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TMI Blog2013 (8) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... e in respect of the vehicles which were registered in the names of the purchasers and financed by the assessee under a hire purchase agreement?. 2.Whether on the facts and circumstances of the case the learned Income Tax Appellate Tribunal, was right in arriving at the conclusion that the assessee company was entitled to claim depreciation at the rate of 40%?" 3. Learned counsel for respondent/assessee raised an objection that appeal was admitted ex-parte, without hearing him and in view of sub-section (4) of Section 260A of the Income Tax Act, 1961, he has a right to submit that none of the questions, mentioned above, is involved in the present appeal. He submitted that present appeal was relating to lessor and lessee. The respondent-ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Tribunal, it is clear that question relating to allowability of the depreciation under Section 32(1) of the Act is involved in the present case and not the question of hire-purchase. Learned counsel for appellant has fairly submitted that question involved in the present case be reframed. 8. After considering submissions of learned counsel for the parties and as agreed by them, we modify the order dated 29th July, 2003 and substitute/reframe the following substantial question of law in place of two questions framed in the order dated 29/7/2003 :- "Whether respondent/assessee is entitled to get benefit of depreciation under Section 32 (1) of the Income Tax Act, 1961 or not?". 9. The facts of the case are not in dispute between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic limited company, classified by Reserve Bank of India (RBI) as a nonbanking finance company. It was engaged in the business of hire purchase, leasing and real estate etc. The vehicles, on which depreciation was claimed, are stated to have been purchased by the assessee against direct payment to the manufacturers. The assessee, as a part of its business, leased out these vehicles to its customers and thereafter, had no physical affiliation with the vehicles. In fact, lessees were registered owners of the vehicles, in the certificate of registration issued under the Motor Vehicles Act, 1988 (hereinafter referred to as "the MV Act"). The assessee claimed depreciation, which was disallowed by Assessing Officer on the ground that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Apex Court is reproduced, as under :- "For the foregoing reasons, in our opinion, the High Court erred in law in reversing the decision of the Tribunal. Consequently, the appeals are allowed; the impugned judgments are set aside and the substantial questions of law framed by the High Court, extracted in para 8 (supra), are answered in favour of the assessee and against the Revenue. There will, however, be no order as to costs". 15. It is also relevant to mention that the Hon'ble Apex Court has considered two submissions of Revenue regarding owner of the vehicle and use of the vehicle in the course of its business and both the submissions were negatived by the Hon'ble Apex Court. Para 15 and 16 of the judgment are repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Apex Court also considered that the lessor is owner of the Vehicle. Section 2(30) of the Motor Vehicles Act was also considered for the purpose of registered owner of the vehicle. Relevant paragraphs i.e. paras 23, 27, 29 and 31 are also reproduced, as under:- 23. A scrutiny of the material facts at hand raises a presumption of ownership in favour of the assessee. The vehicle, along with its keys, was delivered to the assessee upon which, the lease agreement was entered into by the assessee with the customer. Moreover, the relevant clauses of the agreement between the assessee and the customer specifically provided that: (i) The assessee was the exclusive owner of the vehicle at all points of time; (ii) If the lessee committed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip in favour of the lessee, and hence, are in favour of the Revenue. 29. Finally, the learned Senior Counsel appearing on behalf of the assessee also pointed out a larger number of cases, accepted and unchallenged by the Revenue, wherein the lessor has been held as the owner of an asset in a lease agreement. [CIT v. A.M. Constructions, CIT v. Bansal Credits Ltd., CIT v. M.G.F. (India) Ltd., CIT v. Annamalai Finance Ltd.] In each of these cases, the leasing company was held to be the owner of the asset, and accordingly held entitled to claim depreciation and also at the higher rate applicable on the asset hired out. We are in complete agreement with these decisions on the said point. 31. Therefore, in the fact of the present case, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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