1994 (5) TMI 63 - AT - Income Tax

Summary

Issues:
- Disallowance of depreciation on buildings claimed by the assessee
- Interpretation of ownership of lands and buildings in question
- Applicability of the Transfer of Property Act in government transfers

Analysis:

The appeal involved the disallowance of depreciation on buildings claimed by the assessee, a State Government undertaking operating road transport services. The Assessing Officer disallowed depreciation, believing that the lands and buildings in question were not registered in the name of the assessee, despite the title deeds being passed to the corporation as per Government's order. The CIT (Appeals) directed the Assessing Officer to allow depreciation based on previous Tribunal decisions and changes in revenue records confirming ownership.

The revenue contended that the decision of the CIT (Appeals) was contrary to law and relied on a Madras High Court judgment regarding ownership transfer. The assessee, however, cited a later Madras High Court judgment and Tribunal decisions to support their claim of ownership and entitlement to depreciation. The assessee distinguished their case from a previous case involving transfer between corporations, emphasizing the applicability of the Government Grants Act in their situation.

The Tribunal examined the transfer of properties to the assessee under Government orders and the interpretation of the Transfer of Property Act. Citing relevant case laws, including decisions by the Madras and Rajasthan High Courts, and a Supreme Court ruling, it concluded that the Transfer of Property Act did not apply to government grants under the Government Grants Act, 1895. Therefore, the assessee was deemed eligible for depreciation despite the absence of a registered sale deed for the transferred property.

Based on the facts and legal interpretations presented, the Tribunal upheld the decision of the CIT (Appeals) and dismissed the revenue's grounds. The appeal was consequently dismissed, affirming the allowance of depreciation on the buildings in question.