Case Law Details
Brief of the Case
ITAT Mumbai held In the case of ICICI Ltd. vs. ACIT that in assessee’s own case for the AY 1995-96, the ITAT referred the case of S.B.I. Home Finance Ltd. v. CIT (2006) 280 ITR 6 in which the Hon’ble Calcutta High Court has held that the leased transactions were genuine. In this case the Finance Company had entered into lease agreement, which was not accepted by the departmental authority as genuine transaction and the claim of the depreciation was denied. The Hon’ble High Court has held that even though the premises of the lease given to 3rd party have an option to purchase the property, the right to such option does not affect the ownership of lessor and the lessor was, accordingly, entitled to depreciation. Further Board Instruction No. 1978, dated 31-12-1999 and circular No. 2 of 2001 issued on 9-2-2001 by CBDT, it is clear that nowhere it is suggested that lease back transactions are doubtful transactions or depreciation is not allowable, however, it has been suggested to the departmental authority that they should be regulated. The regulated word does not mean that assessee is not entitled for depreciation. Hence, following ITAT earlier year decision, assessee is entitled for depreciation on such transactions.
Facts of the Case
The Assessee engaged in the business of project financing comprising of foreign currency loan, Rupee loan, leasing etc., filed its return of income on 30.11.1996, declaring total income of Rs.5.59 crores. During the assessment proceedings, a revised working was filed on 07.10.1998, declaring a loss of Rs.1,93,85,59,880/-.The AO completed the assessment u/s 143(3) on 19.03.99,determining the income of the assessee at Rs.1,93,68,46,050/-.
Additions of write backs of bad Debts
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