Depreciation on business property may be allowed without registered title where possession and control are established.

Depreciation under section 32 is available where the assessee has paid full consideration, taken possession, and used the factory building for business, even though the conveyance deed is not registered in its name. The analysis treats ownership as satisfied by possession, dominion and control in its own right, with part-performance under section 53A of the Transfer of Property Act and the deeming provisions in sections 2(47)(v) and 27(iiia) supporting that view. A contrary insistence on registered legal title was not accepted, and the interpretation favourable to the assessee was preferred where judicial views differed.

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Issues: Whether depreciation under section 32 of the Income-tax Act, 1961 is allowable on a factory building when the assessee has paid full consideration, taken possession and used the property for business, but the conveyance deed is not registered in its name.

Analysis: The ownership requirement for depreciation was examined in the light of the assessee's possession, control and business use of the building, together with the effect of part-performance under section 53A of the Transfer of Property Act, 1882 and the deeming provisions in section 2(47)(v) and section 27(iiia) of the Income-tax Act, 1961. The authorities relied on by the assessee treated legal title as unnecessary where the assessee had dominion over the property in its own right, had paid the consideration and was in exclusive possession and enjoyment. The contrary view that absence of registered title defeats depreciation was not accepted, the preference being for the view favourable to the assessee where judicial opinions differed.

Conclusion: Depreciation was rightly allowed to the assessee notwithstanding the absence of a registered conveyance deed, and the Revenue's challenge failed.

Ratio Decidendi: For the purpose of depreciation under section 32 of the Income-tax Act, 1961, ownership is satisfied where the assessee has possession, dominion and control over the property in its own right, even if legal title has not yet been registered in its favour.

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