NATIONAL DAIRY DEVELOPMENT BOARD,ANAND V. THE DY.COMMISSIONER OF INCOME TAX.,ANAND CIRCLE, ANAND

MA 128/AHD/2024

AI Insights

The case involves the National Dairy Development Board (NDDB) appealing against the Deputy Commissioner of Income Tax regarding the nature of lease transactions and the consequential allowability of depreciation on leased assets for the Assessment Year 2011-12. The Tribunal initially restored the issue to the file of the CIT(A) for fresh adjudication due to insufficient reasoning provided in the original decision. The NDDB filed a Miscellaneous Application claiming that the Tribunal overlooked detailed findings from a previous assessment year, which supported their position that the leases were operating leases. The Tribunal acknowledged the oversight and recalled the order for a detailed re-examination of the lease characterization.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826267 (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: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-09-2024
• Result in Favour of: Revenue
• 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.128/Ahd/2024 (in I.T.A. No.2954/Ahd/2016) (Assessment Year: 2011-12) National Dairy Development Board, P.O. Box No. 40, Anand, Gujarat-388001 Vs. Deputy 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 brief facts of the case are that the assessee, National Dairy Development Board, filed the present Miscellaneous Application before the Hon’ble Income Tax Appellate Tribunal, Ahmedabad “B” Bench, arising out of the consolidated order dated 17 May 2024 passed in ITA No. 2954/Ahd/2016 for Assessment Year 2011–12, along with connected appeals and cross objections for Assessment Years 2010–11 and 2011–12. The Miscellaneous Application has been filed seeking rectification of a mistake apparent from the record in the Tribunal’s order, insofar as it relates to adjudication of Ground Nos. 1 and 2 raised by the Department in its appeal concerning the nature of lease transactions entered into by the Printed from counselvise.com M.A No. 128/Ahd/2024 (in ITA No. 2954/Ahd/2016) National Dairy Development Board vs. DCIT Asst. Year –2011-12 - 2– assessee and the consequential allowability of depreciation on leased assets. 2. In the original departmental appeal, the Revenue had, inter alia, raised grounds contending that the learned CIT(A) erred in holding that the agreements for leasing of assets entered into by the assessee were in the nature of operating leases and further erred in allowing depreciation to the assessee even though the assets were utilised by the lessees and not by the assessee itself. While adjudicating these grounds, the Hon’ble Tribunal, in paragraphs 27 and 28 as well as paragraphs 44 and 45 of its order dated 17 May 2024, observed that although the learned CIT(A) had allowed depreciation on assets other than buildings by treating the leases as operating leases, he had not given any categorical reasoning or basis for concluding 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 with renewal clauses. On this reasoning, the Tribunal restored the issue relating to depreciation on leased assets to the file of the learned CIT(A) for fresh adjudication and for recording clear findings on whether the leases were operating leases or finance leases. 3. Aggrieved by these observations and directions, the assessee filed the present Miscellaneous Application contending that the Tribunal committed a mistake of fact apparent from the record. The assessee submitted that the learned CIT(A), while deciding the issue for the Printed from counselvise.com M.A No. 128/Ahd/2024 (in ITA No. 2954/Ahd/2016) National Dairy Development Board vs. DCIT Asst. Year –2011-12 - 3– assessment year under consideration, had expressly relied upon and followed his own appellate order for Assessment Year 2006–07. It was pointed out that in the appellate order for A.Y. 2006–07, the learned CIT(A) had undertaken a detailed examination of the lease agreements, analysed the nature of the rights and obligations of the parties, examined whether the risks and rewards incidental to ownership were transferred, and thereafter recorded a categorical finding that the leases, except in the case of buildings given on rent, were operating leases and not finance leases. The assessee submitted that these findings were contained in paragraphs 6.2.2 and 6.2.3 of the CIT(A)’s order for A.Y. 2006–07, which had been placed before the Tribunal as part of the common paper book and were specifically relied upon during the course of hearing. 4. According to the assessee, since the facts for A.Y. 2011–12 were identical to those for A.Y. 2006–07, the learned CIT(A), by following the earlier year’s appellate order, had effectively adopted and applied the same reasoning and conclusions. Therefore, it was contended that the Tribunal’s observation that the learned CIT(A) had not given any basis or reasoning for holding the leases to be operating leases was factually incorrect and contrary to the material already on record. The assessee submitted that the Tribunal, while restoring the issue to the file of the CIT(A), overlooked the detailed findings already recorded in the earlier year and followed in the year under consideration. On this basis, it was pleaded that the Tribunal’s order suffered from a mistake apparent from the record. Printed from counselvise.com M.A No. 128/Ahd/2024 (in ITA No. 2954/Ahd/2016) National Dairy Development Board vs. DCIT Asst. Year –2011-12 - 4– 5. In the Miscellaneous Application, the assessee prayed that the Tribunal may modify its order dated 17 May 2024 to the extent of Ground Nos. 1 and 2 of the Departmental appeal by taking into account the existing findings of the learned CIT(A) regarding the nature of the lease transactions. Alternatively, the assessee 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 for earlier years and the lease agreements already on record could be properly considered and adjudicated. 6. We have heard the rival contentions and perused the material on record. 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 the ground relating to the characterization of lease transactions as operating lease or finance lease and thereafter to pass an order afresh after taking into consideration the observations made by this Tribunal in the order dated 17.05.2024, against which the present Miscellaneous Application has been filed, as well as the specific contentions of the assessee regarding reliance placed by the learned CIT(A) on his appellate order for earlier assessment year and the findings recorded therein with respect to the nature of lease agreements. 7. We make it clear that the recall is strictly confined to this limited issue concerning the nature of lease transactions and the consequential allowability of depreciation on leased assets, so as to enable proper Printed from counselvise.com M.A No. 128/Ahd/2024 (in ITA No. 2954/Ahd/2016) National Dairy Development Board vs. DCIT Asst. Year –2011-12 - 5– appreciation of the material already available on record and to adjudicate the matter in accordance with law. 8. The order dated 17.05.2024 shall remain intact, valid and undisturbed in respect of all other grounds and issues decided therein. 9. In the result, the Miscellaneous Application filed by the assessee is dismissed. 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 1. Date of dictation 22.12.2025 (Dictated on dragon software) 2. Date on which the typed draft is placed before the Dictating Member 23.12.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .12.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement .12.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 05.01.2026 7. Date on which the file goes to the Bench Clerk 05.01.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "