{"id":6484,"date":"2013-03-26T16:31:35","date_gmt":"2013-03-26T11:01:35","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=6484"},"modified":"2013-03-26T16:31:35","modified_gmt":"2013-03-26T11:01:35","slug":"development-credit-bank-ltd-vs-dcit-itat-mumbai-s-32-special-bench-verdicts-on-sale-lease-back-lease-finance-are-not-good-law","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/development-credit-bank-ltd-vs-dcit-itat-mumbai-s-32-special-bench-verdicts-on-sale-lease-back-lease-finance-are-not-good-law\/","title":{"rendered":"Development Credit Bank Ltd vs. DCIT (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (Development_Credit_Bank_Lease_SLB_depreciation.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 32: Special Bench verdicts on Sale & Lease Back & lease finance are not good law
\n<\/strong><\/p>\n

The assessee, a Bank, bought assets from its customers and leased it back to them (\u201csale and lease back<\/em>\u201d). It also purchased assets identified by its customers and leased it to them (\u201cfinance lease<\/em>\u201d). The assessee claimed depreciation on the assets on the ground that it was the owner and had used the assets for business purposes. The AO, relying on MidEast Portfolio Management<\/strong> 87 ITD 537 (Mum) (SB) and IndusInd Bank<\/a><\/strong> 135 ITD 165 (Mum) (SB), disallowed depreciation on the ground that the transactions were an \u201ceyewash<\/em>\u201d and \u201ccolourable device<\/em>\u201d. The CIT(A) partly confirmed the disallowance. On appeal by the assessee to the Tribunal, HELD allowing the claim:<\/p>\n

The issue of whether the lessor is entitled to claim depreciation in the case of a \u201csale and lease back<\/em>\u201d transaction as well as in a \u201cfinance lease<\/em>\u201d have been laid to rest by the judgements in ICDS<\/a><\/strong> 350 ITR 527 (SC), Kotak Mahindra Finance<\/strong> 317 ITR 236 (Bom) and Cosmo Films<\/a><\/strong> 338 ITR 266 (Del) where it was held that the lessor is eligible to claim depreciation. The judgements of the Special Bench in MidEast Portfolio Management<\/strong> 87 ITD 537 (Mum) (SB) and IndusInd Bank<\/a><\/strong> 135 ITD 165 (Mum) (SB) are impliedly overruled.<\/p><\/blockquote>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The issue of whether the lessor is entitled to claim depreciation in the case of a \u201csale and lease back<\/em>\u201d transaction as well as in a \u201cfinance lease<\/em>\u201d have been laid to rest by the judgements in ICDS<\/a><\/strong> 350 ITR 527 (SC), Kotak Mahindra Finance<\/strong> 317 ITR 236 (Bom) and Cosmo Films<\/a><\/strong> 338 ITR 266 (Del) where it was held that the lessor is eligible to claim depreciation. The judgements of the Special Bench in MidEast Portfolio Management<\/strong> 87 ITD 537 (Mum) (SB) and IndusInd Bank<\/a><\/strong> 135 ITD 165 (Mum) (SB) are impliedly overruled.<\/p>\n

Read more ›<\/a><\/div>\n

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