Case Law Details
L & T Finance Ltd. Vs. DCIT (ITAT Mumbai)
Depreciation in the case of finance lease is not admissible to the lessor who is simply a nominal and symbolic owner of the asset whereas the real owner who bears all the risks and rewards incidental to the ownership is the lessee.
In the judgment delivered subsequently in the case of I.C.D.S. Ltd. (supra), the Hon’ble Supreme Court has held that even in the case of finance lease, the lessor is eligible to claim depreciation.
In assessee’s own case in earlier years, the same issue arose before Tribunal, wherein the Tribunal held that in case of finance lease, the lessor was eligible to claim depreciation. Therefore, this issue was squarely covered in favour of the assessee. Hence, the claim of depreciation on earlier years transaction as well as in previous transaction was to be allowed.
Disallowance under section 14A—
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