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2023 (5) TMI 1237 - AT - Income TaxExcess claim of Depreciation - appellant had claimed depreciation on assets under “Finance Lease” - Scope of AS-19 issued by the ICAI - determination of ownership of asset - CIT-A deleted the addition - HELD THAT:- We find that the Ld. CIT(A) has duly taken the note that after issuance of AS-19 issued by the ICAI, the CBDT vide Circular No. 2/2001 dated 9 February 2011 has clarified that capitalization of assets acquired under the finance lease by the lessees in their books of account will not have any bearing on the allowance of depreciation on those assets u/s 32 of the Income Tax Act and also states that the ownership of the asset is determined by the terms of contract between the lessor and the lessee. As per the above circular the owner is entitled to depreciation, whether he is lessee or lessor, depending upon the terms of the contract. CIT(A) taken the note of case of ICDS Ltd. [2013 (1) TMI 344 - SUPREME COURT] wherein as reaffirmed the position that in a leasing transaction it is the lessor and not the lessee, who is entitled to claim depreciation on the leased assets. Hence, the order of the Ld. CIT(A) is in accordance with law - Decided against revenue.
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