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TMI Blog2015 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... cylinders by the assessee is concerned, this fact is not disputed. It is also not disputed that these gas cylinders were purchased for business purpose. In fact, the plea of the assessee that since manufacturing unit had not started functioning and this necessitated the assessee to lease out these gas cylinders to the aforesaid two parties to enable it to earn some income, rather than keeping those cylinders idle, is also not in dispute. On the contrary, as mentioned above, the income which is generated from leasing out those gas cylinders is treated as "business income". Once the income from leasing those gas cylinders is accepted as the "business income", which is taxed at the hands of the assessee as such, we see no reason how the depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses (P) Limited, Ghaziabad and M/s Malik Industries. filed by the assessee, he claimed depreciation on those gas cylinders at the rate of 100 per cent, as provided under the rules on the aforesaid item.The Assessing Officer, however, rejected the claim of depreciation on the ground that hiring business was not proved. It would be significant to state that the appeal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of depreciation. He is directed to allow the depreciation on cylinders as per rules. The aforesaid order of the CIT(Appeals) was set aside by the Income Tax Appellate Tribunal, and the order of the Income Tax Appellate Tribunal was upheld by the High Court. The High Court has concurred with the opinion of the Tribunal on the ground that the cylinders were not purchased for leasing business and one of the parties to whom the cylinders were leased out is the manufacture and seller of the cylinders. It is further 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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