TMI Blog2012 (5) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... GMENT CHITRA VENKATARAMAN, J. This Tax Case (Appeal) filed by the assessee was admitted on the following substantial question of law: " Whether on the facts and the circumstances of the case, the Tribunal was right in law in holding that the appellant is not entitled to claim depreciation in respect of the assets given under hire purchase transaction by virtue of the Board Circular No.689 dated 24.8.1994? 2. The assessee is a non-banking finance company. In respect of the assessment year 1994-95, the assessee claimed depreciation on hire purchase assets under hire purchase transaction. The assessee claimed that they being the owner of the assets and that the hirer not having claimed the depreciation, they were entitled to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d enjoyment of the vehicle. As per the Scheme, the ownership was given to the purchaser. All that the assessee had under the agreement was payment of the hired amount in instalments. In this connection, Circular No.9 [R.Dis.No.27(4)-IT/43], dated 23.3.1943, enumerating on allowing depreciation in the case of hire purchase agreement, reads as under: " Departmental clarification. -- The following circular has been issued by the Board for allowing depreciation in the case of assets owned under hire-purchase agreements: Allowances in assessing business income -- Depreciation allowance -- Plant and machinery acquired in hire-purchase agreement. -- The following instructions are issued for dealing with cases in which an asset is being acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of this allowance being spread evenly over the term of the agreement. If, however, the agreement was terminated either by the outright purchase of equipment or of its return to the owner, the deduction should cease as from the date of the termination. (5) An assessee claiming this deduction should be asked to furnish a certificate, from the vendor or other satisfactory evidence, of the initial value (as described above). Where no certificate or satisfactory evidence is forthcoming, the initial value should be arrived at by computing the present value of the amount payable under the agreement at an appropriate rate per centum; in doubtful cases the facts should be reported to the Board. " Thus the Board pointed out that in matte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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