Fractional ownership does not support depreciation claims; wrongly granted allowance can be withdrawn by rectification under section 154.

Depreciation under section 32(1) was confined to an assessee who is the owner of the asset, so a fractional or partial owner of plant and machinery could not claim the allowance on that basis. The Tribunal treated the Supreme Court ruling on ownership as binding and rejected the argument that the earlier statutory wording was materially wider. Because the original grant of depreciation was contrary to that legal position, its withdrawal was treated as rectification of a mistake apparent from the record under section 154 and was upheld in favour of the Revenue.

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Issues: Whether a fractional owner of plant and machinery used in business is entitled to depreciation under section 32(1), and whether withdrawal of wrongly granted depreciation could be made by rectification under section 154.

Analysis: The provision for depreciation was held to apply only where the assessee is the owner of the asset, and the Supreme Court decision on the point was treated as binding even though the original assessments had been completed earlier. The Tribunal rejected the contention that the words used in the earlier Act were materially wider than those in section 32(1), and held that the legal position clearly excluded depreciation on a mere fractional claim. On that basis, the earlier grant of depreciation was treated as a mistake apparent from the record and was capable of rectification.

Conclusion: A fractional owner is not entitled to depreciation on the basis of partial ownership, and the rectification withdrawing the allowance was upheld in favour of the Revenue.

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