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Issues Involved:
1. Entitlement to depreciation on factory building not registered in the name of the assessee. Issue-wise Detailed Analysis: 1. Entitlement to Depreciation on Factory Building Not Registered in the Name of the Assessee: The primary issue in these appeals is whether the assessee is entitled to claim depreciation on a factory building that was not registered in its name. The relevant facts are that the assessee-company, engaged in manufacturing textile machinery parts, claimed depreciation on a factory building it agreed to purchase for Rs. 5,50,000. The possession of the building was taken on 21st June 1985, and the property was included in the gross block of the assessee's accounts. However, the Assessing Officer (AO) denied the depreciation claim, arguing that the factory building, being immovable property, was not registered in the name of the assessee, and thus, the assessee was not the legal owner. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], citing several judicial decisions in support of its claim. The CIT(A) allowed the appeal, referencing the Tribunal's decision in Narendra Ceramics (P) Ltd. vs. ITO, which held that depreciation could be claimed on properties acquired but not registered in the name of the assessee, based on the principle that ownership for depreciation purposes does not require registration. The Revenue, represented by the learned Departmental Representative, contended that without a registered deed, the right, title, and interest in the property do not pass to the transferee, relying on the Gauhati High Court's decision in CIT vs. A.B.C. India Ltd. Conversely, the assessee's counsel argued that the issue was already settled in favor of the assessee by the Tribunal in Narendra Ceramics (P) Ltd., and further supported by the rejection of the Revenue's reference petition by the Gujarat High Court and the dismissal of the SLP by the Supreme Court. The Tribunal considered the rival submissions and reviewed the relevant judicial precedents. It noted that decisions from various High Courts, including the Andhra Pradesh High Court in CIT vs. Orient Longman (P) Ltd. and the Calcutta High Court in CIT vs. General Marketing & Mfg. Co. Ltd., supported the view that for claiming depreciation under Section 32 of the Income Tax Act, 1961, it is sufficient if the assessee has dominion and control over the property, even if the title deed is not registered in its name. The Tribunal also acknowledged that the Department had allowed depreciation on the same property for the assessment year 1987-88, reinforcing the assessee's position. The Tribunal emphasized that when two views are possible, the one in favor of the assessee should prevail, citing the principle established in various judicial precedents. In conclusion, the Tribunal upheld the CIT(A)'s order, confirming that the assessee is entitled to claim depreciation on the factory building despite the lack of a registered deed, as the assessee had possession and control over the property. The appeals by the Revenue were dismissed. Judgment: The Tribunal confirmed the CIT(A)'s order, allowing the assessee's claim for depreciation on the factory building and dismissed the Revenue's appeals.
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