Difference between “Finance Lease” & “Operating Lease” Explained

IndusInd Bank Ltd vs. ACIT (ITAT Mumbai Special Bench)

The assessee, a bank, purchased a boiler and gave it on lease to Indo-Gulf Fertilisers. The assessee claimed depreciation on the said boiler on the basis that it was the “owner” thereof. The AO & CIT (A) disallowed the claim for depreciation on the basis that the transaction was a “finance lease” which was akin to a loan given by the assessee and that the assessee was not the “owner“. On a reference to the Special Bench HELD: