Ownership and substance govern depreciation and donation relief, with business assets used by an agent and a kiln gift both qualifying.

Depreciation was held allowable on plant and furniture owned by the assessee and used in its business, even though physical use was by a sales manager acting on its behalf; ownership, not the user's identity, was the ining test. The cost of a kiln prepared from funds set apart for the University of Bombay was also treated in substance as a monetary donation, so relief under section 15B was available. Both issues were answered in favour of the assessee, with costs awarded.

---

---

Issues: (i) whether depreciation was admissible to the assessee on assets owned by it but used by its sales manager in the course of the assessee's business; (ii) whether the cost of a kiln fabricated and presented to the University of Bombay could be treated as a donation qualifying for relief under section 15B.

Issue (i): whether depreciation was admissible to the assessee on assets owned by it but used by its sales manager in the course of the assessee's business.

Analysis: Depreciation under section 10(2)(vi) is allowable in respect of plant or furniture being the property of the assessee. The decisive factor is ownership, not the identity of the person physically using the assets. The Marketing Company was only a sales manager acting for and on behalf of the assessee, and the assets remained the assessee's property while being used in the business.

Conclusion: Depreciation was admissible to the assessee. The answer on this issue was in favour of the assessee.

Issue (ii): whether the cost of a kiln fabricated and presented to the University of Bombay could be treated as a donation qualifying for relief under section 15B.

Analysis: Section 15B contemplates sums paid as donations to qualifying institutions. On the facts, the assessee had set apart and applied Rs. 6,600 for the University's research purpose, and the kiln was prepared out of that amount and handed over to the University. The transaction was to be judged by its substance, not its form, and in substance a monetary donation had been made to the qualifying institution.

Conclusion: The amount of Rs. 6,600 qualified for relief under section 15B. The answer on this issue was in favour of the assessee.

Final Conclusion: Both referred questions were answered in favour of the assessee, with costs awarded to the assessee.

Ratio Decidendi: For depreciation, the controlling test is ownership of the asset by the assessee rather than the identity of the person using it for the assessee's business; for charitable relief, a donation is to be determined by its real substance and may qualify even if the money is applied through the provision of an article made out of that sum.

---