Section 10(15A) relief applies only to existing aircraft leases, not agreements for future manufacture and delivery.

Section 10(15A) was held to apply only where an aircraft is acquired under an existing lease agreement executed on or before the statutory cut-off date. An arrangement for aircraft yet to be manufactured did not amount to a lease in law, because a lease requires an interest in existing property and the distinction between existing goods and future goods remained material under property and sale law principles. As the aircraft were not in existence when the agreements were signed, the statutory condition was not met and approval under section 10(15A) was rightly refused.

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Issues: Whether approval under section 10(15A) of the Income-tax Act, 1961 could be granted where the aircrafts were not in existence on the date of the lease agreements and the agreements were only for future manufacture and delivery.

Analysis: Section 10(15A) applied only to payments made to acquire an aircraft on lease under an agreement entered into on or before 1 April 2007. A lease in law requires transfer of an interest in existing property, whereas an arrangement concerning goods yet to be manufactured is only an agreement to sell or an agreement to lease in future. The provisions of the Transfer of Property Act and the Sale of Goods Act supported the distinction between existing goods and future goods. Since the aircrafts were not in existence when the agreements were executed, there was no operative lease and the statutory condition was not satisfied.

Conclusion: Approval under section 10(15A) was rightly refused, and the petitions failed.

Ratio Decidendi: The benefit of section 10(15A) is available only where an existing lease of an aircraft is acquired under an agreement executed within the statutory cut-off date, and not where the agreement relates merely to aircraft to be manufactured and leased in the future.

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