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Issues Involved:
1. Entitlement to claim depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922. 2. Determination of ownership of Crown Flour Mills for depreciation purposes. 3. Interpretation of "being the property of the assessee" under section 10(2)(vi) of the Indian Income-tax Act, 1922. 4. Applicability of section 53A of the Transfer of Property Act, 1882, in determining ownership for depreciation claims. Issue-wise Detailed Analysis: 1. Entitlement to claim depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922: The assessee-company claimed depreciation amounting to Rs. 56,265 on the building, plant, and machinery of Crown Flour Mills. The Income-tax Officer disallowed this claim on the grounds that the assessee-company was not the owner of the Crown Flour Mills, as no sale deed had been executed by M/s. Meatles Ltd. in favor of the assessee-company. The Tribunal, however, held that the building, plant, and machinery of the Crown Flour Mills were the property of the assessee-company within the meaning of section 10(2)(vi) of the Act and allowed the claim for depreciation. 2. Determination of ownership of Crown Flour Mills for depreciation purposes: The controversy centered on whether the Crown Flour Mills was the property of the assessee-company during the assessment year. The Tribunal had previously held in the wealth-tax and income-tax assessments of M/s. Meatles Ltd. that there was a sale of the Crown Flour Mills to the assessee-company, although no sale deed had been executed. The High Court examined whether the assessee-company satisfied the ownership condition required under section 10(2)(vi) of the Act. 3. Interpretation of "being the property of the assessee" under section 10(2)(vi) of the Indian Income-tax Act, 1922: The court analyzed whether the phrase "being the property of the assessee" in section 10(2)(vi) of the Act had the same meaning as "owned by the assessee" in section 32(1) of the new Income-tax Act, 1961. The court referred to several judgments, including those of the Madras High Court, Privy Council, and Bombay High Court, which equated "being the property of the assessee" with ownership of the property. The court concluded that the words "being the property of the assessee" meant ownership of the property. 4. Applicability of section 53A of the Transfer of Property Act, 1882, in determining ownership for depreciation claims: The assessee argued that it need not be the full owner of the property and that an interest in the property under section 53A of the Transfer of Property Act was sufficient to claim depreciation. The court, however, held that the interest under section 53A did not amount to ownership of the property. The court cited the Privy Council and Supreme Court judgments which clarified that section 53A creates a right of estoppel between the proposed transferee and transferor but does not create ownership. Conclusion: The court concluded that the words "being the property of the assessee" in section 10(2)(vi) of the Act had the same meaning as "owned by the assessee" in section 32(1) of the new Act. Since no registered sale deed was executed, the title in the Crown Flour Mills did not pass to the assessee-company. Therefore, the Crown Flour Mills was not the property of the assessee-company during the assessment year, and the claim for depreciation was disallowed. The question referred to the court was answered in favor of the revenue and against the assessee-company.
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