Depreciation on business property allowed despite unregistered title where buyer paid consideration, took possession, and used it commercially.

Depreciation under section 32 cannot be denied merely because a factory building is not registered in the assessee's name where the assessee has paid consideration, taken possession, and used the property for business. The analysis treats ownership for depreciation purposes as extending beyond complete legal title when the assessee has dominion and control in its own right. It also refers to the statutory context of section 2(47)(v), section 27(iiia), and part performance under section 53A of the Transfer of Property Act, 1882, to support the view that registration is not decisive. Where two views are possible, the interpretation favourable to the assessee is applied.

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Issues: Whether depreciation under section 32 of the Income-tax Act, 1961 can be denied on a factory building merely because the conveyance deed was not registered in the assessee's name, despite the assessee having paid consideration and taken possession.

Analysis: The issue turned on the meaning of ownership for the purpose of depreciation. The Court noted that the assessee had entered into an agreement to purchase the building, paid the consideration, taken possession, and used the property for business. It relied on the line of authority holding that, for section 32, ownership is not confined to complete legal title where the assessee has dominion and control over the property in its own right. The Court also noticed the statutory context of section 2(47)(v) and section 27(iiia) of the Income-tax Act, 1961, and the doctrine of part performance under section 53A of the Transfer of Property Act, 1882, to support the view that registration was not ative of entitlement to depreciation. Where two views were possible, the view favourable to the assessee was preferred.

Conclusion: Depreciation could not be denied solely because the factory building was not registered in the assessee's name, and the assessee was entitled to the allowance.

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