COMMISSIONER OF INCOME TAX ERODE Vs. A SIVAKAMI

JUDGEMENT

(1.) THE revenue has come up on appeal against the common order of the Income Tax Appellate Tribunal, Madras 'd' Bench, dated 21. 9. 2007 passed in I. T. A. Nos. 2805 and 2806/mds/2005 against the assessees- wife and husband respectively in respect of the assessment year 2002-2003 by formulating the following common substantial questions of law:

(2.) AS the issue involved in both these appeals is one and the same, the facts relating to T. C. A. No. 1261 of 2009 are stated below by taking it as a typical case for the sake of discussion: the relevant assessment year is 2002-2003. The assessee is an individual and filed return of income for the assessment year 2002-2003 on 31. 10. 2002 admitting total income of Rs. 74,100 + Agricultural income of Rs. 74,000/- and the same was processed under Section 143 (1 ). A survey under Section 133-A was conducted in the business premises of the assessee on 13. 3. 2002 and a notice under Section 143 (2) was issued to the assessee during the course of survey. The assessee's husband in his sworn statement stated that he and his wife had borrowed Rs. 50 to 55 lakhs for their transport business and incurred expenses towards maintaining the buses and as such entitled to depreciation. On scrutinising the return of income it was found that the assessee claimed depreciation of Rs. 8,25,883/ -. To verify the correctness of the claim the assessee was asked to produce the copies of route permit under RC books of all the vehicles. It was found that the assessee was not the owner of three buses and the basic condition under Section 32 (1) of the Income-tax Act to claim depreciation is that the assets should be owned by the assessee and on that ground the claim of depreciation in respect of 3 buses bearing Registration Nos. TN. 36 L-7888, TN. 36. M-7888 and TN. 36. H. 7889 stood in the name of K. Chinnusamy for the former two buses and one K. Poongodi for the later bus was denied on the ground that according to Section 32 (1) of the Income-tax Act the basic condition to claim depreciation was that the assets should be owned by the assessee. Despite the fact that the assessee has made available much more voluminous documents to prove that the income and the expenditure has been received and expended only by the assessee the assessing officer on the ground that mere admission of the income of the assessee in the assessee's hands cannot per se permit the assessee to claim higher rate of depreciation and rejected the claim of depreciation sought for by the assessee. On appeal at the instance of the assessee, the Commissioner of Income-tax (Appeals) accepted the case of the assessee and allowed the appeal. The further appeal to the Tribunal has also ended in dismissal. The present appeals are filed challenging the common order of the Tribunal dated 21. 9. 2007 made in respect of the assessee as well as her husband.

(3.) WE heard the argument of the learned counsel for the revenue, who assailed the order of the Tribunal on the premise that in respect of the three vehicles as stated in the summation of facts, the assessee was not the owner.