9911796707
TMI Blog1975 (3) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer while making assessments relating to the assessee, M/s. Bordubi Rice, Flour and Oil Mills, Hoogrijan, made certain additions in the income of the firm and also allowed certain amounts towards depreciation in the assessment orders relating to assessment years 1962-63 and 1963-64. The assessee-firm preferred an appeal against the assessment orders for the two assessment years before the Appellate Assistant Commissioner of Income-tax, who by his common order dated July 29, 1968, relating to these two assessment years held that out of three partners of the firm, Mangtulal Choukhani by himself or through his younger brother, Mahabir Prasad Choukhani, was only a working partner and the benefit of depreciation should be given to Lach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted on behalf of the assessee that according to the terms of the partnership deed ownership of the rice mill in question, which is used by the assessee-firm, lies with the two partners, namely, Banwarilal Choukhani and Mst. Lachmi Devi Choukhani, and the third partner, Mangtulal Choukhani, is not an owner of the mill in question. That being so, depreciation allowance as allowable under section 32 of the Income-tax Act, 1961, cannot be allowed to the assessee-firm, inasmuch as the assessee-firm is not the owner of the mill in respect of which the Income-tax Officer has allowed depreciation allowance. Since depreciation allowance has been allowed in the instant case by the Income-tax Officer and the department has not challenged that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s necessarily that of the assessee. If the buildings, machinery, plant and furniture are not owned by the assessee, even though in the peculiar circumstances of a particular case they may be used by the assessee, no depreciation may be allowed under section 32 although in appropriate cases deductions may be made under the relevant provisions of section 30 of the Act. In the instant case, admittedly, the assessee is the firm and it is also asserted on behalf of the assessee that the assessee-firm does not own the mill but it belongs to the two partners, namely, Banwarilal Choukhani and Smt. Lachmi Devi Choukhani, in their individual capacity. That being the position and that has also been accepted by the learned Tribunal in its judgment, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and used for the purposes of the business or profession of the assessee. That being so, in the instant case, according to law no depreciation allowance was allowable to the assessee-firm and, consequently, the question of distributing the depreciation allowance equally as between the two partners did not arise. In view of the facts and circumstances of this case, we find that the learned Tribunal was not justified in upholding the direction of the Appellate Assistant Commissioner that the benefit of depreciation allowance should be given to Banwarilal Choukhani and Smt. Lachmi Devi Choukhani. In fact, the benefit of depreciation was not at all allowable to the assessee-firm. In the result, we answer the question in the negative and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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