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Issues:
1. Determination of annual letting value for the assessment year 1983-84. 2. Disallowance of depreciation on a vehicle due to registration issues. Issue 1: Determination of annual letting value: The assessee, a dealer in various goods, declared rent income from two bungalows at Rs. 38,400, which was adopted as the Annual Letting Value (ALV). The Income Tax Officer (ITO) increased the ALV to Rs. 45,000 each, citing the trend of increasing property values. The assessee appealed, arguing that the ALV should remain at Rs. 30,000 based on previous assessments. The CIT(A) reduced the ALV for the previous year to Rs. 30,000 but increased it to Rs. 45,000 for the current year, considering property value trends. The Tribunal upheld the CIT(A)'s decision, noting a reduction of Rs. 10,000 due to the firm's dissolution. The Tribunal confirmed the ALV of Rs. 45,000 for each bungalow, after the deduction of Rs. 5,000 due to the firm's dissolution. Issue 2: Disallowance of depreciation on a vehicle: The assessee firm purchased a matador shortly before the firm's dissolution, and the vehicle was registered two days before the dissolution. The ITO disallowed depreciation, stating that the vehicle could not be used before registration. The assessee appealed, citing precedents where registration was not a prerequisite for claiming depreciation. The CIT(A) upheld the ITO's decision, distinguishing the case from the cited precedents. The Tribunal referenced a case where registration was not essential for claiming depreciation and ruled in favor of the assessee, stating that the Revenue authorities cannot deny deductions based on legality issues. The Tribunal allowed the appeal partially, concluding that the assessee was entitled to depreciation regardless of registration status. In conclusion, the Tribunal confirmed the ALV of Rs. 45,000 for each bungalow after deductions and allowed the depreciation claim on the vehicle, emphasizing that registration was not a determining factor for depreciation eligibility.
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