TMI Blog2012 (11) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... nce no granting of depreciation - Held that:- As decided in M/s.IndusInd Bank Limited Versus ADCIT [2012 (3) TMI 212 - ITAT MUMBAI] Only the lessee can be treated as owner of the asset in case of a finance lease and is entitled to claim depreciation as per law. No depreciation can be allowed to the lessor in case of a genuine finance lease - Finance lease is for a fixed period & non-cancellable. Lessee uses the asset for its entire economic life & all risks and rewards incidental to ownership are transferred to the lessee even though title may or may not be eventually transferred to him. There is a fixed obligation on the lessee for payment of lease money. As no distinguishing feature brought on record, it is fair and reasonable that the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. observed that as is well known, the so called lease transactions have become the conduit for trafficking in tax benefits on the basis of thinking that a lease is a lease and is sacrosanct for tax purposes as long there is a lease agreement. According to the A.O., these arrangements are devoid of commercial reality and merely meant to act as tax transfer devices. The original assessment was completed on 31-3-1998 assessing the income at Rs. 6,22,45,850/- as against the loss returned by the assessee at Rs. 3,94,775/- which was set aside by the ld. CIT(A) vide order dtd. 20-11-98. Pursuant to the order of the ld. CIT(A), the A.O. after disallowing depreciation of Rs. 6,26,40,625/- completed the assessment at an income of Rs. 6,22,45,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation to the tune of Rs. 5,56,77,625/- claimed on the leased assets under the leasing transaction, which were proved by the assessing officer as plain financial transactions . 8. Brief facts of the above issue are that during the year the assessee has entered into lease transactions and claimed depreciation @ 100% of Rs. 7,04,94,417/-. The A.O. observed that the so called lease transactions have become the conduit for trafficking in tax benefits on the basis of thinking that a lease is a lease and is sacrosanct for tax purposes as long as you have a lease agreement. These arrangements are devoid of commercial reality and merely meant to act as tax transfer devices. The A.O. after examining the lease agreements held that the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was also placed on the judgment of Hon ble Supreme Court in Asea Brown Boveri Ltd. vs. Industrial Finance Corporation of India (2006) 154 Taxman 512 (SC). He, therefore, submits that the relief allowed by the ld. CIT(A) be reversed. In alternative he submits that in the interest of justice he has no objection if the issue is set aside to the file of the A.O. to decide the same in the light of the decision of the Hon ble Apex Court and Special Bench of the Tribunal (supra). 11. We have carefully considered the submissions of the ld. D.R. and perused the material available on record. We find merit in the plea of the ld. D.R. that the issue stands covered by the decision of the Special Bench of the Tribunal in the case of IndusInd Bank L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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