2015 (4) TMI 20

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..... ananda, Adv. Ms. Anil Katiyar, Adv. ORDER This appeal relates to the assessment year 1986-87. The issue pertains to depreciation on the 1250 gas cylinders which the assessee had claimed in that year, and which has been disallowed by the authorities below. The brief facts which require mention for the purpose of the present appeal are as under: The appellant-assessee had set up its unit some t .....

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..... filed by the assessee before the Commissioner of Income Tax (Appeals) was accepted on the ground that the income received from leasing the aforesaid equipments would be treated as business income and on that basis he allowed the depreciation. Relevant portion of the order of the CIT(Appeals) reads as under: "22. As per the facts, there is no doubt that the assessee purchased the cylinders durin .....

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..... em and he has no right to direct the lessee to put them to use in a particular manner or fashion. If according to the lease agreements the lessee pays the lease amount to the lessor, whether he actually uses the cylinders or not it is his outlook and not the botheration of the lessor. Thus, since, the cylinders were despatched to the lessee by the appellant, in this accounting year and he had rece .....

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..... r stated that the cylinders were dispatched to the other party only a day before the closing of the accounting period.The aforesaid reasons given by the Income Tax Appellate Tribunal and the High Court in denying the depreciation do not appear to be valid reasons in law. Insofar as the purchase of gas cylinders by the assessee is concerned, this fact is not disputed. It is also not disputed that t .....

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..... would clearly demonstrate that the assessee has proved ownership of these gas cylinders and use of these gas cylinders for business purpose. Once these ingredients are proved, the assessee was entitled to depreciation under Section 32 of the Income Tax Act. We, therefore, set aside the judgment of the High Court, and hold that the assessee would be entitled to depreciation as claimed for the asses .....

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