Commissioner of Income Tax vs Mohd. Bux Shokat Ali (No. 1)

Heard learned counsel for the petitioner.

No one appears on behalf of the respondents in spite of service.

This application u/s 256(2) of the Income Tax Act, 1961, at the instance of the Commissioner of Income Tax, 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 Income Tax Appellate Tribunal was legally justified in upholding the order of the learned Commissioner of Income Tax (Appeals) directing the Assessing Officer to allow depreciation on the vehicles which were not registered in the name of the assessee-firm ?"

The order dated January 12, 1997, passed in I. T. A. No. 78/JP of 1993 for the assessment year 1988-89. The Tribunal has rejected the application u/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.

Section 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 u/s 256(1) by holding that the question does not involve interpretation of Section 32 of the Act.

The application u/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 dated January 12, 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.