Per Shri Chander Singh. Accountant Member - This appeal by the assessee for the assessment year 1984-85 has been directed against the order of rectification u/s 154 of the Income-tax Act.

2. The assessee, Dr. Jose Julio D’Costa, is a consultant surgeon and is married and is governed by the Portuguese Civil Code. The assessee had claimed depreciation of Rs. 55,140 on the hospital building, surgical equipment, X-ray equipment, air-conditioners, furniture and fixtures, etc. During the course of regular assessment proceedings, the Assessing Officer had allowed depreciation, as claimed by the assessee.

3. The Assessing Officer, however, issued the notice of rectification on the ground that the assessee was not the full owner of the assets on which depreciation was claimed and allowed. After hearing the assessee, the Assessing Officer held that the depreciation was not admissible in the case of a fractional owner, in view of the Supreme Court decision in the case of Seth Banarsi Das Gupta v. CIT [1987] 166 ITR 783. He accordingly rectified the assessment and withdrew the depreciation of Rs. 55,140. The assessee also did not succeed before the first appellate authority.

4. The learned counsel for the assessee, Shri G.N. Gadgil, strongly argued before us that there was no material before the Assessing Officer or the CIT(A) to withdraw the depreciation allowed to the assessee during the course of the assessment proceedings. The CIT(A) was in error in holding that the assessee had only half-share in the assets on which the depreciation was claimed. The CIT(A) failed to appreciate that the assessee was governed by the Portuguese Civil Code and therefore, the decision of the Supreme Court in the case of Seth Banarsi Das Gupta (supra) was not applicable to the assessee. The learned counsel has also taken us through sec. 5A of the Income-tax Act and pointed out that the income computed under the Act has to be equally apportioned between the spouses. The income under the Income-tax Act has to be computed after allowing the allowable expenditure and disallowing the expenses which are not incidental to the earning of the profit. The depreciation is one such item which has to be deducted in computing the income of the assessee. It is only after deduction of the depreciation that the total income can be arrived at and apportioned between the spouses.

5. The learned counsel asserted that the communion of the wife and husband was the full owner of the property and, therefore, the claim of depreciation was an admissible deduction. The revenue was not legally justified in coming to the conclusion that the assessee was only the fractional owner of the assets on which the depreciation has been claimed. To buttress his arguments, the learned counsel has taken us through the decisions of the Bombay High Court in the cases of CIT v. Purushotam Gangadhar Bhende [1977] 106 ITR 932 and CIT v. Modu Timblo (Individual) [1994] 206 ITR 647. The learned counsel reiterated that the assessee is the full owner of the assets and hence, he is entitled to the depreciation. He also argued that the case of the assessee should be understood with reference to the Portuguese Civil Code and the relevant provisions of the Income-tax Act. The rectification, therefore, was not justified and the order of the CIT(A), therefore, should be vacated and the revenue should be directed to allow the depreciation to the assessee.

6. The learned Sr. departmental representative. Dr. Sunil Pathak, on the other hand, stoutly defended the order of the CIT(A). He argued that as per the scheme of the Act, the assessment has to be made on the individual and not on the communion. He has taken us through the provisions of sec. 5A and pointed out that in the said section, it has been clearly laid down that the assessment should be framed on an individual and not on the communion. He also pointed out that as per the Portuguese Civil Code, the assessee is only 50% owner of the assets. In this reg