Commissioner of Income Tax vs UTI Bank Ltd.

D.A. Mehta, J.—The appellant-Revenue has proposed the following question:

Whether the Appellate Tribunal is right in law and on facts in confirming the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance of depreciation of Rs. 1,18,10/500 made on account of excess depreciation?

Heard learned Counsel for the appellant-Revenue. She has reiterated the observations made by the Assessing Officer for the assessment year. However, learned standing Counsel could not point out as to how the facts in the present case are different from the facts noted by this court in the case of Commissioner of Income Tax Vs. Pinnacle Finance Ltd., where the High Court has followed the apex court''s decision in the case of Commissioner of Income Tax, Karnataka, Bangalore Vs. M/s. Shaan Finance (P) Ltd., Bangalore,

As can be seen from the record that both the Commissioner (Appeals) and the Tribunal have concurrently found that ownership of assets in the hands of the assessee-lessor is not disputed and delivery of assets on September 30, 1996, is also not disputed. In so far as usage of assets is concerned, it has been held that there was no evidence to justify that assets were not put to use. The Tribunal has recorded as under:

In view of the above facts and circumstances of the case, we respectfully following the decision of the jurisdictional High Court in the case of Commissioner of Income Tax Vs. Pinnacle Finance Ltd., as well as the decisions of various Benches of the Tribunal (supra), are of the opinion that the use of leased out assets is to be considered with the angle of the use of the assets in the assets in the business of the lessor and not the lessee and since, in the present case, the lessor''s ownership, execution of lawful agreement for leasing out the assets to the lessee and delivery of the assets to the lessee by September 30, 1996, has been accepted by the Revenue, the assets in question, for the purpose of allowing depreciation to the lessor, are deemed to have been used in the business of the lessor latest on September 30, 1996, and, therefore, the assessee was entitled to full depreciation.

In the case of Commissioner of Income Tax Vs. Pinnacle Finance Ltd., this court has considered the ratio of the apex court''s decision in the following words (page 397):

It is further held by the apex court that where the business of the assessee consists of hiring out machinery and/or where the income derived by the assessee from the hiring of such machinery is business income, the assessee must be considered as having used the machinery for the purpose of its business.

In the circumstances, in the absence of any legal infirmity in the impugned order of the Tribunal the appeal is required to be dismissed.

No question of law, much less a substantial question of law, as proposed or otherwise arises from the impugned order of the Tribunal. The appeal is accordingly dismissed.