TMI Blog1983 (9) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ) upheld the same. 2. The learned counsel for the assessee submitted that the lorries were delivered to the assessee on 19-10-1975 and they were run by the assessee during this year. The assessee has been the owner of the lorries. Merely because they were not registered under the Motor Vehicles Act in the assessee's name during this year it cannot be held that the assessee is not the owner. Thus, he urged that the claim for depreciation should have been allowed in respect of the two lorries owned by the assessee. The learned departmental representative submitted that under section 32 of the Income-tax Act, 1961 ('the Act'), unless the asset is owned by the assessee and used for the purpose of business depreciation cannot be allowed. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a contract of sale. In CIT v. Bhurangya Coal Co. [1958] 34 ITR 802 the Supreme Court held that the title to movable property passed on the day they were handed over. In K. L. Johar Co. v. Dy. CTO [1965] 16 STC 213, the Supreme Court held that the essence of a sale under the Sale of Goods Act is that the property should pass from the seller to the buyer when a contract of sale is made except in a case of conditional sale. It was further observed as under: "... So far as the dealer is concerned the whole price is paid by the appellant. The agreement also shows that the appellant is the owner of the vehicle and the intending purchaser is merely a hirer thereunder. The vehicle has to be registered in the name of the appellant, though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner." Section 31 of the said Act, deals with transfer of ownership. It is clear from section 22 that the necessity for registration is only for the purpose of driving the vehicle in any public place or any other place for purposes of carrying passengers or goods. Section 22 does not lay down that a person cannot be the owner of a motor vehicle unless it is registered in his name. Registration is not an essential pre-requisite for acquisition of ownership of motor vehicle. Section 31 only deals with the intimation to be gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of its registration under the Motor Vehicles Act. The omission to get it registered does not make the transfer itself illegal. In our view, it is not material whether the lorries are registered in the assessee's name or not under the Motor Vehicles Act for the purpose of claiming depreciation under section 32 once there is evidence to prove that he owned the lorries. We have already held that the assessee owned the lorries having purchased and taken delivery on 19-10-1975. Thus, in our view, the assessee is entitled for depreciation under section 32 on the two lorries. 7. In CIT v. Salkia Transport Associates [1983] 143 ITR 39, the Calcutta High Court held that there is no provision under the Motor Vehicles Act which requires registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who can be said to own the properties is the Agro Corporation which, as a result of agreement to sell, has been put in possession of the properties. Thus, it was held that, the Agro Corporation was entitled for depreciation under section 32. The ratio laid down in the above cases squarely apply. 9. In R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570, the Supreme Court observed as under: "... But the real question is, can that right be considered as ownership within the meaning of section 9 of the Act. As mentioned earlier that section seeks to bring to tax income of the property in the hands of the owner. Hence, the focus of that section is on the receipt of the income. The word 'owner' has different meanings in different context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iala's case was not noticed by the Delhi High Court. 11. It is well settled that when there are two views, the view favourable to the assessee should be accepted. In this connection, we may refer to the decision of the Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. 12. On a consideration of the entire facts, we hold that the assessee having purchased the two lorries and taken delivery of them on 19-10-1975 has become the owner of them. The lorries are owned by the assessee and are used in its business. Thus, it has satisfied the conditions laid down in section 32. Thus, we hold that the assessee is entitled to depreciation on the two lorries. We direct the ITO to allow the depreciation. 13. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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