https://www.taxtmi.com/caselaws?id=188853 Depreciation under section 32(1) remains available to a lessor where the asset is purchased from independent vendors, leased under written agreements to unrelated users, and the documentation shows continuing ownership in the lessor. The decisive test is whether the transaction is in substance a finance arrangement that transfers the essential incidents of ownership to the lessee; on the facts noted, the lease terms did not show transfer of ownership, the leases did not cover most of the assets' useful life, and the assets retained residual value. Clauses reserving title and requiring return of the equipment supported the lessor's ownership, and the revenue did not prove a sham or disguised transfer. Depreciation was therefore allowable. en-us Fri, 07 Sep 2001 00:00:00 +0530 Sat, 17 Dec 2016 18:45:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=188853 Depreciation under section 32(1) remains available to a lessor where the asset is purchased from independent vendors, leased under written agreements to unrelated users, and the documentation shows continuing ownership in the lessor. The decisive test is whether the transaction is in substance a finance arrangement that transfers the essential incidents of ownership to the lessee; on the facts noted, the lease terms did not show transfer of ownership, the leases did not cover most of the assets' useful life, and the assets retained residual value. Clauses reserving title and requiring return of the equipment supported the lessor's ownership, and the revenue did not prove a sham or disguised transfer. Depreciation was therefore allowable. Case-Laws Income Tax Fri, 07 Sep 2001 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=188853