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TMI BlogFinance Lease Agreements - Guidelines for investigation.X X X X Extracts X X X X X X X X Extracts X X X X ..... ce leasing agreements. The report of the Expert Group has been accepted by the Government. 2. Instances have come to notice of the Board that in some of the cases of finance lease agreements, the leased assets had never existed or purchase price for the leased assets came back to the lessor by discounting the lease rental either directly from the lessee or through circuitous route from intermedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer should critically examine the lease agreement and also the supporting documents like insurance papers or inspection reports and in the case of companies, the Board resolutions. While examining the agreements, the Assessing Officer should particularly examine the following aspects in order to establish the genuineness of transaction and the ownership of the assets : a)date of commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he asset at the end of the period of lease agreement and the option of the lessee to purchase the asset at the scrap value. ii) The Assessing Officer should make field enquiries to identify and verify about the existence of the leased assets. The transportation of the assets, the compliance of various provisions of law relating to the transfer of assets such as peyment of sales tax, goods tax, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a case applicability of Explanation 3 to section 43 should be examined. To determine the correct fair market value, if the need be, the valuation of the asset may be referred to the departmental valuer. vi) The Assessing Officer should invoke the provisions of Explanation 4A to section 43(1) in cases of a sale and lease back transaction, where the depreciation is allowed to the lessor at the W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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