of this amount could be had and " the total value of the property was the aggregate sum of the instalments ". By the letter dated May 14, 1970, written to the assessee, the M.I.D.C. recorded that a balance of Rs. 60,840 was still to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1055. The facts of that case are so different from those before us that we do not think it essential to dwell thereon in any detail. In that case, the assessee carried on the business of exhibiting of films leased to him. He was obliged under the lease agreement to surrender the theatre on the expiry of the lease. The assessee demolished the existing theatre and constructed a new one. He claimed depreciation in respect of the new theatre. It was held that in view of the positive stipulation in the lease agreement that the theatre would become the property of the lessor only on the expiry of the lease, it was clear that the ownership of the new theatre was to vest in the assessee. The new theatre constructed by the assessee belonged to him and he was entitled to an allowance for depreciation thereon. The decision of the Calcutta High Court in Sri Ganesh Properties Ltd. v. CIT[1964] 44 ITR 606, also cited by Mr. Kumeria, is again a case where the facts are wholly different. The Calcutta High Court observed that in the case of a building lease, the presumption was that the lessor remained the owner of the subject-matter of the lease, including the building. But, if the terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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