ASSTT. CIT , CIRCLE-3(3)(1), MUMBAI V. M/S RELIANCE CORPORATIO IT PARK LTD., NAVI MUMBAI

ITA 1893/MUM/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9064 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 01-11-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Revision of order; Depreciation; Revenue expenditure
• Section: 32; 263; 143(3); 115JB; 250; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA Nos. 1893 & 1894/Mum/2020 (A.Ys: 2013-14 & 2014-15) ACIT, Circle -3(3)(1) Room No. 609, 6 th Floor, Aayakar Bhavan, MK Road, Mumbai – 400 020. Vs. M/s Reliance Corporate IT Park Ltd Bldg. No. 45, TTC Indl. Area, Thane-Belapur Road, Rabale, Navi Mumbai – 400701. सं./ज आइआर सं./PAN/GIR No. : AABCD7169H Appellant .. Respondent Appellant by : Mrs.Mamta Bansal. CIT DR Respondent by : Mr. Nimesh Vora.C A .AR Date of Hearing 24.01.2022 Date of Pronouncement 17.02.2022 आद श / O R D E R PER PAVAN KUMAR GADALE JM: These are the appeals filed by the revenue against the separate orders of Commissioner of Income Tax (Appeals)-8, Mumbai, passed u/s 143(3) and 250 of the Income Tax Act. Since the issues involved in these appeals are identical and similar, hence they are clubbed, heard and consolidated order is passed. ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 2 - For the sake convenience, we shall take up the revenue appeal in ITA No.1893/Mum/2020 for the A.Y 2013-14 as a lead case and the facts narrated therein. The revenue has raised the following grounds of appeal: 1) Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the disallowance of Rs.21,33,99,431/- on account of Depreciation on Assets (Finance Lease) without appreciating that in finance lease, all the risks and rewards incidental to ownership of an asset is transferred to the lessee and the lessor cannot claim depreciation on the leased plant and machinery citing the reason that the lessee has not claimed depreciation on the leased plant & machinery? 2) Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the disallowance of Rs.21,33,99,431/- on account of Depreciation on Assets (Finance Lease) without appreciating that AS-19 allows the lessee to claim depreciation on the asset and not the lessor, in case of Finance Lease? 3) The appellant prays that the order of the CIT(A) on the above grounds be set-aside and that of the Assessing Officer. 4) The appellant craves leave to amend, alter, delete or add grounds which may be necessary. 2. The brief facts of the case the assessee company is engaged in the business of providing infrastructure support services. The assessee has filed the return of income electronically on 29.11.2013 for the A.Y 2013-14 declaring a total loss of Rs. 120,57,37,408/- and the book profits calculated u/s 115JB of the Act of Rs. Nil. The case was selected for scrutiny and notice u/s 143(2) and ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 3 - 142(1) of the Act are issued. In response to the notice, the Ld. AR of the assessee appeared from time to time and filed the relevant details. The Assessing officer (A.O.) find that the assessee company has specific domestic transactions reported in form No.3CEB and the matter was referred to the TPO for the determination of arm’s length price (ALP). Whereas the TPO has passed the order u/s 92 CA(3) of the Act on 26.10.2016 accepting the ALP determined by the assessee. The A.O found that the assessee has given on lease its polymer plant unit at thane to Reliance Industries ltd (Lessee) and observed that the assessee company has added back an amount of Rs.36,36,60,304/-being finance lease receipt in computation of total income and the assessee has claimed deduction of the lease rent of Rs.16,19,38,715/.- The A.O has called for the explanations as to whether the assessee has claimed the depreciation on the plant and machinery given on lease and the lease value of the machinery was reduced from the block of assets. Whereas, the assessee has filed the details/explanations on 12.09.2016 referred at Para 6.2 of the assessment order. But, the A.O has not accepted the submissions of the assessee and dealt on the disputed issue as in the earlier A.Y 2011-12 and 2012-13 at Para 6.3 of the order. Finally the A.O has considered the written down value ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 4 - (WDV) of the plant and machinery as on 01.04.2012 and computed the depreciation on leased Assets provided to Reliance Industries Ltd @ 15% and made addition of depreciation on assets being financial lease and assessed the total Loss of Rs. 99,23,37,977/- and passed the order u/s 143(3) of the Act on 27.12.2016. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas, the CIT(A) considered the grounds of appeal, submissions of the assessee and the findings of the A.O and observed at Para 5.1 that on the similar issue for the earlier assessment year the Hon’ble Tribunal has granted the relief and dealt on the ratio of the decision and directed the Assessing officer to delete the addition and allowed the assessee’s appeal. Aggrieved by the CIT(A) order, the revenue has filed an appeal before the Honble Tribunal. 4. At the time of hearing, the Ld. DR submitted that the CIT(A) has erred in deleting the disallowance of depreciation on plant and machinery lease out as per the agreement without considering the various facts and provisions. Further, the revenue has not accepted the decision of the Honble Tribunal and the matter is being contested. ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 5 - 5. Contra, the Ld. AR supported the order of the CIT(A) and relied on the Honble Tribunal decision for the A.Y 2013-14 and prayed for dismissal of the Revenue appeal. 6. We heard the rival submissions and perused the material on record. The sole disputed issue envisaged by the Ld. DR that the CIT(A) has erred in granting the relief to the assessee, irrespective of the fact that the decision of the Hon’ble Tribunal is being challenged by the revenue before the Higher Forums. At this juncture, we considered it appropriate to consider the observations of the Hon’ble Tribunal in ITA No. 4717&4873/Mum/2017 for the A.Y 2011-12 at page 28 to 40 Para 16 to 21, which is read as under: 16. We have beard both parties, perused the material available on record and gone through the orders of authorities below. The assessee had entered in to lease agreement with M/s Reliance Industries Ltd. and leased out Polymer Plant located at 5, TTC Industrial area, Ghansali, Thane, Belapur road, Navi Mumbai. As per lease agreement dated 31/12/2008, the assessee has used said asset for more than five years before the same was leased out to Reliance Industries Ltd. As per lease and licence agreement between assessee and Reliance Industries Ltd. more particularly clause 2, 3, 4, 5 and 8, during the subsistence of the lease agreement, the ownership of the asset rest with the assessee. In the said agreement, it was clearly mentioned that the lessor is the owner of the plant and machinery which the lessee has agreed and acknowledged. It was further stated that ownership of the plant and machinery and equipment at all times remained with the assessee and the lessor only agree to ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 6 - transfer right to use the plant and machinery by way of lease to the assessee. A perusal of the lease agreement put on record clearly proves the ownership of the lessor and at the end of the lease period, as per clause-3 of the lease agreement, the machineries and equipment would be transferred by lessor to the lessee, therefore, till subsistence of lease period i.e. ten years, the lessor is undisputedly owner of the asset. 17. The Ld. AO has disallowed depreciation claim merely on the ground that as per AS-19 issued by ICAI, in finance lease the risk and rewards incidental to ownership to the asset transferred to the assessee. The A.O further observed that a careful reading of AS-19 reveal that in finance lease, the lease term will be for the major part of economic life of the asset even if till is not transferred and generally the leased asset is of specialized nature such this only the lessee can use it without major modifications being made, Therefore , he came to the conclusion that in finance lease whether or not the lessor claimed :depreciation on leased assets, but the lessee is entitled to claim depreciation. The :0 further noted that the accounting treatment of the assessee in its books of accounts as also supports the case of the Revenue that the assessee has reduced entire vlue of plant and machinery from the computation of depreciation as per Companies Act. Therefore, it is abundantly clear that no depreciation relating to the plant arid machinery given on lease has been debited in the books of accounts. However, the assessee has claimed depreciation in the statement of total income as per Act and also offered total lease rental received including lease rental on account i f principal portion to taxation to argue that it is entitled for depreciation. The assessee has filed a confirmation from the lessee and stated that lessee did not claim the precaution on plant and machinery, because the ownership of the asset is not truant , erred to the lessee during subsistence of lease period. Accordingly, the assessee€ argued that particular mode of recording the transactions in books is of no sequence, but what is relevant is nature of the transactions which to be considered to arrive at proper conclusion. The assessee has also referred circular No. 2 of 2001 of CBDT, where ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 7 - it was mentioned that the method prescribed in AS-19 per se will not effect the claim of depreciation in the hands of the owner of the assets and the depreciation on assets will be guided by ownership of the asset and use of assets for the purpose of business. As regards the location of the asset, the physical shifting of the relevant plant and machinery from its present location to the location of the lessee was carried out for better utilisation of the asset in the business which has been leased out, otherwise the AO has never disputed the fact of the ownership of the asset i.e. remains with the assessee and also use of such asset is in the business of the assessee. 18. The fact with regard to claim of depreciation by the assessee for earlier two years is not disputed by the revenue. In fact, even after lease from 31/12/2008, the assessee continued to claim depreciation on leased asset for AY 2009-10 and 201011 and same has been allowed in assessment under section 143(3) of the Act, for AY- 2010-11. Although, the -Id CIT(A) invoked provisional jurisdiction u/s 263 of the Act to withdraw depreciation claimed on leased asset, the Tribunal has quashed 263 proceedings in No,2748/Mum/2015, where it was observed that the ownership of the asset has not been passed on to the lessee during the period of lease. The Tribunal further observed that the assessee had also filed a copy of confirmation from the lessee wherein it has been stated that the lessee has not claimed depreciation on the leased plant and machinery and this fact has not been rebutted by the revenue. We further note that having accepted claim of depreciation in earlier years, there is no reason for the revenue to deviate from the issue for subsequent years, even though there is no change in facts for the subsequent years in case of depreciation on leased asset. Further, on a conjoint reading of section 32(1)(iii) r.w,s. 43(6)(c) of the Act makes it clear that entitlement of ass t eligible for depreciation has to be examined in year one but not in subsequent yea. Since, the Revenue has allowed depreciation claimed for earlier years, the same cannot be denied in the assessment year 2011-12 unless there is change in facts. We further noted that the assessee has Offered to tax total lease rental of Rs.36.4 crors as business ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 8 - income, even though, it has considered a sum of Rs.19.5 crores n its books of account by following AS-19 issued by the Department. When the department has accepted the income offered for taxation, it cannot be turnaround t( deny depreciation only for the reason that in finance lease, the ownership of the asset was transferred to the lessee. Although, AS- 19 issued by ICAP is required to be followed mandatorily for preparation of financial statements, but when it comes to taxation of income, what is relevant is the provision of the Act which deals with taxability of income, but not guideline issued by the ICAL This fact has been further reiterated y CBDT vide its Circular No.2 dated 09/02/2001, where it was clarified that AS-19 Nill not have any implication on allowance of depreciation on assets under the revisions of the Income Tax Act. Further, the assessee has also filled a confirmation from the lessee, where it was stated that lessee did not claim depreciation on lessee asset. From the above facts, it is very clear that the assessee is continued to be owner of the asset even after the lease. Further entries in books of account is not determinative for deciding the nature of income which is assessable under the Act, what is relevant is statute as per which ownership of an asset is must for claiming depreciation and in this case, there is no doubt of whatsoever with regard to ownership which is clearly evident from the lease agreement and accordingly we are of the considered view that the assessee is rightly claimed depreciation on leased asset under the Income Tax Act. 19. Coming back to the case laws relied upon by the assessee. The assessee has relied upon the decision of Hon'ble Supreme Court in the case of ICDS vs CIT(supra). We find that Hon'ble Supreme Court had considered an issue of depreciation in case of leased asset, where it was held that in case of lease transaction, the leasing company was held to be owner of the asset and accordingly entitled to claim depreciation, the relevant findings of the Court are asunder:- 19. We may now advert to the first requirement i.e. the issue of ownership. No depreciation allowance is granted in respect of any capital expenditure which the assessee may be obliged to incur on the property of others. Therefore, the entire case hinges ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 9 - on the question of ownership; if the assessee is the owner of the vehicles, then he will be entitled to the claim on depreciation, otherwise, not. 20. In Mysore Minerals Ltd., M.G. Road, Bangalore Vs. Commissioners of Income Tax, Karnataka, Bangalore[3], this Court said thus: “...authorities shows that the very concept the depreciation suggests that the tax benefit on account of depreciation legitimately belongs to one who has invested in the capital asset is utilizing the capital asset and thereby losing gradually investment caused by wear and tear, and would need to replace the same by having lost its value fully over a period of time.” 21. Black’s Law Dictionary (6th Edn.) defines 'owner' as under: “Owner. The person in whom is vested the ownership, dominion, or title of property; proprietor. He who has dominion of a thing, real or personal, corporeal or incorporeal, which he has a right of enjoy and do with as he pleases, even to spoil or destroy it, as far as the law permits, unless he be prevented by some agreement or covenant which restrains his right. The term is, however, a nomen generalissimum, and its meaning is to be gathered from the connection in which it is used, and from the subject- matter to which it is applied. The primary meaning of the word as applied to land is one who owns the fee and who has the right to dispose of the property, but the terms also included one having a possessory right to land or the person occupying or cultivating it. The term "owner" is used to indicate a person in whom one or more interests are vested his own benefit. The person in whom the interests are vested has ‘title’ to the interests whether he holds them for his own benefit or the benefit of another. Thus the term “title” unlike “owner”..” It defines the term 'ownership' as – "Collection of right to use and enjoy property, including right to transmit it to others.... The right of one or more persons to possess or use a thing to the exclusion of others. The right by which a thing belongs to some one in particular, to the exclusion of all other persons. The exclusive right of possession, enjoyment or disposal; involving as an essential attribute the right to control, handle, and dispose." The same dictionary defines the term “own” as ‘To have a good legal title’. ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 10 - These definitions essentially make ownership a function of legal right or title against the rest of the world. However, as seen above, it is “nomen generalissimum, and its meaning is to be gathered from the connection in which it is used, and from the subject-matter to which it is applied.” 22. A scrutiny of the material facts at hand raises a presumption of ownership in favour of the assessee. The vehicle, along with its keys, was delivered to the assessee upon which, the lease agreement was entered into by the assessee with the customer. Moreover, the relevant clauses of the agreement between the assessee and the customer specifically provided that: (i) The assessee was the exclusive owner of the vehicle at all points of time; (ii) If the lessee committed a default, the assessee was empowered to re-possess the vehicle (and not merely recover money from the customer); iii) At the conclusion of the lease period, the lessee was obliged to return the vehicle to the assessee; iv) The assessee had the right of inspection of the vehicle at all times. For the sake of ready reference, the relevant clauses of the lease agreement are extracted hereunder:- “2. Lease Rent The lessee shall, during the period of lease punctually pay to the lessor free of any deduction whatsoever as rent for the assets the sum of moneys specified in the Schedule ‘B’ hereto. All rents shall be paid at the address of the Lessor shown above or as otherwise directed by the Lessor in writing. The rent shown in Schedule ‘B’ shall be paid month on 1st day of each month and the first rent shall be paid on execution thereof. 4. Ownership The assets shall at all times remain the sole and exclusive property of the lessor and the lessee shall have no right, title or interest to mortgage, hypothecate or sell the same as bailee 9. Inspection The Lessor shall have the right at all reasonable time to enter upon any premises where the assets is believed to be kept and inspect and/or test the equipment and/or observe its use. 18. Default If the lessee shall make default in payment of moneys or rent payable under the provisions of this agreement, ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 11 - the Lessee shall pay to the Lessor on the sum or sums in arrears compensation at the rate of 3% per month until payment thereof, such compensation to run from the day to day without prejudice to the lessor’s rights under any terms, conditions and agreements herein expressed or implied. All costs incurred by the Lessor in obtaining payment of such arrears or in endeavoring to trace the whereabouts of the equipments or in obtaining or endeavouring to obtain possession thereof whether by action, suit or otherwise, shall be recoverable from the lessee in addition to and without prejudice to the lessors right for breach of this lease. 19. Expiration of Lease: Upon the expiration of this Lease, the Lessee shall deliver to the Lessor the assets at such place as the Lessor may specify in good repair, condition and working order. As soon as the return of the asset the Lessor shall refund the amount of security deposit. If the lessee fails to deliver the equipment to the Lessor in accordance with any direction given by the Lessor, the Lessee shall be deemed to be the tenant of the assets at the same rental and upon the same terms herein expressed and such tenancy may be terminated by the Lessor immediately upon default by the lessee hereunder or upon 7 days notice previously given..” 23. The Revenue’s objection to the claim of the assessee is founded on the lease agreement. It argued that at the end of the lease period, the ownership of the vehicle is transferred to the lessee at a nominal value not exceeding 1% of the original cost of the vehicle, making the assessee in effect a financer. However we are not persuaded to agree with the Revenue. As long as the assessee has a right to retain the legal title of the vehicle against the rest of the world, it would be the owner of the vehicle in the eyes of law. A scrutiny of the sale agreement cannot be the basis of raising question against the ownership of the vehicle. The clues qua ownership lie in the lease agreement itself, which clearly point in favour of the assessee. We agree with the following observations of the Tribunal in this regard: “20. It is evident from the above that after the lessee takes possession of the vehicle under a lease deed from the appellant- company it (sic.) shall be paying lease rent as prescribed in the schedule. The ownership of the vehicles would vest with the appellant-company viz., ICDS as per clause (4) of the agreement of lease. As per clause (9) of the Lease agreement, M/s. ICDS is having right of inspection at any time it wants. As per clause ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 12 - (18) of the Lease agreement, in case of default of lease rent, in addition to expenses, interest etc. the appellant company is entitled to take possession of the vehicle that was leased out. Finally, as per clause (19), on the expiry of the lease tenure, the lessee should return the vehicle to the appellant company in working order. 21. It is true that a lease of goods or rental or hiring agreement is a contract under which one party for reward allows another the use of goods. A lease may be for a specified period or in perpetuity. A lease differs from a hire purchase agreement in that lessee or hirer, is not given an option to purchase the goods. A hiring agreement or lease unlike a hire purchase agreement is a contract of bailment, plain and simple with no element of sale inherent. A bailment has been defined in S.148 of the Indian Contract Act, as “the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. 22. From the above discussion, it is clear that the transactions occurring in the business of the assessee-appellant are leases under agreement, but not hire purchase transactions. In fact, they are transactions of ‘hire’. Even viewed from the angle of the author of ‘Lease Financing and Hire Purchase’, the views of whom were discussed in pages 16 and 17 of this order, the transactions involved in the appellant business are nothing but lease transactions. 23. As far as the factual portion is concerned now we could come to a conclusion that leasing of vehicles is nothing but hiring of vehicles. These two aspects are one and the same. However, we shall discuss the case law cited by both the parties on the point.” 24. The only hindrance to the claim of the assessee, which is also the lynchpin of the case of the Revenue, is Section 2(30) of the MV Act, which defines ownership as follows: - ““owner” means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of a hypothecation, the person in possession of the vehicle under that agreement.” ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 13 - 25. The general opening words of the Section say that the owner of a motor vehicle is the one in whose name it is registered, which, in the present case, is the lessee. The subsequent specific statement on leasing agreements states that in respect of a vehicle given on lease, the lessee who is in possession shall be the owner. The Revenue thus, argued that in case of ownership of vehicles, the test of ownership is the registration and certification. Since the certificates were in the name of the lessee, they would be the legal owners of the vehicles and the ones entitled to claim depreciation. Therefore, the general and specific statements on ownership construe ownership in favour of the lessee, and hence, are in favour of the Revenue. 26. We do not find merit in the Revenue’s argument for more than one reason: (i) Section 2(30) is a deeming provision that creates a legal fiction of ownership in favour of lessee only for the purpose of the MV Act. It defines ownership for the subsequent provisions of the MV Act, not for the purpose of law in general. It serves more as a guide to what terms in the MV Act mean. Therefore, if the MV Act at any point uses the term owner in any Section, it means the one in whose name the vehicle is registered and in the case of a lease agreement, the lessee. That is all. It is not a statement of law on ownership in general. Perhaps, the repository of a general statement of law on ownership may be the Sale of Goods Act; (ii) Section 2(30) of the MV Act must be read in consonance with sub-sections (4) and (5) of Section 51 of the MV Act, which were referred to by Mr. S. Ganesh, learned senior counsel for the assessee. The provisions read as follows: - “(4) No entry regarding the transfer of ownership of any motor vehicle which is held under the said agreement shall be made in the certificate of registration except with the written consent of the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into the said agreement. (5) Where the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into the said agreement, satisfies the registering authority that he has taken possession of the vehicle from the registered owner owing to the default of the registered owner under the provisions of the said agreement and that the registered owner refuses to deliver the certificate of registration or has absconded, such authority may, after giving the registered owner an opportunity to make such representation as ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 14 - he may wish to make (by sending to him a notice by registered post acknowledgment due at his address entered in the certificate of registration) and notwithstanding that the certificate of registration is not produced before it, cancel the certificate and issue a fresh certificate of registration in the name of the person with whom the registered owner has entered into the said agreement: Provided that a fresh certificate of registration shall not be issued in respect of a motor vehicle, unless such person pays the prescribed fee: Provided further that a fresh certificate of registration issued in respect of a motor vehicle, other than a transport vehicle, shall be valid only for the remaining period for which the certificate cancelled under this sub-section would have been in force.” Therefore, the MV Act mandates that during the period of lease, the vehicle be registered, in the certificate of registration, in the name of the lessee and, on conclusion of the lease period, the vehicle be registered in the name of lessor as owner. The Section leaves no choice to the lessor but to allow the vehicle to be registered in the name of the lessee Thus, no inference can be drawn from the registration certificate as to ownership of the legal title of the vehicle; and (iii) if the lessee was in fact the owner, he would have claimed depreciation on the vehicles, which, as specifically recorded in the order of the Appellate Tribunal, was not done. It would be a strange situation to have no claim of depreciation in case of a particular depreciable asset due to a vacuum of ownership. As afore- noted, the entire lease rent received by the assessee is assessed as business income in its hands and the entire lease rent paid by the lessee has been treated as deductible revenue expenditure in the hands of the lessee. This reaffirms the position that the assessee is in fact the owner of the vehicle, in so far as Section 32 of the Act is concerned. 27. Finally, learned senior counsel appearing on behalf of the assessee also pointed out a large number of cases, accepted and unchallenged by the Revenue, wherein the lessor has been held as the owner of an asset in a lease agreement. [Commissioner of Income-Tax Vs. A.M. Constructions[4]; Commissioner of Income- Tax Vs. Bansal Credits Ltd.[5]; Commissioner of Income-Tax Vs. M.G.F. (India) Ltd.[6]; Commissioner of Income-Tax Vs. Annamalai Finance Ltd.[7]]. In each of these cases, the leasing company was held to be the owner of the asset, and accordingly held entitled to claim depreciation and also at the higher rate ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 15 - applicable on the asset hired out. We are in complete agreement with these decisions on the said point. 20. The assessee has relied on the decision of ITAT I Delhi in the case of Corporation Ltd. vs ACIT(2016) 69 FIVIC 317(Del Trib). We find that the Tribunal has considered identical issue in light i f AS-19 issued by ICAI and held that AS-19 on accounting of lease issued by-'.Al only applicable for the accounting lease transactions in the books of account. We further noted that it is settled law that treatment in the books of account I not determinative of liability towards income tax and the liability Under the Act is go earned by the provisions of the Act. A similar view has been considered by ITAT Delhi Bench in the case of Bharti Hexacom Ltd Vs. ACIT (2016) 68 TMC 357(DeI Trib), where it was held that merely because assessee in books of accounts had given some treatment to the transaction, the claim of the revenue expenditure are on account of lease rental paid including depreciation on the asset treating the whole transaction as capital in nature could not disentitled the assessee's claim in computation of Income on the basis of true nature of the transactions. 21. Coming back to the case laws relied by the Ld DR. The Ld DR has also relied upon the decision of the Hon'b!e Delhi High Court in the case of Industrial Financial Corporation of India vs CIT(supra), we find that fact of the case relied upon by the Ld AO is supports the case of the assessee, where it was categorically held that in order to claim depreciation ownership of an asset must be with the person to who claim depreciation. The Hon'ble Court in that case, after considering the facts that the assessee is not owner of the asset held that ownership of asset must for claiming depreciation. In this case, on perusal of facts available on record, we find that the assessee is continued to have ownership of the asset even after leave and license agreement with Reliance Industries Ltd and the assessee has claimed depreciation for earlier two ears. In fact, it has been accepted by ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 16 - the department in assessment proceedings. The assessee further explained that the lessee did not claim depreciation on the leased asset. Therefore, considering over all acts of this case and also by following the ratio of the Hon’ble Supreme Court in the case of ICDS Vs. CIT (supra), we are of the considered view that the assessee is entitled for depreciation on the leased asset as per provisions section 32(1)(ii) of the Act. The Ld CIT(A) after considering relevant facts has righ t ly deleted additions made by the AO towards disallowance of depreciation, hence we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the revenue. 7. The Ld. DR could not controvert the findings of the CIT(A) with any new cogent material or information. whereas the CIT(A) has considered the provisions of law, facts of the case, judicial decisions and the assessee’s own case for the A.Y 2011-12 and granted relief. We respectfully fallow the judicial precedence. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue. 8. In the result, the appeal filed by the revenue is dismissed. ITA No 1894/Mum/2020, A.Y 2014-15 09. As the facts and circumstances in this appeal are identical to ITA No. 1893/Mum/2020, for A.Y. 2013-14, the decision rendered in above paragraphs ITA No. 1893&1894/Mum/2020 Reliance Corporate I T Park Ltd. Mumbai. - 17 - would apply mutatis mutandis for this case also. Accordingly, the grounds of appeal are dismissed. 10. In the result, both the appeals filed by the revenue are dismissed. Order pronounced in the open court on 17.02.2022. Sd/- Sd/- ( PRAMOD KUMAR) (PAVAN KUMAR GADALE) VICE PRESIDENT JUDICIAL MEMBER Mumbai, Dated 17.02.2022 KRK, PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. सं ं आ र आ / The CIT(A) 4. आ र आ ( ) / Concerned CIT 5. "#$ % & &' , आ र ) र*, हमद द / DR, ITAT, Mumbai 6. % -. / 0 / Guard file. ान ु सार/ BY ORDER, स " & //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai