TMI Blog2013 (8) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of its business, satisfying both requirements of Section 32 of the Act and hence, is entitled to claim depreciation in respect of additions made to the trucks, which were leased out - Following decisions of CIT v. Bansal Credits Ltd.[2002 (11) TMI 76 - DELHI High Court], CIT v. M.G.F. (India) Ltd.[2004 (1) TMI 10 - DELHI High Court] and CIT v. Annamalai Finance Ltd.[2004 (10) TMI 51 - MADRAS High Court] - Decided against Revenue. - D.B. Income Tax Appeal No.116/2003 - - - Dated:- 1-7-2013 - Narendra Kumar Jain And Smt. Meena V. Gomber,JJ. For the Petitioner : Mr. J. K. Singhi, Sr. Counsel assisted by Mr. Anuroop Singhi, Mr. Saurabh Jain Mr. Kushagra Sharma For the Respondent : Mr. Sanjay Jhanwar Mr. Atul Saxena OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has preferred this Appeal. 4. Learned counsel for respondent further submitted that the question of hire-purchase was not involved in the present case, therefore, questions framed by this Court, while admitting the appeal, are not at all arise, in the facts and circumstances of the present case. He, therefore, submitted that order admitting the appeal on the aforesaid questions be recalled and appeal be dismissed as no substantial question of law is involved in it. 5. Learned counsel for appellant/revenue fairly and frankly submitted that the question of hire-purchase is not involved in the present case, but the question regarding allowability of the depreciation under Section 32(1) of the Act to the lessor is involved. 6. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for respondent/assessee submitted that the controversy involved in the present case is fully covered by latest decision of Hon'ble Apex Court in Industrial Credit And Development Syndicate Limited vs. Commissioner of Income Tax, Mysore and Another, (2013) 3 SCC 541. He submitted that Hon'ble Apex Court in similar circumstances allowed depreciation under Section 32(1) of the Act to lessor. He also submitted that Hon'ble Apex Court has also held that lessor is owner and, therefore, is entitled for depreciation under Section 32(1) of the Act. 11. Learned counsel for appellant submitted that the judgment of Hon'ble Apex Court is distinguishable as in the said case the depreciation was not allowed to lessee, therefore, the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal by way of Special Leave Petition before Hon'ble Apex Court. In para 8 of the judgment, the Hon'ble Apex Court referred the substantial questions of law, which were framed by High Court for its adjudication. Para 8 of the judgment is reproduced, as under :- 8. Being aggrieved, the revenue preferred an appeal to the High Court under Section 260A of the Act. The High Court framed the following substantial questions of law for its adjudication: 8.1 Whether the appellant (assessee) is the owner of the vehicles which are leased out by it to its customers? and 8.2 Whether the appellant (assessee) is entitled to the higher rate of depreciation on the said vehicles, on the ground that they were hired out to the Appellant's customers . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst. The Revenue argued that since the lessees were actually using the vehicles, they were the ones entitled to claim depreciation, and not the assessee. We are not persuaded to agree with the argument. The section requires that the assessee must use the asset for the "purposes of business". It does not mandate usage of the asset by the assessee itself. As long as the asset is utilised for the purpose of business of the assessee, the requirement of Section 32 will stand satisfied, notwithstanding non-usage of the asset itself by the assessee. In the present case before us, the assessee is a leasing company which leases out trucks that it purchases. Therefore, on a combined reading of Section 2 (13) and Section 2(24) of the Act, the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: "2.(30) 'owner' means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of a hypothecation, the person in possession of the vehicle under that agreement; The general opening words of the Section say that the owner of a motor vehicle is the one in whose name it is registered, which, in the present case, is the lessee. The subsequent specific statement on leasing agreements states that in respect of a vehicle given on lease, the lessee who is in possession shall be the owner. The Revenue thus, argued that in case of ownership of vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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