The Tax Publishers2021 TaxPub(DT) 0773 (Mad-HC)

INCOME TAX ACT, 1961

Section 32

Following the ratio laid down by Supreme Court in Vasisth Chay Vyapar Ltd. [(2018) 90 taxmann.com 365 (SC) : 2018 TaxPub(DT) 0259 (SC)] and the ratio laid down in M/S. Indbank Merchant Banking Services Ltd. [TCA.Nos.2097 to 2099 of 2008, dt. 30-7-2019] assessee was entitled to claim depreciation on the flameless furnace and steel rolls.

Depreciation - Allowability - Flameless furnace and steel rolls -

Assessee company, a Public Limited Company, was in the business of hire purchase financing, equipment leasing and allied activities. It claimed depreciation on the flameless furnace and steel rolls. AO denied claim of depreciation on the ground that it was a financial transaction. Held: Following the ratio laid down by Supreme Court in Vasisth Chay Vyapar Ltd. [(2018) 90 taxmann.com 365 (SC) : 2018 TaxPub(DT) 0259 (SC)] and the ratio laid down in M/S. Indbank Merchant Banking Services Ltd. [TCA.Nos.2097 to 2099 of 2008, dt. 30-7-2019] the order passed by AO was liable to be set aside. Accordingly, assessee was entitled to claim depreciation on the flameless furnace and steel rolls.

Followed:Vasisth Chay Vyapar Ltd. [(2018) 90 taxmann.com 365 (SC) : 2018 TaxPub(DT) 0259 (SC)] and M/S. Indbank Merchant Banking Services Ltd. [TCA.Nos.2097 to 2099 of 2008, dt. 30-7-2019] .

REFERRED :

FAVOUR : In favour of assessee

A.Y. : 1996-97



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