“ICDS”

An assessee engaged in the business of hire purchase or leasing, being the lessor, is entitled to claim depreciation on assets leased out, even if the assets are registered in the name of the lessee and used by the lessee.

A Special Bench decision of the Tribunal rendered prior to a Supreme Court decision is subordinate to the Supreme Court ruling.

The Supreme Court remands a matter when an assessee is deprived of the opportunity to cross-examine individuals whose statements were relied upon by the Revenue under Section 132(4) of the Income Tax Act.

In lease transactions, only the lessor is entitled to claim depreciation, regardless of whether the lease is a finance lease or an operating lease. This is because the substantial risks and rewards of ownership are not transferred to the lessee.

This case discusses the allowability of depreciation on leased assets in finance leases, a matter that has been addressed by the Supreme Court in ICDS Ltd vs CIT.

Accumulated profits for the purpose of deemed dividend under section 2(22)(e) are to be computed in accordance with the Income Computation and Disclosure Standards (ICDS) rather than opening balances as per Indian GAAP. This case also touches upon the definition of 'transfer' under section 2(47).

The Delhi High Court held that Income Computation and Disclosure Standards (ICDS) notified under Section 145(2) were ultra vires the provisions of the Income Tax Act, as they exceeded delegated legislative power. Subsequently, Section 43CB was introduced to provide statutory backing for certain ICDS provisions, such as those related to construction contracts using the percentage of completion method.