Depreciation requires ownership of the asset; a section 53A possessory right is not enough without a registered conveyance.

Depreciation under section 32(1) of the Income-tax Act, 1961 is available only to the owner of the asset. The text notes that ownership, not merely possession or a right under section 53A of the Transfer of Property Act, 1882, is required for the allowance. Where the asset is immovable property, title passes only by a registered conveyance, and without a registered sale deed the transferee does not become the owner. On that basis, the Crown Flour Mills were not treated as the assessee's property during the relevant year, so depreciation was not admissible.

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Issues: Whether the assessee-company was entitled to depreciation under section 32(1) of the Income-tax Act, 1961 in respect of the Crown Flour Mills when no registered sale deed had been executed in its favour during the relevant previous year.

Analysis: Depreciation under section 32(1) is available only to the owner of the asset. The words used in the provision were treated as equivalent to ownership, and the corresponding position under section 10(2)(vi) of the Indian Income-tax Act, 1922 was noted to be the same. A right arising under section 53A of the Transfer of Property Act, 1882 was held not to amount to ownership. Since the property was immovable property of more than Rs. 100 in value, title could pass only by a registered sale deed, which had not been executed during the relevant year.

Conclusion: The assessee was not entitled to depreciation because the Crown Flour Mills was not its property during the assessment year.

Ratio Decidendi: Depreciation under section 32(1) of the Income-tax Act, 1961 is admissible only on ownership of the asset, and a possessory interest under section 53A of the Transfer of Property Act, 1882 does not constitute such ownership absent a registered conveyance.

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