Motor vehicle ownership for depreciation follows sale and use, not mutation of the registration certificate.

Title to a motor vehicle passes on completion of sale and is not dependent on mutation of the registration certificate. Failure to transfer registration may expose the parties to penalty under the Motor Vehicles Act, but it does not prevent ownership from passing between transferor and transferee. Because the assessees had purchased and used the vehicles in business during the relevant years, they were treated as owners for income-tax purposes and were entitled to depreciation. The ownership question was answered in favour of the assessees and against the Revenue.

---

---

Issues: Whether the assessee, having purchased and used motor vehicles in business but without mutation of the registration certificate, was their owner for income-tax purposes and therefore entitled to depreciation on them.

Analysis: A motor vehicle is movable property and the passing of ownership is governed by the law of sale. Title passes on completion of the sale and does not depend on transfer of the registration certificate. Failure to report the transfer may attract the penalty provisions under the Motor Vehicles Act, 1939, but it does not affect the passing of title between transferor and transferee. Since the vehicles were purchased and used by the assessees during the relevant previous years, they were the owners for the purpose of claiming depreciation.

Conclusion: The assessees were entitled to depreciation on the vehicles; the question of ownership was answered in their favour and against the Revenue.

Ratio Decidendi: For a motor vehicle, registration in the transferee's name is not a condition precedent to transfer of ownership, and an assessee who has purchased and used the vehicle in business is entitled to depreciation if title has passed by sale.

---