Lessor’s Right to Depreciation on Leased Assets in Finance Lease Upheld by ITAT Delhi

DCIT Vs Religare Finvest Ltd (ITAT Delhi) The issue revolved around whether the lessor could claim depreciation on leased assets under a finance lease agreement. The appellant, Religare Finvest Ltd, had claimed depreciation of Rs. 12,65,90,130/- on assets acquired under a finance lease. The Assessing Officer disallowed this claim, arguing that the depreciation should be allowed only to the owner of the assets. However, the ITAT Delhi upheld the appellant’s claim, citing relevant provisions of AS-19 and Circular No. 2/2001 issued by the CBDT. According to AS-19 and the CBDT circular, the ...