1985 (11) TMI 93

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....unjab, had allotted the shed to one Shri Atul Mallhotra, director of the assessee-company and not to the company itself vide letter of allotment dt. 3rd Jan., 1979 and since according to the ITO the allotment was not transferable for a period of 15 year, it was held that the ownership over the shed continued with Shri Atul Malhtora and that, therefore, the company was not entitled to depreciation under the provisions of s. 32 of the IT Act, 1961. The assessee's plea that the allotment had been vested in the name of the company was rejected by the ITO as according to him in the two assessment years under consideration the assessee-company was not the owner and the ownership vested in Shri Atul Malhotra. When the appeals had been filed agains....

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.... canvass that even though the shed had been formally allotted to Atul Mallhotra, Director of Company, the ownership thereof and in any case the occupancy thereof was with the assessee-company. Referring to a resolution passed in the meeting of the Board of Directors on 9th Feb., 1979, the ld. counsel submits that right from the very beginning when the application for allotment was made by Shri Atul Malhotra on 21st Nov., 1978, the stipulation was that the instalments in respect of the shed shall be paid by the company and Shri Atul Malhotra will be merely a nominee of the company. Further referring to the balance sheet for the period ending30th June, 1979, the directors' report and the schedule of notes forming part of the balance sheet, th....

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....names of the Managing Director or directors and, therefore, when Shei Atul Malhotra applied for the allotment of the shed, the arrangement was that the property in the shed would belong to the assessee-company and not to Shri Atul Malhotra, individual. Even though the formal allotment had been changed in the name of the company only by letter dt.5th Nov., 1983, the fact remains that the occupancy rights of the shed vested in the company right from the beginning. In the light of these facts, it appears to us that the case of the assessee-company claiming depreciation ion the shed and the building constructed thereon would be covered by the provisions of s. 32 (1A) of the IT Act, 1961 which were brought on statue book w.e.f. 1st April, 1971. ....