1989 (1) TMI 176 - AT - Income Tax

Summary

Issues involved:
1. Entitlement to depreciation on a shop without a registered conveyance deed.
2. Entitlement to investment allowance on equipment used in a diagnostic center.

Issue 1: Depreciation on shop without conveyance deed:
The dispute revolved around whether the assessee could claim depreciation on a shop in a complex without a registered conveyance deed. The Income-tax Officer disallowed depreciation due to lack of registration, but the first appellate authority allowed it citing relevant court decisions. The Tribunal upheld the appellate authority's decision, emphasizing the interpretation of the term "owner" as per relevant legal precedents, allowing depreciation even without a registered conveyance deed.

Issue 2: Investment allowance on diagnostic equipment:
The question was whether the assessee, operating a diagnostic center, was eligible for investment allowance on the equipment used. The revenue argued that the assessee was engaged in a profession, not business, thus ineligible for the allowance. However, the assessee contended that the diagnostic activities constituted business, not just a profession, citing definitions of "thing" and legal precedents. The Tribunal agreed with the assessee, holding that the diagnostic activities amounted to the production of tangible items, qualifying for investment allowance based on the nature of services provided and the tangible results produced.

Separate Judgement:
In a separate judgment, the Tribunal referenced a previous case concerning the production of X-ray photographs as new articles or things, supporting the assessee's claim for investment allowance on specific diagnostic equipment used in the center. The Tribunal listed and approved the claim for investment allowance on various machinery and equipment utilized in the diagnostic center, emphasizing the tangible nature of the results produced through diagnostic examinations.

Conclusion:
The Tribunal dismissed the departmental appeals, affirming the entitlement of the assessee to claim depreciation on the shop without a conveyance deed and allowing the investment allowance on the diagnostic equipment used in the center. The decisions were based on legal interpretations of ownership for depreciation claims and the nature of activities constituting business for investment allowance eligibility.