Finance lease ownership determines depreciation entitlement; accounting standard capitalisation does not alter income tax allowance treatment. Ownership in finance lease transactions determines entitlement to depreciation under the Income-tax Act and is fixed by the terms of the contract between lessor and lessee; sham or non-existent assets created by hawala preclude depreciation, and sale-and-leaseback claims must be examined for substantive ownership. The Accounting Standard requiring lessee capitalisation in financial leases does not, by itself, alter the allowance of depreciation under tax law.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Finance lease ownership determines depreciation entitlement; accounting standard capitalisation does not alter income tax allowance treatment.
Ownership in finance lease transactions determines entitlement to depreciation under the Income-tax Act and is fixed by the terms of the contract between lessor and lessee; sham or non-existent assets created by hawala preclude depreciation, and sale-and-leaseback claims must be examined for substantive ownership. The Accounting Standard requiring lessee capitalisation in financial leases does not, by itself, alter the allowance of depreciation under tax law.
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