Beneficial ownership for depreciation allows a partner to claim relief even without a registered transfer deed.

Ownership for depreciation under section 32(1) of the Income-tax Act is not confined to formal registered title; a wider beneficial meaning applies where the claimant is in possession and exercises dominion over the property in its own right. On that basis, property allotted to a partner on dissolution of a firm can qualify as owned even without a registered transfer deed, and absence of registration under the Registration Act does not by itself defeat the depreciation claim. The assessee was therefore entitled to depreciation, and the contrary view was rejected.

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Issues: Whether depreciation under section 32(1) of the Income-tax Act, 1961 could be denied on the ground that property allotted to the assessee on dissolution of a partnership firm was not supported by a registered transfer document and the assessee was therefore not the owner of the building.

Analysis: The statutory requirement for depreciation is that the claimant must be the owner of the property. Ownership for this purpose is not confined to formal legal title. The expression "owned" in section 32(1) has to receive a wider meaning, covering a person in possession and enjoying dominion over the property in his own right so as to exclude others, even if no registered deed has been executed. The dissolution of the firm and allotment of the property to the assessee did not require a registered transfer document to establish ownership for depreciation purposes. The absence of registration under the Registration Act did not disqualify the assessee from claiming depreciation.

Conclusion: The assessee was entitled to depreciation, and the view that lack of registration defeated ownership was in law; the issue is decided in favour of the assessee.

Ratio Decidendi: For the purpose of depreciation under section 32(1) of the Income-tax Act, 1961, ownership is to be understood in a wider, beneficial sense, and formal registered title is not indispensable where the assessee is in possession and exercises dominion over the property in its own right.

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