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Here, I want to know whether depreciation expense can be claimed by the lessor u/s 32 in the case of finance lease. The Question is arise because, As per AS-19 the lessee can claim extra depreciation on leased asset in the books in case of finance lease but income tax disallow the depreciation as you know about it and it becomes timing difference as per AS-22 and DTA/DTL wil be created. If, the depreciation expense on leased asset (finance lease)is not provided to the lessee whether asset given on lease by the lessor (finace lease) can claim depreciation on such leased asset. |
