TMI Blog2023 (5) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. - ITA No. 857/Del/2019 - - - Dated:- 12-5-2023 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Revenue : Shri T Kipgen, (CIT) DR. For the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 22,91,58,130/- in its computation of income. However, as per 3CD annexure of depreciation, it was noticed that depreciation was available amounting to Rs. 14,56,05,769/- (13,20,16,000 + 1,35,89,769),which has resulted into excess claim of depreciation amounting to Rs. 835.52 lakhs. Accordingly, notice u/s 148 was issued to the appellant after prior approval of Pr. CIT, Delhi-7. Order u/s 143(3)/147 was passed on 30.12.2017, Assessing the income at Rs. 2,48,76,97,280/- after disallowance of Rs. 12,65,90,130/- on account of excess claim of depreciation. 2.1 The aforesaid disallowance has been made by the Assessing Officer by making following computation. 5. The assessee vide its reply dated 04.07.2016 has given the following b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed the depreciation of Rs. 1025.68 lacs only. 5.2 In view of the above, the amount of Rs. 12,65,90,130/- (22,91,58,130- 10,25,68,000) is being disallowed and added to the total income of the assessee. 2.2 Against the order before the Ld. CIT(A), the Ld. CIT(A) deleted the addition by observing as under: 6.2 I have carefully considered the findings of the AO and the submissions made by the Ld. AR. From the submission of the Ld. AR it is seen that during the course of appellate proceedings, it is noticed that the appellant had claimed depreciation of Rs. 12,65,90,130/- on assets under Finance Lease . After the issuance of AS-19 issued by the ICAI, the Central Board of Direct Taxes vide Circular No. 2/2001 dated 9 February ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lessees in their books of account will not have any bearing on the allowance of depreciation on those assets under Section 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. Further, as per the above circular the owner is entitled to depreciation, whether he is lessee or lessor, depending upon the terms of the contract. 4.1 Further, the Ld. CIT(A) taken the note of the Hon ble Supreme Court in the case of ICDS Ltd. vs. CIT. The Hon ble Supreme Court has reaffirmed the position that in a leasing transaction it is the lessor and not the lessee, who is entitled to claim deprecation on the leased assets. Hence, we are of the opinion that the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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