Commissioner of Income Tax vs Thanthai Periyar Transport Corporation Ltd.

R. Jayasimha Babu, J.—The first question referred to us concerning the respondent-assessee for the assessment years 1979-80 and 1980-81 is as to whether the Tribunal was right in holding that no registered document is necessary for conveying the property in favour of the assessee by the Government and that the assessee is entitled to depreciation on the buildings. A similar question was considered by this court in respect of another assessee. This court had held that the depreciation can be claimed even though the assessee claiming depreciation is not the owner of the building under a registered instrument. The Supreme Court in the case of M/s Mysore Minerals Limited, M.G. Road, Bangalore Vs. The Commissioners of Income Tax, Karnataka, Bangalore, , has held that wide meaning must be given to the term "owner" u/s 32 of the Act and that though the building may not be registered in the name of the assessee, if the assessee was in possession after any port payment of the price, the assessee is entitled to depreciation. In this case the property had been handed over to the assessee by the Government and such grant by the Government under the Government Grants Act was not required to be registered. The first question is, therefore, answered in favour of the assessee and against the Revenue.

The second question as to whether the Tribunal was right in holding that the contribution to the insurance fund amounting to Rs. 70,600 is an admissible deduction while computing the income of the assessee is to be answered in favour of the Revenue and against the assessee in the light of the decision of this court in the case of Commissioner of Income Tax Vs. Pallavan Transport Corporation Ltd., . It was held therein that the amount contributed by the State Government transport undertaking to the statutory insurance fund for making payment to third parties, is a provision to meet the contingent liability and that such contributions were not deductible. The second question is, therefore, answered in favour of the Revenue and against the assessee.