Tribunal grants appellant's depreciation claim, citing consistency in past decisions and Gujarat High Court's affirmation.

The Tribunal allowed the appellant's claim for depreciation on assets leased to Western Railways, citing consistency in previous decisions and the Gujarat High Court's affirmation. The Tribunal reversed the CIT(A)'s decision and directed the A.O. to allow the depreciation claimed by the appellant, emphasizing the issue had already been settled in the appellant's favor. The appeal was partly allowed in favor of the appellant, with the Tribunal pronouncing the order on 05-07-2013.

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Issues Involved:
1. Disallowance of depreciation on assets leased to Western Railways.
2. Consistency in the application of tax laws across different assessment years.

Detailed Analysis:

1. Disallowance of Depreciation on Assets Leased to Western Railways:
The primary issue in this case revolves around the disallowance of depreciation amounting to Rs. 7,93,490/- on assets leased by the appellant to Western Railways. The appellant contended that the Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming this disallowance and that the depreciation should have been allowed as claimed by the appellant.

The Tribunal had initially set aside the issue to the Assessing Officer (A.O.) for a fresh review in light of the Special Bench decision in the case of IndusInd Bank Limited and the Supreme Court decision in the case of ABB Ltd. However, the appellant argued that the same issue had been adjudicated in its favor in earlier years (A.Y. 2003-04 to 2005-06) by the ITAT, Ahmedabad, which had allowed the depreciation on the same leased assets after verifying the terms and conditions of the lease agreement and considering the Supreme Court judgment.

2. Consistency in the Application of Tax Laws Across Different Assessment Years:
The appellant highlighted that the leased assets, i.e., railway wagons, had been given on lease to Western Railways since A.Y. 1997-98, and the claim of depreciation had been consistently allowed either by the A.O. or by the ITAT in the earlier years. The appellant argued that it was unjustifiable to send back the same issue for re-adjudication in subsequent years when there was no change in the terms and conditions of the lease agreement. The appellant emphasized that once depreciation was allowed in earlier years, the assets became part of the block of assets, and the Written Down Value (WDV) would continue to reduce by granting depreciation year after year.

The Tribunal considered the appellant's application and allowed the miscellaneous application, directing the Registry to fix the case before the regular Bench. The Tribunal noted that the issue in the present appeal was identical to that of earlier years and that the Hon. Gujarat High Court had affirmed the Tribunal's decision in the appellant's own case for earlier years.

Conclusion:
The Tribunal, following the rule of consistency and the decision of the Hon. Gujarat High Court, allowed the claim of depreciation for the appellant. The Tribunal reversed the order of the CIT(A) and directed the A.O. to allow the depreciation claimed by the appellant. The Tribunal emphasized that the issue had already been decided by the Hon. Gujarat High Court in the appellant's favor, and thus, the appellant's ground of appeal was allowed.

Final Order:
The Tribunal pronounced the order in open court on 05-07-2013, deciding the re-called ground in favor of the appellant and partly allowing the appeal.

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