PCIT Vs ALD Automotive Pvt Ltd (Bombay High Court)
The Bombay High Court held that the Revenue’s challenge to the ITAT’s order on depreciation claimed on vehicles given on operating lease did not give rise to any substantial question of law. The Court noted that the assessee had claimed depreciation on vehicles leased under operating lease agreements, asserting ownership under the Master Lease Agreements, while the Assessing Officer had disallowed the claim principally because the vehicles were registered in the customers’ names and the issue had been raised in earlier assessment years. The CIT(A) deleted the disallowance, and the ITAT affirmed that decision by following its earlier orders in the assessee’s own case and relying on the Supreme Court’s decision in I.C.D.S. Ltd. The High Court found the facts similar to the Supreme Court decision and declined to entertain Questions (A) to (C). However, it observed that the ITAT had failed to decide the Revenue’s ground relating to deletion of disallowance of deferred maintenance charges of Rs.1,14,48,078/-. Accordingly, the matter was remanded to the ITAT only for the limited purpose of deciding that additional ground.
Core Issue. The principal issue before the Bombay High Court was whether the assessee, engaged in the business of leasing vehicles under operating lease arrangements, was entitled to depreciation under section 32 despite the registration certificates of the vehicles standing in the names of the lessees, and whether the Tribunal’s failure to adjudicate the Revenue’s ground relating to deferred maintenance charges warranted remand.
