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2022 (2) TMI 1315 - AT - Income TaxDepreciation on Assets (Finance Lease) - ownership of asset - finance lease, all the risks and rewards incidental to ownership of an asset is transferred to the lessee and the lessor cannot claim depreciation on the leased plant and machinery citing the reason that the lessee has not claimed depreciation on the leased plant & machinery - whether AS-19 allows the lessee to claim depreciation on the asset and not the lessor, in case of Finance Lease? - CIT- A deleted the addition - As argued CIT(A) has erred in granting the relief to the assessee, irrespective of the fact that the decision of the Hon’ble Tribunal is being challenged by the revenue before the Higher Forums - HELD THAT:- It appropriate to consider the observations of the Hon’ble Tribunal RELIANCE CORPORATE IT PARK LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- 3 (3) (1) , MUMBAI [2019 (6) TMI 1489 - ITAT MUMBAI] held that the assessee is continued to have ownership of the asset even after leave and license agreement with Reliance Industries Ltd and the assessee has claimed depreciation for earlier two ears. In fact, it has been accepted by the department in assessment proceedings. The assessee further explained that the lessee did not claim depreciation on the leased asset. Therefore, considering over all acts of this case and also by following the ratio of the Hon’ble Supreme Court in the case of ICDS [2013 (1) TMI 344 - SUPREME COURT] we are of the considered view that the assessee is entitled for depreciation on the leased asset as per provisions section 32(1)(ii) of the Act. The Ld CIT(A) after considering relevant facts has right ly deleted additions made by the AO towards disallowance of depreciation, hence we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the revenue. - Decided in favour of assessee.
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