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Issues:
1. Claim of depreciation on the building acquired by a company from a dissolved partnership without a registered sale deed. 2. Interpretation of ownership for the purpose of allowing depreciation on immovable property. Analysis: 1. The appeal involved a dispute regarding the claim of depreciation on a building acquired by a company from a dissolved partnership without a registered sale deed. The Income Tax Officer (ITO) disallowed depreciation as the building was not registered in the company's name during the relevant accounting year. The Appellate Assistant Commissioner (AAC) directed the ITO to verify if the building was taken over by the company and used for business purposes, stating that depreciation should be allowed if these conditions were met. 2. The department appealed this decision, citing a Delhi High Court case where it was held that depreciation cannot be allowed without a registered sale deed. The court in that case emphasized that ownership is crucial for claiming depreciation. However, the assessee argued that the ruling was not applicable in their case as the property was acquired through the dissolution of a partnership, not by purchase. They relied on a Supreme Court decision stating that on dissolution of a partnership, there is no transfer of assets requiring registration. 3. The tribunal agreed with the assessee, noting that registration of a deed is necessary only for purchased properties, not those acquired through partnership dissolution. Since the property automatically fell to the assessee's share upon dissolution, no transfer was involved, and registration was not required. Therefore, the tribunal upheld the AAC's decision to allow depreciation on the building. The appeal was dismissed on this issue, with the tribunal partially allowing the appeal on other grounds.
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