Depreciation requires ownership, and toll roads were not treated as plant and machinery for tax depreciation.

Depreciation under section 32 of the Income-tax Act requires ownership of the asset by the assessee, so depreciation cannot be directed on assets not owned by the taxpayer. Toll roads were also not accepted as plant and machinery under Rule 5 of New Appendix I to the Income-tax Rules for depreciation purposes. Both questions of law were answered against the assessee and in favour of the Revenue.

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Issues: (i) Whether depreciation could be directed on assets not owned by the assessee. (ii) Whether toll roads could be treated as plant and machinery for the purpose of depreciation.

Issue (i): Whether depreciation could be directed on assets not owned by the assessee.

Analysis: The question turned on the requirement of ownership under section 32 of the Income-tax Act, 1961, and whether the Tribunal was justified in allowing depreciation on assets not owned by the respondent.

Conclusion: The issue was answered in the negative and in favour of the Revenue.

Issue (ii): Whether toll roads could be treated as plant and machinery for the purpose of depreciation.

Analysis: The question concerned the treatment of toll roads under Rule 5 of New Appendix I of the Income-tax Rules and whether the Tribunal could classify them as plant and machinery for depreciation.

Conclusion: The issue was answered in the negative and in favour of the Revenue.

Final Conclusion: The appeal was disposed of by answering both questions of law against the assessee and in favour of the Revenue.

Ratio Decidendi: Depreciation under section 32 is not allowable on assets not owned by the assessee, and toll roads were not accepted as plant and machinery for the purpose of the claimed depreciation.

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