JUDGMENT
S.B. Sinha, C.J.
1. These references were made at the instance of the Revenue under Section 265(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Income-tax Appellate Tribunal, Delhi Bench ‘B’, Delhi (hereinafter referred to as ‘the Tribunal’), for opinion of this Court on the following question:-
“Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that depreciation in a vehicle which is not registered in the name of the assessed was an allowable deduction in the hands of the assessed?”
2. The basic fact of the matter as has been stated by the Tribunal is as follows:-
“2. The assessed is a company engaged in the manufacture of sugar and having two units, one at Basti and the mother at Waltergang a few kilometers away from Basti. The relevant asstt. year is 1976-77 and the previous year ended on 30.4.1976.
3. During the year under consideration the assessed claimed deduction in the profit and loss account a sum of Rs. 12,300 on account of pension paid to Smt. Satwant Narangt, wife of late Shri Des Raj Narang who was brother of Shri Dev Raj Narang, Managing Director of the company. The ITO rejected the claim of the assessed on the bases of the order for asstt. year 1974-75 where it was held that such payment was not the common practice of the assessed and pension in the case of the Smt. Satwant Narang was an exception covered under Section 40(c)(i); 40(Aii) and 37(1). On appeal the CIT(A) confirmed the disallowance.
4. On further appeal the Tribunal relaying on its order for asstt. year 1974-75 allowed the claim of the assessed.
5. On the above facts the Tribunal rejected the earlier reference application of the revenue on the ground that it was a finding of fact. For similar reasons we reject the reference application of the revenue for this year also.
6. During the year under consideration the assessed claimed remuneration of the Managing Director at Rs. 56,412 which was not allowed by the ITO. The CIT(A), however, allowed the claim in full and as the payment was below Rs. 72,000 held to be allowable and justified in the earlier asstt. year 1974-75. The Tribunal upheld the order of the CIT(A) in accordance with the earlier order of the Tribunal.
7. On similar facts the Tribunal rejected the reference application of the revenue for asst. year 1974-75. For the reasons fully discussed in the order dated July 7, 1983 with which we agree we reject the present application of the revenue also.
8. During the course of the asstt. proceedings the ITO objected to the consumption of the lubricants in the Basti and Walterganj units. According to the ITO the value of lubricating oil consumed by the assessed at the Basti unit Rs. 137 per qtl. was excessive compared to Rs. 69 per hundred litre last year. Having regard to the production during the year, the ITO was of the view that the expenditure claimed was excessive. He, therefore, recalculated the allowable expression on this account at Rs. 55 per hundred litre and disallowed Rs. 80,419 out of Rs. 1,34,222. Similarly he made objections in the Waterganj unit and disallowed Rs. 1,25,000 out of Rs. 1,59,005 claimed by the assessed. On appeal the CIT(A) went into the details of consumption from asstt. year 1973-74 up to the present asstt year. After carefully looking into the various aspects including the production etc. he deleted the addition.
9. On appeal the Tribunal upheld the order of the CIT(A) in the light of the Tribunal’s order for asstt. year 1975-76. The above order, in our opinion, is a pure finding of fact and no referable question arises out of the said order of the Tribunal.
10. During the preceding year under consideration the assessed purchased a car for Rs. 18,000. The car was insured under the Motor Vehicle Act with effect from 22.1.1976. The car was utilized by the company. The assessed, therefore, claimed depreciation which, however, was rejected by the ITO on the reasoning that the benefit of depreciation can be allowed only to the owner of the car. On appeal the CIT(A) confirmed the order of the Income-tax Officer.
3. The Tribunal on an appeal made to it allowed the claim of the assessed in the following terms:-
“6. Identical cases came up before the Delhi Income-tax Appellate Tribunal in the case of Indure Malleable and Alloy Costing Pvt. Ltd. in ITA No. 1496 (Del)/79-79. In that case the assessed claimed depreciation on motor-cycle which was not registered in the name of the assessed. The Tribunal vide its order dated July 7th, 1980 granted depreciation in the light of the order of the Bombay Bench of the Tribunal in the case of SBC Pvt. Ltd. in ITA No. 6 (Bom) 74-75. Since vehicle in question is a movable asset, the Tribunal held that registration as required in the case of transfer of immovable property is not a condition precedent for legal ownership. Respectfully following the above decisions we held that the assessed is entitled to depreciation on the car which was owned by it but not registered in its name.”
4. Keeping in view the factual matrix, it appears that the question is covered by several case laws, i.e., Commissioner of Income-tax v. Salkia Transport Association; Continental Construction Ltd. v. Commissioner of Income-tax; Commissioner of Income- tax v. Dilip Singh Sardarsingh Bagga; and Commissioner of Income-tax v. Mirza Ataullaha Baig and Anr.
5. Having regard to the aforementioned authoritative pronouncements, we are of the opinion that the question must be answered in the affirmative, i.e., against the Revenue and in favor of the assessed.
6. These references are accordingly disposed of.