MYSORE MINERALS LTD., M.G. ROAD, BANGALORE versus COMMISSIONER OF INCOME TAX, KARNATAKA, BANGALORE

Citation: [1999] SUPP. 2 S.C.R. 182 · Decided: 01-09-1999 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MYSORE MINERALS LTD., M.G. ROAD, BANGALORE 
v. 
COMMISSIONER OF INCOME TAX, KARNATAKA, aANGALORE 
SEPTEMBER 1, 1999 
B 
[S. RAJENDRA BABU AND R.C. LAHOTI, JJ:] 
Income tax Act, 1961: 
Section 32(1)-AY 1981-82_.:._Depreciation-Claim of-Expression 
C "building owned by the assessee"-Meaning and scope of-Assessee made 
part payment to Housing Board and was allotted houses and given 
possession-Assessee in turn allotted the said houses to its staff who were 
actually using the same-However, deed of conveyance not executed by the 
Housing Board-Held: The said expression refers to the person in whom for 
D the time being vests the dominion over, and the right to use, the building and 
who is actually using the building for the purpose of his business or 
profession-Hence, assessee entitled to claim depreciation in respect of the · 
said houses although deed of conveyance not executed-Transfer of Property 
Act, 1882, S.54. 
E 
F 
Interpretation of Statutes: 
Taxing statutes-Interpretation of-Held: Where two interpretations 
are possible, the one favourable to the assessee should be preferred. 
Words and Phrases: 
"Owner", "Own", "owned", "ownership" and "building owned by the 
assessee"-Meaning of-Jn the context of S.32(1) of the income Tax Act, 
1961. 
The appellant-assessee had purchased for the use of its staff seven low 
income group houses from the Housing Board. The assessee had made part 
G payments and was allotted the houses followed by delivery of possession by 
the Housing Board. The actual deed of conveyance was not executed by the 
Housing Board in favour of the assessee. The assessee in turn allotted the 
said houses to its staff who was actually using the same. 
The assessee claimed depreciation under Section 32 of the Income Tax 
H Act, 1961 for the assessment year 1981 - 82 in respect of the said houses. 
182 
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.... ; 
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MYSORE MINERALS LTD. v.C.l.T. 
183 
The assessing officer rejected the claim on the ground that the assessee had A 
not become owner for want of deed of conveyance in its favour. The 
Commissioner of Income Tax allowed assessee's appeal. The Income Tax 
Appellate Tribunal set aside the decision by CIT on a reference. UIS 256, 
the H.C. agreed with the view taken by CIT. 
On behalf of the assessee it was contended that vesting of a title in the B. 
assessee though short of absolute ownership should entitle the assessee to 
claim depreciation under Section 32 of the Act. 
On behalf of the Revenue it was contended that the term 'owned' 
occurring in Section 32(1) should be assigned its legal meaning and without 
the execution and registration of a sale deed the assessee was not entitled C 
to claim depreciation under Section 32 of the Act. 
Allowing the appeal, the Court 
HELD: 1.1. Section 32 of the Income.Tax Act, 1961 confers a benefit 
on the assessee. The provision should be so interpreted and the words used D 
therein should be assigned such meaning as wou,ld enable the assessee 
securing the benefit intended to be given by the Legislature to the assessee. 
It is also well settled that where there are two possible interpretations, the 
one, which is favourable to the assessee, should be preferred. [186-D-E] 
1.2. The terms 'own', 'ownership' and 'owned' are generic and relative E 
· terms. They have a wide and also a narrow connotation. The meaning would 
depend on the context in which the terms are used. (186-E-F] 
Black's law Dictionary, 6th Edn, Dias on Jurisprudence, 4th Edn, p. 
400 and Strud's Judicial Dictionary, referred to. 
1.3. The term 'owned' occ111rring in Section 32(1) of the Act must be 
assigned a wider meaning. Any 0111e in possession r:>f property in his own title 
exercising such dominion over tl!le property as would enable others being 
excluded therefrom and having right to use and occupy the property and/or 
F 
to enjoy its usufruct in his own r·ight would be the owner of the buildings G 
though a formal deed of title may not have been executed. Therefore, the 
expression "building owned by tlte assessee" occurring in Section 32(1) of 
the Act, means the person who hawing acquired possession over the building 
in his own right uses the same for the purposes of the business or profession 
though a legal title has not been conveyed to him consistently with the 
requirements of laws such as Transfer of Property Act, Registration Act etc. H 
184 
SUPREME COURT REPORTS [1999] SUPP. 2 S.C.R. 
A but nevertheless is entitled to hold the property to the exclusion of all

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