RAJESH BALIA, J. - (1.) HEARD learned counsel for the parties. This is an application under s. 256(2) of the IT Act, 1961, at the instance of the Revenue. The application under S. 256(1) having been rejected by the Tribunal to make a reference to this Court, to refer the following questions said to be questions of law to this Court for its opinion : "(i) Whether, on the facts and in the circumstances of the case the Tribunal was justified in setting aside the order of the CIT(A) and in restoring the case back to his file. (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not confirming the findings of the CIT(A) that in the absence of a registered deed of sale, the assessee- company could not be treated as owner of the property and that, therefore, the ITO was justified in rejecting the claim of depreciation."
(2.) HAVING heard learned counsel for the parties, we are of the opinion that questions of law do arise out of Tribunal's order and the Tribunal was in error in rejecting the application under S. 256 (1) of the IT Act, 1961. The assessee has claimed deduction on account of depreciation in respect of building in which he was carrying on its business though the building has not been transferred to the assessee by way of registered deed. The case of the assessee is that since the assessee has taken over the business of dissolved firm, therefore, no such transfer was required to be made by the registered deed, by the firm which was the owner of the property in question so as to be entitled to claim depreciation in respect of the asset in which business was carried on. It was used by it for carrying on its business. The AO has rejected the claim by holding that since the title to the property has not been transferred through a registered deed, the assessee is not owner of the property in which business is carried on, therefore, he is not entitled to claim depreciation in respect of such property. Ultimately, this reason did not find favour with the Tribunal and the depreciation claimed by the assessee was allowed on the property in question. Page 2 of 3CTR 27/12/2010file://C:\PROGRAM FILES\html\matter3.htm
(3.) THE Tribunal has rejected the application under S. 256(1) of the Act of 1961 by holding that since the Tribunal has followed its earlier order which was in consonance with the view taken by the Allahabad High Court in Addl. CIT vs. U.P. State Agro Industrial Corpn. Ltd. (1981) 20 CTR (All) 141 : (1981) 127 ITR 97 (All) : TC 27R.228, no questions of law arise.;