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TMI Blog2013 (8) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... t : Shri Sanjay R. Shah A.R. For the Respondent : Shri D. P. Gupta, CIT D.R. ORDER Per Shri Anil Chaturvedi,A. M. 1. In this case the Assessee's appeal was disposed by Tribunal vide order dated 14.09.2012 (ITA No. 827/Ahd/2010) for A.Y. 2006-07. Against the aforesaid order of Tribunal, assessee filed Miscellaneous Application (MA) and the same was disposed vide M.A. No. 227/Ahd/2012 (order dated 22.02.2013) and the M.A of the Assessee was allowed. The relevant portion of M.A. reads as under:- 1.0 Before the Hon'ble ITATthe applicant had raised the following ground No.4. in its Appeal No. 827/A/2010: "In law and in the facts and circumstances of the appellant's case, the learned Commissioner of Income Tax(Appeals) has erred in confirming depreciation amounting to Rs. 7,93,490/- on the assets leased by the appellant to Western Railways. It is submitted that on the facts circumstances of the case, the CIT(A) ought to have allowed depreciation as claimed by the appellant. It is submitted that it be so held now." 2.0 The above ground was adjudicated by the Hon'ble Bench vide para 17 on page 13 of the order which is reproduced here under: "We have heard both the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate bench in case of applicant itself in earlier years after verifying the terms and conditions of the lease agreement and after considering the Supreme Court judgment held that it is operating lease and allowed the depreciation to the applicant i.e. lessor, how is it justifiable to send back the same issue to the file of the AO in subsequent year to re-adjudicate on the status of same lease agreement in respect of the same assets which are already merged in to the block of assets. 5.2 It is also untenable in law as well as in facts that in earlier years lessor claims depreciation on leased assets and in subsequent years lessee claims depreciation on same assets without any change in any of the terms and conditions of the lease agreement. In fact once depreciation is allowed to lessor in the earlier year, leased assets are already part of block of assets in that year and thereafter what is followed in subsequent year is only WDV of that asset which goes on reducing by granting depreciation on year to year basis. Changing the texture of the decision in- between the years can only create confusion and pose the difficulties in passing consequential order. 5.3 The above being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the issue in present appeal is identical to that of earlier years, following the decisions in the Assessee's own case of earlier years,the depreciation be allowed to the assessee. The learned D.R. on the other hand supported the order of Assessing Officer and CIT(A). 4. We have heard the rival submissions and perused the material on record. We find that for earlier assessment years one of the issue before the Co-ordinate bench of Tribunal was with respect to railway wagons. The issue in ITA No. 1463,1464,4007/A/2007 and 2400/A/2008 for assessment years 2000-01, 2003-04, 2004-05 and 2005-06 is as under:- 33. It was submitted before the Assessing Officer as under:- "The company has acquired the following assets as per details given below and the same has been given on lease; Assets particulars F.Y. Amount Rs. 1 Wagons 1995-96 93937200 2 Captive Power Plant 1999-00 312990556 3 Plant and machinery incinerator 1998-99 26333260 4 Plantand Machinery- SAT NOX unit 1998-99 54679889 During the year, the company earned the lease rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 143(3) of the Act in the case of assets leased to Western Railways. The wagons so leased were purchased by the assessee lessor. The wagons were identifiable and were having identification numbers. The primary period was for 10 years as per clause 2(iii). The lease charges will not be payable for a number of days the wagons remained unutilized. The lessee on behalf of the lessor will ensure the equipments. It was further argued by the learned counsel for the assessee that the assets so leased will return back to the lessor assessee and the lessee will not have any right. The assets so leased thereafter will be used by the assessee for its own purpose. The allegations made by the A.O. at pages 43 and 44 of his order are without any basis and had been written in the order of conjectures and surmises. Though the assets had been duly acquired on the specification of the lessee. It cannot be said that it will not be used for the purpose and use of the assessee i.e. the lessor. The insurance has been taken by the lessee on behalf of the lessor. It is not a finance lease since the period of lease does not start from the date of finance of the assets but at a later date. 34. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pments. The Tribunal reversed the order of the Revenue authorities, making following observation:- "35 We have heard the rival contentions and perused the facts of the case. As regards reliance on the decision of the Hon. Supreme Court in the case of Area Brown boveri Ltd. (supra) by the learned D.R. the arguments of the learned D.R. that the assessee had purchased the equipments for the economic life of the plant itself and not more than that. As a matter of fact, it is not a case, as is appearing from different clause of the lease deed that the equipments leased will be returned back to the lessor after the expiry of the lease. Nothing has been brought to disapprove the said clause of the lease deed by any of the authorities below or by the learned D.R. The learned DR could not prove that in fact the assessee is only a financier and is not interested in the assets and therefore, it cannot be said as full payout lease. Therefore, in the circumstances and facts of the case, the arguments made by the learned DR cannot be accepted and following the rule of consistency, the assessee deserves to be allowed the claim and we direct the Assessing Officer accordingly to allow the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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