2020 (12) TMI 306

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.... Assessment year 2004-05. The appeal was admitted by a bench of this Court vide order dated 09.07.2013 on the following substantial question of law: (i) Whether, on the facts, in the circumstances and on the grounds urged, the Tribunal was justified in confirming the order passed by the CIT(A) and thereby the order passed by the 2nd Respondent in holding that the Appellant was not entitled to claim depreciation on leased assets under Section 32 of the Act? (ii) Whether on the facts, in the circumstances and on the grounds urged, the Tribunal was right in holding that the lease is in the nature of a finance lease and that therefore it is the lessee who is the de facto owner of the leased equipment who is entitled to claim depreciation an....

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....d counsel for the assessee submitted that the substantial questions of law involved in this appeal is squarely covered by decision of the Supreme Court in I.C.D.S. LTD. VS. COMMISSIONER OF INCOME TAX AND ANOTHER, (2013) 350 ITR 527 (SC). It is further pointed out that the tribunal in case of the assessee for the Assessment Year 2002-03 by an order dated 30.10.2015 had permitted deduction under Section 32 of the Act on the depreciation on assets given on lease. Subsequently, the tribunal by placing reliance on its aforesaid order for the Assessment Year 2003-04, by an order dated 25.02.2019 took the similar view in favour of the assessee. It is also pointed out that being aggrieved by the order passed by the tribunal in respect of Assessment....

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....ent in the case before the Supreme Court in I.C.D.S Ltd. supra and in the case of the assessee with regard to ownership, inspection, re possession of the vehicle of the equipment on default, delivery of equipment on expiration of lease and ownership at the end of the lease period are similar. From perusal of clause 8.1 of the agreement, it is evident that the lessee has to ensure the equipment showing the assessee's name as owner and in terms of clause 11 no alteration or improvements to the equipment can be made by the lessee without prior consent from the assessee. Thus, the assessee alone can claim the depreciation allowance. The aforesaid clauses have been interpreted by the Supreme Court in I.C.D.S. Ltd. supra and it has been held....