On the issue of fractional ownership, the AL&FS has sought clarification on whether a joint-owner may claim depreciation on an asset put to joint use.
The association has also sought a clarification on whether such depreciation on assets may be claimed on the actual cost incurred by the joint-owner; that upon sale of the fractional interest by one of the joint-owners and the acquisition thereof by any other person, the fractional interest in the asset will be treated as if it were an asset in itself.
Secondly, as regards sale and leasebacks, a rule regarding computing the written down value (WDV) of an individual asset forming part of a block is required, according to AL& FS.
Clarification has also been sought on the date applicable for the amendments.
It has also sought the benefit of tax holiday in case of developing, maintaining and operating infrastructure to all leases of infrastructural assets and not only to the railways.
The railways have been granted this benefit in the case of build, operate, lease and transfer (BOLT) scheme.
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A recent decision made by the Bombay Tribunal bench A on the Centre for Monitoring of Indian Economy (CMIE) has equated a lease with a purchase by the lessee and disallowed rentals as an expense to the lessee.
If the ruling is a precedent, all lessees will lose their claim to rentals expensing and all lessors will lose depreciation, which is against the intent of the government, according to AL&FS.
The association has appealed to the Revenue Secretary that if and when the recent Income Tax Appellate Tribunal (ITAT) ruling comes for appeal, the revenue department should not protest the appeal.
The association has also sought a circular from the CBDT clarifying on disallowance of higher rate of depreciation on commercial vehicles plying on hire.
The CBDT should clarify whether only if there is evidence of actual use of the vehicle for hiring puposes, the higher depreciation rate may be disallowed.