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Whether the assessee-corporation is entitled to depreciation for assets taken over without a registered deed of conveyance. Analysis: The case involves a dispute over the entitlement of an assessee-corporation to claim depreciation under section 32 of the Income-tax Act, 1961 for assets taken over from the State Government without a registered deed of conveyance. The Tribunal allowed the depreciation claim, but the Revenue challenged this decision, arguing that legal ownership had not been transferred to the assessee-corporation, thus disqualifying them from claiming depreciation. The key contention of the Revenue was that without a registered deed of conveyance, the assessee-corporation could not be considered the legal owner of the properties, as per the mandatory requirements of the Transfer of Property Act and the Registration Act. The Revenue's position was that without meeting these legal formalities, the assessee-corporation could not claim ownership and, consequently, depreciation benefits under section 32 of the Act. The High Court referred to a recent Supreme Court decision in Mysore Minerals Ltd. v. CIT [1999] 239 ITR 775, which addressed the interpretation of the term "owned" in section 32(1) of the Act. The Supreme Court held that ownership for the purpose of claiming depreciation should be interpreted broadly to include anyone in possession of property, exercising dominion over it, and using it for business purposes, even without a formal deed of title. The Supreme Court emphasized that the tax benefit of depreciation should rightfully belong to the one investing in and utilizing the asset. Drawing from the Supreme Court's decision, the High Court concluded that the assessee-corporation, despite not having obtained a registered deed of conveyance, could be deemed the owner of the assets for depreciation purposes. The High Court aligned with the broader interpretation of ownership in the context of section 32 of the Act, allowing the assessee's claim for depreciation on the assets taken over from the State Government. Consequently, the High Court ruled in favor of the assessee-corporation, affirming their entitlement to claim depreciation under section 32. In light of the Supreme Court's precedent and the broader understanding of ownership for depreciation benefits, the High Court upheld the Tribunal's decision and answered the referred question in favor of the assessee-corporation. The judgment resolved the dispute by affirming the assessee's right to claim depreciation on the assets, even in the absence of a registered deed of conveyance.
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