Despite Tax Avoidance, 100 Per cent Depreciation on Sale and Lease Back Allowable – Delhi High Court

CIT vs. Cosmo Films Ltd (Delhi High Court) –   High Court observed that if the sale and lease back agreement between the assessee and the OSEB indicate that the assessee had purchased the plant and machinery from OSEB for a price and had leased out the same to OSEB on lease rent, the revenue department cannot  discard the said sale and lease back agreement on the ground that the underlying motive of the assessee to enter into the said transaction was to reduce its income-tax liability. The Orissa High Court observed that the revenue could, however, discard the said transaction only if ...