Held that for the requirements of depreciation allowance under section 32 of the Act, the conditions to be satisfied are, the assessee must be owner of the asset and the asset must be used for the purposes of business or profession. The assessee as lessor, was the absolute owner of the assets leased under finance lease and the lessee had only the right to use the vehicles. The lessee could not create any charge or encumbrance on the vehicle at any time or object to inspection of the vehicles by the lessor. At the conclusion of the lease period, the lessee was obliged to return the vehicle to the lessor and if the lessor terminated the leasing of any vehicle due to the default of the lessee, the lessee had immediately to surrender the vehicle to the lessor. The lease of vehicles under the finance lease was part and parcel of its business and the income therefrom had been offered to tax under the head “Profits and gains from business or profession”. Therefore, the conditions contained in section 32 of the Act were met and the allowance of depreciation on assets leased under finance lease was neither erroneous nor prejudicial to the interests of the Revenue. Held that for the assessment years 2016-17, 2018-19 and 2019-20, no adjustment had been made with respect to excess interest spread nor recognised as income in these respective years. Further, the Principal Commissioner himself had noted referring to RBI guidelines that “the gain on assignment was required to be recognised over the tenure of the loan, hence, from the assessment year 2012-13 the company had stopped to recognise the same only when redeemed in cash.” Thus, when the excess interest spread income had been offered in the subsequent years as and when it was received, there was no prejudice caused to the interests of the Revenue and the order could not be held to be erroneous. (AY.2017-18)