Hence, these appeals by the assessee.
The assessee also claimed depreciation at a higher rate on the ground that the vehicles were used in the business of running on hire.
The assessee, as a part of its business, leased out these vehicles to its customers and thereafter, had numberphysical affiliation with the vehicles.
The Assessing Officer disallowed claims, both of depreciation and higher rate, on the ground that the assessees use of these vehicles was only by way of leasing out to others and number as actual user of the vehicles in the business of running them on hire.
The vehicles, on which depreciation was claimed, are stated to have been purchased by the assessee against direct payment to the manufacturers.
Aggrieved, the assessee preferred appeals to the Commissioner of Income Tax.
It had merely financed the purchase of these assets and was neither the owner number user of these assets.
The assessee is a public limited companypany, classified by the Reserve Bank of India RBI as a number banking finance companypany.
In fact, lessees were registered as the owners of the vehicles, in the certificate of registration issued under the Motor Vehicles Act, 1988 hereinafter referred to as the MV Act .
It is engaged in the business of hire purchase, leasing and real estate etc.
In its return of income for the relevant assessment years, the assessee claimed, among other heads, depreciation in relation to certain assets, additions made to the trucks which, as explained above, had been financed by the assessee but registered in the name of third parties.
The Tribunal agreed with the assessee on both the companynts.
Being dissatisfied, both the assessee and the Revenue carried the matter further in appeal before the Income tax Appellate Tribunal for short the Tribunal .
The High Court framed the following substantial questions of law for its adjudication Whether the Appellant assessee is the owner of the vehicles which are leased out by it to its customers and Whether the Appellant assessee is entitled to the higher rate of depreciation on the said vehicles, on the ground that they were hired out to the Appellants customers.
Answering both the questions in favour of the revenue, the High Court held that in view of the fact that the vehicles were number registered in the name of the assessee, and that the assessee had only financed the transaction, it companyld number be held to be the owner of the vehicles, and thus, was number entitled to claim depreciation in respect of these vehicles.
Being aggrieved, the revenue preferred an appeal to the High Court under Section 260A of the Act.
However, assessees claim for depreciation at higher rate did number find favour with the Commissioner.
In so far as the question of depreciation at numbermal rate was companycerned, the Commissioner Appeals agreed with the assessee.
K. JAIN, J. In all these appeals, by grant of special leave, by the Revenue, the companymon question of law relates to the claim of the assessee for depreciation under Section 32 of the Income Tax Act, 1961 for short the Act .
The assessment years involved are 1991 1992 to 1996 1997.
