NATIONAL DAIRY DEVELOPMENT BOARD,ANAND V. THE ACIT,ANAND CIRCLE, ANAND

MA 126/AHD/2024

AI Insights

The case involves the National Dairy Development Board (NDDB) appealing to the ITAT against the Assistant Commissioner of Income Tax concerning the nature of lease transactions and the allowability of depreciation on leased assets for the assessment year 2010-11. The primary contention was whether the leases were operating leases or finance leases, which affects the depreciation claims. The CIT(A) had previously classified these leases as operating leases in an earlier assessment year (2006-07), a decision which the Tribunal initially overlooked, leading to the NDDB's filing of a Miscellaneous Application. The Tribunal acknowledged the oversight and recalled its earlier decision for a detailed re-examination of this specific issue.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827132 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 17-09-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: APARNA PARELKAR
• Keywords: Depreciation

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER M.A. No.126/Ahd/2024 in I.T.A. No.1873/Ahd/2014 (Assessment Year: 2010-11) National Dairy Development Board, P.O. Box No. 40, Anand, Gujarat-388001 Vs. Assistant Commissioner of Income Tax, Anand Circle, Anand [PAN No.AABCN2029C] (Appellant) .. (Respondent) Appellant by : Ms. Aparna Parelkar, AR Respondent by: Shri Abhijit, Sr. D.R. Date of Hearing 28.11.2025 Date of Pronouncement 05.01.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: The present Miscellaneous Application has been filed by the assessee, National Dairy Development Board, seeking rectification of a mistake apparent from the record in the order passed by the Hon’ble ITAT, Ahmedabad Bench, dated 17.05.2024 in ITA No. 1873/Ahd/2014 for A.Y. 2010–11, insofar as it relates to Ground No. 2 raised by the Department. The grievance of the assessee in the Miscellaneous Application is confined only to the observations and conclusions drawn by the Tribunal while adjudicating Ground No. 2 of the Departmental appeal concerning the nature of lease transactions and the allowability of depreciation on leased assets. Printed from counselvise.com M.A No. 126/Ahd/2024 (in ITA No. 1873/Ahd/2014) National Dairy Development Board vs. ACIT Asst. Year –2010-11 - 2– 2. In the Miscellaneous Application, the assessee has pointed out that the Department had raised Ground No. 2 challenging the finding of the CIT(A) that the agreements for leasing of assets entered into by the assessee were in the nature of operating lease. While deciding this ground, the Hon’ble Tribunal, in paragraphs 27, 28, 44 and 45 of its order dated 17.05.2024, restored the matter to the file of the CIT(A) on the reasoning that the CIT(A) had not given any categorical finding or proper basis for holding that the leases were operating leases and not finance leases, particularly in the light of the Assessing Officer’s findings that the assets were given on long-term lease covering the effective economic life of the assets. 3. The assessee has contended in the Miscellaneous Application that the above observation of the Tribunal suffers from a mistake of fact apparent from the record. It has been submitted that the CIT(A), while deciding the issue for the year under consideration, had expressly relied upon and followed his own appellate order for A.Y. 2006–07, wherein a detailed examination of the lease agreements was carried out. According to the assessee, in the appellate order for A.Y. 2006–07, which was placed before the Tribunal as part of the common paper book, the CIT(A) had clearly analysed the lease agreements, distinguished between operating leases and finance leases, and recorded a categorical finding that the leases in question were operating leases, except in the case of buildings given on rent. The relevant extracts from the CIT(A)’s order for A.Y. 2006–07, particularly paragraphs 6.2.2 and 6.2.3, were relied upon by the assessee to demonstrate that the CIT(A) had examined the nature of the agreements, the rights and obligations of the parties, and the retention of ownership and risks by the assessee, and had thereafter concluded that the leases were operating leases. Printed from counselvise.com M.A No. 126/Ahd/2024 (in ITA No. 1873/Ahd/2014) National Dairy Development Board vs. ACIT Asst. Year –2010-11 - 3– 4. The assessee has further submitted that since the facts for A.Y. 2010–11 were identical to those for A.Y. 2006–07, the CIT(A), by following the earlier year’s appellate order, had effectively adopted and applied the same reasoning and findings. Therefore, according to the assessee, it is factually incorrect to observe that the CIT(A) had not given any basis or reasoning for holding the leases to be operating leases. The assessee has argued that the Tribunal, while restoring the matter to the file of the CIT(A), overlooked these findings which were already on record and formed part of the material placed before the Bench. 5. On this basis, the assessee has submitted that the Tribunal committed a mistake apparent from the record by proceeding on the premise that the CIT(A) had not examined or recorded findings on the distinction between operating lease and finance lease. It has been pleaded that the issue had already been analysed by the CIT(A) in detail in the earlier year and adopted for the year under consideration, and therefore there was no necessity to restore the matter again to the file of the CIT(A). 6. In view of the above, the assessee has prayed in the Miscellaneous Application that the Hon’ble Tribunal may modify its order dated 17.05.2024 to the extent of Ground No. 2 of the Departmental appeal by taking into account the existing findings of the CIT(A) regarding the nature of the lease. Alternatively, the assessee has requested that the order on this limited issue may be recalled and the matter be fixed for fresh hearing, so that the factual position emerging from the CIT(A)’s orders and the lease agreements already on record can be duly considered. Printed from counselvise.com M.A No. 126/Ahd/2024 (in ITA No. 1873/Ahd/2014) National Dairy Development Board vs. ACIT Asst. Year –2010-11 - 4– 7. We have heard the rival contentions and perused the material on record. The present Miscellaneous Application has been filed by the assessee seeking rectification of an alleged mistake apparent from the record in the order of this Tribunal dated 17.05.2024 in ITA No. 1873/Ahd/2014 for A.Y. 2010–11, limited only to the adjudication of Ground No. 2 raised by the Department relating to the nature of lease transactions and consequential allowability of depreciation on leased assets. On careful consideration of the submissions made in the Miscellaneous Application and the material placed before us, we find that the assessee has specifically pointed out that while adjudicating Ground No. 2 of the Departmental appeal, this Tribunal proceeded on the premise that the learned CIT(A) had not given any categorical finding or proper reasoning as to why the leases in question were to be treated as operating leases and not finance leases. The assessee has brought to our notice that the learned CIT(A), while deciding the appeal for the year under consideration, had followed and relied upon his own appellate order for A.Y. 2006–07, wherein the lease agreements were examined in detail and a clear finding was recorded holding the leases, other than buildings given on rent, to be operating leases. It has been contended that these findings formed part of the record placed before the Tribunal and were applicable to the year under consideration as the facts were identical. 8. In view of the above factual position, we are of the considered view that, to this limited extent, there is merit in the contention of the assessee that the issue relating to the nature of lease transactions requires a fresh look by this Tribunal after duly considering the findings recorded by the CIT(A) in the earlier assessment year and their applicability to the impugned year. However, we also find that this does not warrant a review of the entire order dated 17.05.2024, nor Printed from counselvise.com M.A No. 126/Ahd/2024 (in ITA No. 1873/Ahd/2014) National Dairy Development Board vs. ACIT Asst. Year –2010-11 - 5– does it call for interference with the findings recorded on other issues decided therein. 9. Accordingly, in the interest of justice, we recall our order dated 17.05.2024 only for the limited purpose of fresh analysis and adjudication of Ground No. 2 of the Departmental appeal in ITA No. 1873/Ahd/2014 for A.Y. 2010–11, relating to the characterization of lease transactions as operating lease or finance lease and thereafter pass order also after taking into consideration the observations of ITAT made in the order (against which the present Miscellaneous Application has been filed) with respect to the issue of lease. The order shall remain intact and undisturbed in respect of all other grounds and issues decided therein. 10. The Registry is directed to fix the said limited issue for hearing in due course. 11. The Miscellaneous Application filed by the assessee is accordingly allowed for this limited purpose. This Order pronounced in Open Court on 05/01/2026 Sd/- Sd/- (M. V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/01/2026 Tanmay, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "