Expenditure Incurred on Leasehold Premises Satisfies Test of Ownership: ITAT Upholds Depreciation Deduction as Capital Expenditure

The ITAT (Income Tax Appellate Tribunal) has upheld "depreciation deduction as capital expenditure for expenditure incurred on leasehold premises," satisfying the test of ownership. The tribunal ruled that if an assessee incurs capital expenditure on a leasehold property and such expenditure provides an enduring benefit, effectively giving the assessee the "right to use" or control akin to ownership for the lease period, then depreciation can be claimed. This decision recognizes the commercial reality that substantial improvements on leased assets, though not strictly owned, are capital in nature and qualify for depreciation.