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TMI Blog2013 (6) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ] assessee satisfied the condition that it must use the asset for the purposes of business. It does not mandate usage of the asset by the assessee itself. As long as the asset is utilized for the purpose of business of the assessee, the requirement of Section 32 would stand satisfied. In favour of assessee. - ITA No.158 of 2002 (O&M), CWP No. 12373 of 2003 (O&M), CWP No. 12374 of 2003 (O&M), CWP No. 12375 of 2003 (O&M), CWP No. 17776 of 2002 (O&M), ITA No. 158 of 2002 - - - Dated:- 13-5-2013 - Hemant Gupta And Ritu Bahri,JJ. For the Appellant : Mr. Rohit Sud, Advocate For the Respondent : Mr. Vivek Sethi, Advocate ORDER Hemant Gupta, J. (Oral) This order shall dispose of aforementioned cases i.e I.T.A No.158 of 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the Hon'ble Tribunal and the authorities below are not justified in not adjudicating on the issue of taxing only the interest income in the hands of the appellant and not then total amount of realisation as lease rental which have the component of capital receipt also? The aforesaid questions of law in the present appeal arise out of the fact that the assessee has filed its return of income from the business of hire purchase financing of vehicles etc. The assessee claimed that the vehicles i.e trucks were given on lease, therefore, the same are assets for the business of the assessee and, thus, the assessee is entitled to depreciation. The Assessing Officer found that the assessee was not doing leasing business at all. After dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed. Considering the another clause of the agreement that lessee would be entitled to full depreciation in case of theft and loss of vehicle, it was held that the assessee is in the business of financing and not leasing. In view of the said findings, the assessee has claimed the aforesaid questions of law. In a recent judgment reported as I.C.D.S Ltd. vs. Commissioner of Income Tax, (2013) 3 SCC 541, the Hon'ble Supreme Court has examined the question as to whether the assessee is owner of the vehicle, which are leased out and is entitled to depreciation on the vehicles leased out by him on the ground that they were hired out to customers. It was held after examining the definition of 'Owner' given in the Motor Vehicle Act, 1988 that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of business. xxx xxx xxx 25. The general opening words of the Section say that the owner of a motor vehicle is the one in whose name it is registered, which, in the present case, is the lessee. The subsequent specific statement on leasing agreements states that in respect of a vehicle given on lease, the lessee who is in possession shall be the owner. The Revenue thus, argued that in case of ownership of vehicles, the test of ownership is the registration and certification. Since the certificates were in the name of the lessee, they would be the legal owners of the vehicles and the ones entitled to claim depreciation. Therefore, the general and specific statements on ownership construe ownership in favour of the lessee, and hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claimed depreciation on the vehicles, which, as specifically recorded in the order of the Appellate Tribunal, was not done. It would be a strange situation to have no claim of depreciation in case of a particular depreciable asset due to a vacuum of ownership. As afore-noted, the entire lease rent received by the assessee is assessed as business income in its hands and the entire lease rent paid by the lessee has been treated as deductible revenue expenditure in the hands of the lessee. This reaffirms the position that the assessee is in fact the owner of the vehicle, in so far as Section 32 of the Act is concerned. xxx xxx xxx 29. Therefore, in the facts of the present case, we hold that the lessor i.e. the assessee is the owner of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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