Depreciation for business use extends to assets kept ready for use; tanker registration was not decisive for income-tax relief.

Depreciation under section 32 is allowable where the assessee owns the asset and uses it for business, and "use" extends to passive use or assets kept ready for use. On the facts, material showing delivery, steps for registration, road tax payment, challan, and penalty order supported the conclusion that the two oil tankers were either put to business use or at least kept ready for such use; registration under motor vehicle law was not a ative for depreciation. The authorities could not disregard that evidence on conjecture, particularly where the presumption of regularity under section 114 of the Evidence Act applied to the official acts relied upon.

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Issues: Whether depreciation under section 32 of the Income-tax Act, 1961 could be denied on two oil tankers on the ground that they were not shown to have been registered or lawfully plied on the relevant date, despite material showing delivery, registration steps, road tax payment, challan and penalty on the last day of the accounting year.

Analysis: Depreciation under section 32 is available where the assessee owns the asset and uses it for the purposes of business. The expression "used" is not confined to active, full-year or legally perfect user; it includes passive user and assets kept ready for use. The presumption under section 114 of the Indian Evidence Act, 1872 regarding regular performance of official and judicial acts was relevant to the challan and criminal court order, and the authorities below could not reject that material on speculation or conjecture. Registration under the motor vehicle law was not treated as a decisive condition for income-tax depreciation, and the evidence indicated that the tankers had in fact been put to business use in the relevant year or, at the least, were ready for such use.

Conclusion: Depreciation could not be denied, and the assessee was entitled to claim depreciation on the two oil tankers.

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