1975 (3) TMI 11

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....Banwarilal Choukhani, two out of the three partners of the assessee-firm?" The Income-tax Officer while making assessments relating to the assessee, M/s. Bordubi Rice, Flour and Oil Mills, Hoogrijan, made certain additions in the income of the firm and also allowed certain amounts towards depreciation in the assessment orders relating to assessment years 1962-63 and 1963-64. The assessee-firm preferred an appeal against the assessment orders for the two assessment years before the Appellate Assistant Commissioner of Income-tax, who by his common order dated July 29, 1968, relating to these two assessment years held that out of three partners of the firm, Mangtulal Choukhani by himself or through his younger brother, Mahabir Prasad Choukh....

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....rship business will bear all taxes, fees and other taxes in respect of the same." It is submitted on behalf of the assessee that according to the terms of the partnership deed ownership of the rice mill in question, which is used by the assessee-firm, lies with the two partners, namely, Banwarilal Choukhani and Mst. Lachmi Devi Choukhani, and the third partner, Mangtulal Choukhani, is not an owner of the mill in question. That being so, depreciation allowance as allowable under section 32 of the Income-tax Act, 1961, cannot be allowed to the assessee-firm, inasmuch as the assessee-firm is not the owner of the mill in respect of which the Income-tax Officer has allowed depreciation allowance. Since depreciation allowance has been allowed ....

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....e purpose of the business or profession. The use for the purpose of business or profession is necessarily that of the assessee. If the buildings, machinery, plant and furniture are not owned by the assessee, even though in the peculiar circumstances of a particular case they may be used by the assessee, no depreciation may be allowed under section 32 although in appropriate cases deductions may be made under the relevant provisions of section 30 of the Act. In the instant case, admittedly, the assessee is the firm and it is also asserted on behalf of the assessee that the assessee-firm does not own the mill but it belongs to the two partners, namely, Banwarilal Choukhani and Smt. Lachmi Devi Choukhani, in their individual capacity. That bei....