IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 10TH JUNE 2008 / 20TH JYAISHTA 1930 ITR.No. 2 of 2001() ------------------- (ITA NO.134/COCH/93 IN RA NO.12/COCH/99 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH) APPLICANT: ----------- M/S.CHANAKYA LEASING INVESTMENTS LTD., ALLEPPEY. BY ADV. SRI.S.ANANTHAKRISHNAN RESPONDENTS: ------------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.N.K.SUBRAMANIAN THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 10/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. .................................................................... I.T. Reference No.2 of 2001 .................................................................... Dated this the 10th day of June, 2008. JUDGMENT Ramachandran Nair, J. The question raised is whether assessee is entitled to depreciation for domestic articles purchased by parties with the funds provided by the assessee. Assessee's case is that invoices are in the name of the assessee and consequently assessee is entitled to depreciation on the items the purchase of which was funded by the assessee. The Tribunal on facts found that assessee is only collecting cost of the goods purchased by various parties. The collection of cost in instalments with interest is not leasing of the articles and therefore, assessee was rightly held to be not eligible for depreciation by the Tribunal. Counsel for the Revenue has relied on decision of the Karnataka High Court in GOWRI SHANKAR FINANCE LTD. V. COMMISSIONER OF INCOME-TAX (2001) ITR 713 wherein the Karnataka High Court held on similar facts that no depreciation is available to assessee in such case. We, therefore, dispose of the Reference 2 case by answering the question raised against the assessee and in favour of the Revenue. A copy of this judgment under the seal of the High Court and signature of the Registrar shall be forwarded to the Income Tax Appellate Tribunal, Cochin Bench. C.N.RAMACHANDRAN NAIR Judge V.K.MOHANAN Judge pms