D.K. Seth, J. - (1.) This appeal was admitted on the following grounds : "(1) Whether the finding of the Tribunal that your petitioner was not the owner of the said plant is perverse having been arrived at by ignoring the relevant materials and taking into consideration irrelevant and extraneous considerations and such finding is otherwise arbitrary ? (2) Whether the Tribunal having found that the lease dt. 30th Dec., 1994 was not a colourable transaction and was legally valid could hold that your petitioner was not the owner of the said plant ? (3) Whether the Tribunal could hold that your petitioner was not the owner of the said plant and was not entitled to depreciation thereon when neither WPIL nor SIL claimed any ownership of the said plant and claimed any depreciation thereon ? (4) Whether the claim for depreciation on the said plant could be denied when the rental income therefrom was assessed ?"
(2.) The question is dependent on the interpretation of Section 32 of the IT Act, 1961 allowing depreciation to an assessee. The depreciation is available on the items mentioned in Section 32 on satisfaction of the conditions that the plant was owned wholly or partly by the assessee and such plant was used for the purpose of his business. The law is well-settled. The terms 'own', 'ownership' and 'owned' are generic and relative terms having a wide and also a narrow connotation. The ' meaning would depend on the context in which the terms are used. The decision in CIT v. Podar Cement (P) Ltd. is the trend-setter in the concept of ownership, for the purpose of finding out the meaning of the term 'owned' occurring in Section 32(1), assistance may be drawn from the ratio laid down therein. The term "owned" occurring in Section 32(1) must be assigned a wider meaning. Anyone in possession of a property in his own title exercising such dominion over the property as would enable others being excluded therefrom and having the right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner though he may not have formal documents recognized as documents of title under the provisions of the respective laws governing the subject. A person having acquired possession over a property in his own right uses the same for the purpose of business though a legal title may not have been conveyed to him can be construed to be owned by the assessee. If it is proved that it is so owned and is used for the purpose of business, the benefit of Section 32 cannot be denied. In this regard we may rely upon the ratio decided in Mysore Minerals Ltd. v. CIT, cited by Mr. Bajoria in support of his contention. (1) Following Podar Cement (P) Ltd.'s case (supra), a Division Bench of Calcutta High Court in Ledo Tea Co. Ltd. v. CIT, (cited by Mr. Bajoria) has observed that the meaning of the expression "owned" occurring in Section 32 is a vexed question and various High Courts have held that a person put in possession of the property in part performance of the contract as envisaged under Section 53A of the Transfer of Property Act is not an owner in relation to the property in question. (2) On the other hand, several High Courts have held that the expression "owner" should be given a wider meaning. (3) A Division Bench of this Court in CIT v. General Marketing & Mfg. Co. Ltd., relying on the decisions of the apex Court in R.B. Jodha Mal Kuthiala v. CIT, and CIT v. Sahney Steel & Press Works (P) Ltd. (supra) held that the Allahabad High Court in a decision in the case of Add], CIT v. U.P. State Agio Industrial Corporation Ltd. (supra), dealing with the expression "owned" for claiming the benefit of Section 32 of the Act held that it was not necessary that the assessee should be a complete owner. By the words 'complete owner', .the Allahabad High Court meant, that title must have passed to the person claiming the benefit in the manner the law requires it to be. If an assessee is using a property otherwise also it can get its benefit. The Court held that an assessee is nothing but the owner for the purpose of Section 32 of the Act even if it is not the owner enjoying the lawful title by obtaining a document. (4) The Calcutta High Court was called upon to consider a similar controversy in the case of Madgul Udyog v. CIT. The Calcutta High Court agreed with the decision of the Allahabad High Court and relied on the decision in R.B. Jodha Mal Kuthiala v. CIT (supra). The view taken was that for all intents and purposes the person in possession of the property saved by Section 53A of the Transfer of Property Act is entitled to get the benefit of Section 32. This ' decision took into consideration Section 9 of the old IT Act, 1922, now Section 32 of the 1961 Act. Reliance was also placed on CIT v. Sahney Steel & Press Works (P) Ltd. (supra). The Andhra Pradesh High Court held that the assessee may not have the legal title, still be the owner of the property for the purposes of Section 32. (5) In CIT v. Podar Cement (P) Ltd. (supra), the apex Court although was concerned With the scope for the word "owner" within the meaning of Section 32 of the Act, referred to R.B. Jodha Mal Kuthiala v. CIT (supra) and other decisions including the Division Bench decision of this Court in CIT v. General Marketing & Mfg. Co. Ltd. (supra) had held that : "It would thus be seen that where the possession of a property is acquired, with a right to exercise such necessary control over the property acquired which it is capable of, it is the intention to exclude others which evinces an element of ownership."
(3.) On the above principle in this case the learned Tribunal had held that the ownership of the assessee could not be established or accepted because of the reason that there was a stipulation that a third party, other than the lessee to whom the plant was leased out by the assessee, had a right to purchase. In order to appreciate the situation it would be necessary to briefly refer to the facts.;