1992 (7) TMI 101 - AT - Income Tax

Summary

Issues:
1. Annual letting value estimation for the assessment year 1983-84.
2. Disallowance of depreciation on a matador vehicle.

Analysis:

Issue 1:
The appeal pertains to the assessment year 1983-84, where the Assessing Officer estimated the annual letting value (ALV) of two properties at Rs. 45,000 each due to the increasing trend in property values. The assessee contested this valuation, arguing that the ALV should not be increased from the previous year's assessment. The CIT(A) reduced the ALV to Rs. 30,000 for each property, considering past assessments and the dissolution of the firm. However, the Tribunal upheld the CIT(A)'s decision, stating that the increasing property value should be acknowledged. The CIT(A) allowed a reduction of Rs. 10,000, resulting in a final ALV of Rs. 45,000 for each property after considering the firm's dissolution.

Issue 2:
The second ground of appeal concerns the disallowance of depreciation amounting to Rs. 26,697 on a matador vehicle purchased just before the firm's dissolution. The Assessing Officer disallowed the depreciation, citing that the vehicle was not legally registered before use. The assessee appealed to the CIT(A), relying on precedents where registration was not a prerequisite for claiming depreciation. Despite the assessee's arguments, the CIT(A) upheld the disallowance. However, the Tribunal referenced previous judgments emphasizing that ownership, not registration, is crucial for claiming depreciation. The Tribunal concluded that the assessee was entitled to depreciation, regardless of registration status, and allowed the appeal on this ground, partially in favor of the assessee.

In conclusion, the Tribunal confirmed the assessment of the annual letting value for the properties at Rs. 45,000 each and allowed the depreciation claim on the matador vehicle, emphasizing ownership over registration. The appeal was partially allowed in favor of the assessee.