2015 (5) TMI 1068

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....ere urged before the Tribunal:- 1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in upholding the disallowance of depreciation made by the Assessing Officer in respect of certain assets given under 'sale and lease back basis' by treating the lease transactions as finance transactions 2. On the facts and in the circumstances of the case and III the learned Commissioner of Income tax (Appeals) erred in confirming the disallowance of depreciation on motor cars given on finance lease by treating the lease transaction as finance transaction. 3. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in c....

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....the assets and hence it is entitled to claim depreciation. 5. The Assessing Officer observed that the transactions styled as 'sale and lease back' were, in reality, pure finance transactions and the interest of the parties was not that the property in the equipment should pass on to the assessee by way of sale. It is a specie of finance lease; what is received by the assessee from the lessee must be considered as interest on the money advanced and hence the assessee was held to be not entitled to depreciation on the assets. 6. On an appeal filed by the assessee learned CIT(A) affirmed the action of the Assessing Officer and thus further appeal is filed before the Tribunal. 7. At the time of hearing learned counsel appearing on behalf of ....

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....-02 are allowed. 11. In so far as A.Ys. 2002-03 & 2003-04 are concerned, the assessee vide ground No. 1&2, challenged the disallowance of depreciation on assets given under finance by treating the lease transaction as finance transaction. 12. Identical issue has been considered by us in para 9 above. For the reasons given therein, we direct the Assessing Officer to allow claim of depreciation and also withdraw any corresponding benefit given to the assessee by excluding the value of the capital component of the lease rent from the income of the assessee. 13. Ground No. 3 reads as under :- On the facts and in the circumstances of the case and in law, learned CIT(A) erred in confirming the action of the Assessing Officer to treat the noti....

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.... to 6 in the appeal for A.Y. 2002-03. 18. The Assessing Officer concluded that certain amount is disallowable u/s. 14A of the Income Tax Act. On an appeal filed by the assessee learned CIT(A) applied Rule 8D, in the light of the decision of ITAT (Special Bench) in the case of Daga Capital Investment Ltd. (26 SOT 603) wherein the Tribunal accepted the proposition that Rule 8D is retrospective in operation. 19. At the time of hearing learned counsel submitted that the decision of ITAT (SB) in the case of Daga Capital Investment Ltd. (supra) has been reversed by the Hon'ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. (328 ITR 81) wherein it was held that Rule 8D is prospective in operation and hence disallowance, if a....