In case of mere advancing depreciation cannot be allowed and in case of finance lease only lessee can claim depreciation

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Briefly stated the facts of the case for the A.Y. 1998-99 are that the assessee bank filed its return claiming depreciation of `25,70,03,293. The Assessing Officer observed that there was substantial variation between the amount of depreciation as per books of account and that claimed in the computation of income. Such variation was found mainly due to 100% depreciation claimed on leased assets to the tune of `9,72,74,434 during the year. This depreciation was in addition to the claim of depreciation in respect of certain other assets leased in earlier years. The Assessing Officer observed that the claim of depreciation on assets leased up to assessment year 1997-98 was disallowed by him making a detailed discussion in the assessment order passed for assessment year 1997-98. Following the same, he disallowed depreciation on the assets leased prior to the year in question. In the present special bench we are concerned only with the depreciation on the asset claimed to have been leased during the current year. The particulars of such asset purchased and claimed to have been leased out during the year have been tabulated in para 2.4 of the assessment order in which it has been noted that - the Name of supplier is Thermax Limited; Name of the Lessee is Indo Gulf Fertilisers and Chemical Corporation; the Description of asset is boiler, Lease agreement is dated 04.09.1997; Cost of the asset is `19.45 crore; and Depreciation claimed in this year is `9.72 crore. On being called upon to substantiate the allowability of depreciation allowance on this lease transaction entered into with Indo Gulf Fertilisers and Chemical Corporation on 04.09.1997, the assessee furnished copy of Lease agreement, Purchase bills, Details of payment made to the supplier and also the details of Delivery challans. The assessee claimed that since he was the rightful owner of the asset, therefore, claim for depreciation was allowable

Citation :
M/s.IndusInd Bank Limited 8th Floor, Tower One, One Indiabulls Centre 841 Senapati Bapat Marg Elphinstone Road (West)Mumbai – 400 013.PAN: AAACI1314G. (Appellant) Vs. The Addl.Commissioner of Income-tax Special Range – 15 Mumbai.(Respondent)