Real ownership required for depreciation on immovable assets; possessory interest without registered conveyance is insufficient.

Depreciation on immovable business assets under section 10(2)(vi) required that the building, machinery or plant be the assessee's property and be used for business. The use condition was not disputed; the ining issue was ownership. The phrase "being the property of the assessee" was treated as equivalent to real ownership, and a possessory or contractual interest protected by section 53A of the Transfer of Property Act, 1882 did not pass title in immovable property worth more than Rs. 100 without a registered conveyance. The assessee-company was therefore not entitled to depreciation on the Crown Flour Mills assets.

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Issues: Whether the assessee-company was entitled to depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922, in respect of the building, machinery and plant of the Crown Flour Mills when no registered sale deed had been executed in its favour.

Analysis: Depreciation under section 10(2)(vi) required that the relevant building, machinery or plant must be the property of the assessee and must be used for the business. The use condition was not in dispute. The controversy turned on whether the assessee had ownership. The words "being the property of the assessee" were held to be equivalent to ownership, and the corresponding phrase in section 32(1) of the Income-tax Act, 1961 was treated as confirming that position. A mere interest protected by section 53A of the Transfer of Property Act, 1882 did not create ownership or pass title in immovable property worth more than Rs. 100 without a registered sale deed.

Conclusion: The assessee-company was not the owner of the Crown Flour Mills during the relevant assessment year and therefore was not entitled to depreciation under section 10(2)(vi).

Ratio Decidendi: For claiming depreciation on immovable assets, the assessee must establish real ownership of the property; a contractual or possessory interest under section 53A of the Transfer of Property Act, 1882 is insufficient in the absence of a registered conveyance.

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