2012 (5) TMI 167

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....pellant is not entitled to claim depreciation in respect of the assets given under hire purchase transaction by virtue of the Board Circular No.689 dated 24.8.1994? 2. The assessee is a non-banking finance company. In respect of the assessment year 1994-95, the assessee claimed depreciation on hire purchase assets under hire purchase transaction. The assessee claimed that they being the owner of the assets and that the hirer not having claimed the depreciation, they were entitled to the grant of depreciation on hired assets. The claim of the assessee was rejected. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income Tax (Appeals). The assessee placed reliance on the beneficial Board Circular No.9 dated 23.....

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....1943, enumerating on allowing depreciation in the case of hire purchase agreement, reads as under: " Departmental clarification. -- The following circular has been issued by the Board for allowing depreciation in the case of assets owned under hire-purchase agreements: Allowances in assessing business income -- Depreciation allowance -- Plant and machinery acquired in hire-purchase agreement. -- The following instructions are issued for dealing with cases in which an asset is being acquired under, what is known as, a hire-purchase agreement:- (1) In every case of payment purporting to be for hire-purchase, production of the agreement under which the payment is made should be insisted on. (2) Where the effect of an agreement is that....