Rajasthan H.C : Whether, on the facts and circumstances of the case, the Tribunal was justified in law in allowing the claim of the assessee-firm for deduction on account of depreciation in respect of vehicles which were registered in the name of one or more partners of the firm and used by the firm for its business ?

High Court Of Rajasthan

CIT vs. Mohd. Bux Shokat Ali (No. 1)

Section 256(2)

Asst. Year 1988-89

Rajesh Balia & Mohd. Yamin, JJ.

D.B. IT Ref. Appln. No. 31 of 1998

22nd February, 2000

Counsel Appeared : Sandeep Bhandawat, for the Applicant

JUDGMENT

BY THE COURT :

Heard learned counsel for the petitioner. No one appears on behalf of the respondents in spite of service. This application under s. 256(2) of the IT Act, 1961, at the instance of the CIT, Jodhpur, was filed. By this application the applicant has requested the Tribunal to refer the following question : “Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in upholding the order of the learned CIT(A) directing the AO to allow depreciation on the vehicles which were not registered in the name of the assessee-firm ?” The order dt. 12th Jan., 1997, passed in ITA No. 78/JP of 1993 for the asst. yr. 1988-89. The Tribunal has rejected the application under s. 256(1) for making reference of the aforesaid question to this Court for its opinion. No dispute on the facts in the context of the controversy has been raised that the vehicle was registered in the name of one of the partners of the firm. However, depreciation in respect of it has been claimed by the firm as the same was used for the purpose of the business of the firm. Sec. 32 under which the claim for depreciation has been made reads as under : “In respect of depreciation of buildings, machinery, plant or furniture owned wholly or partly by the assessee and used for the purposes of the business or profession.” We are of the opinion that the Tribunal was in error in rejecting the application under s. 256(1) by holding that the question does not involve interpretation of s. 32 of the Act. The application under s. 256(2) of the Act is, therefore, allowed and we direct the Tribunal to state the case and refer the following question of law arising out of its order dt. 12th Jan., 1997, in I.T.A. No. 78/JP of 1993 :

“Whether, on the facts and circumstances of the case, the Tribunal was justified in law in allowing the claim of the assessee-firm for deduction on account of depreciation in respect of vehicles which were registered in the name of one or more partners of the firm and used by the firm for its business ?”

There shall be no order as to costs of this application.

[Citation : 256 ITR 355]

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