https://www.taxtmi.com/caselaws?id=449831 Where a finance lease leaves title with the lessor and gives the lessee only a right to use the asset, the lease rentals are treated as revenue expenditure under section 37(1) and not as capital outlay merely because the arrangement is labelled a finance lease. The accounting treatment under AS 19 does not control tax deductibility, and the CBDT circular confirms that accounting classification is not determinative under the Income-tax Act. On those contractual terms, the principal component of rentals for leased computers and networking equipment was allowable, and the disallowance was deleted. en-us Wed, 07 Feb 2024 00:00:00 +0530 Tue, 20 Feb 2024 10:55:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=449831 Where a finance lease leaves title with the lessor and gives the lessee only a right to use the asset, the lease rentals are treated as revenue expenditure under section 37(1) and not as capital outlay merely because the arrangement is labelled a finance lease. The accounting treatment under AS 19 does not control tax deductibility, and the CBDT circular confirms that accounting classification is not determinative under the Income-tax Act. On those contractual terms, the principal component of rentals for leased computers and networking equipment was allowable, and the disallowance was deleted. Case-Laws Income Tax Wed, 07 Feb 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=449831