Depreciation under I T act- asset hire purchase basis

Hire Purchaser is entitled to depreciation in case of property taken on Hire-Purchase. The amount of rentals paid by the Hire-Purchaser is apportioned between the capital amount paid to obtain the ownership of the assets and income payments in respect of its hire charges. You can refer Board Circular No.9 dt. 23-03-1943, this governs the tax treatment of such cases. You can also refer to Case-Law of Karimjee (P) Ltd Vs. ITO 15 SOT 128 (Mum).