Depreciation claim u/s32 for vehicles in partner's name: firm's beneficial ownership and business use upheld; reference dismissed.

Depreciation under s.32 on vehicles registered in a partner's name was held allowable to the firm where, on Tribunal findings, the firm had dominion, use, and beneficial ownership for business purposes; applying SC in Mysore Minerals, "ownership" is satisfied by vested control and entitlement to use, so no referable question of law arose and reference was declined. On the Revenue's plea that the firm was benami and assessment should be protective, the Tribunal's finding that the assessee-firm was genuine was treated as a pure finding of fact, not shown to be perverse or based on no material; hence no question of law arose and the application seeking reference was dismissed.

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Issues Involved: Application u/s 256(2) of the Income-tax Act, 1961 to direct the Income-tax Appellate Tribunal to refer questions of law arising from its order dated January 8, 1991, for the assessment year 1987-88.

Depreciation on Vehicles:
The first question pertains to allowing depreciation on vehicles not registered in the name of the assessee-firm but in the name of a partner. The court held that ownership for depreciation purposes is wider, as established by the Supreme Court, and ownership includes dominion over the property. The court cited the case of Mysore Minerals Ltd. v. CIT to support this interpretation. The court emphasized that ownership for depreciation allowance under section 32 of the Act does not require formal legal ownership but rather the right to use and occupy the property. The court declined to refer the question to the Tribunal, stating that the answer is self-evident based on the facts found by the Tribunal.

Genuineness of the Firm:
The second question revolves around whether the firm is a benami entity for another firm with six partners. The Tribunal overturned the assessing authority's finding and held the firm with eight partners as genuine. The court noted that the genuineness of the firm is a question of fact, and unless the finding is challenged as perverse or based on irrelevant considerations, it does not give rise to a question of law. Therefore, the court upheld the Tribunal's decision to reject the application u/s 256(1) regarding the second question.

In conclusion, the court dismissed the application, emphasizing that the Tribunal's findings on both questions were based on factual determinations and did not warrant a reference to the court.

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