As certain common facts are involved in these three appeals same were argued together by learned counsel for assessee and learned Departmental Representative. We are deciding these appeals by this common order for convenience. Appeal in ITA Nos. 1754 and 1755 are appeals filed by assessee on 4th May, 2001 against orders of learned CIT(A)- XXVIII, New Delhi dt. 28th Feb., 2001 in case of assessee in relation to assessment orders under s. 143(3) for asst. yrs. 1995-96 and 1996-97. Appeal in ITA No. 1948 is appeal filed by Revenue on 14th May, 2001 for asst. yr. 1997-98. common point involved in these three appeals is as to whether assessee is entitled to claim depreciation on certain assets under hire-purchase. Facts of case leading to these appeals briefly are that assessee- company was engaged in these years in business of leasing and other related financial activities. For asst. yr. 1995-96, assessee claimed depreciation on hire-purchase assets to tune of Rs. 2,46,03,665. assessee explained that it was financing company and assets owned by it were given on hire to various parties under hire-purchase agreements entered into with them. These agreements provided that on payment of all instalments and exercise of option by hirer title or interest in property would pass to hirer. Until then assessee was true owner of assets and, therefore, assessee was claiming depreciation in its returns of income though no provision had been made in books of account. In support of this contention, assessee relied on judgments in Sardar Tara Singh vs. CIT (1963) 47 ITR 756 (MP), CIT vs. Hindustan Cold Storage & Refrigeration (P) Ltd. 1976 CTR (Del) 78: (1976) 103 ITR 455 (Del) and Addl. CIT vs. Mercury General Corpn. (P) Ltd. (1982) 26 CTR (Del) 171: (1982) 133 ITR 525 (Del). assessee argued that as per provisions of s. 32 depreciation was allowable on assets owned by assessee and used for that assessee s business. In case of assessee both conditions were satisfied. learned AO noticed that though assessee claimed depreciation on vehicles registration of those vehicles was in name of hire-purchaser. ownership of movable assets was governed by possession. He, therefore, asked assessee to file confirmations from hire-purchasers as to whether they had exercised option to purchase assets at end of termination of hire- purchase agreement or not. In spite of opportunities given to assessee failed to file such confirmation. On these facts learned AO held that assessee s claim of depreciation was not allowable and he added sum of Rs. 2,46,03,665 to income declared by assessee. During course of hearing before learned CIT(A) assessee apart from judgments relied upon before AO, further relied on judgments in M.D. Narayan vs. Agrl. ITO (1974) 95 ITR 452 (Mys) and CIT vs. Sarveshwar Nath Nigam (1963) 48 ITR 853 (P&H). assessee also placed reliance on orders of CIT(A) in its own case for earlier asst. yrs. 1990-91 to 1992-93 and 1994-95. learned CIT(A) held view that judgment of Hon ble Delhi High Court in case of Addl. CIT vs. General Industries Corpn. (1986) 50 CTR (Del) 87: (1985) 155 ITR 430 (Del) had not been considered by his predecessor in earlier years. In that judgment Hon ble Delhi High Court had held that hire- purchase agreement could as well be regarded as sale on instalments. learned CIT(A) noticed that views expressed by Hon ble Delhi High Court in Addl. CIT vs. General Industries Corpn. (supra) were reiterated by Hon ble High Court in judgment in CIT vs. Nagpur Golden Transport Co. (1999) 151 CTR (Del) 186: (1998) 233 ITR 389 (Del). Respectfully following judgments of jurisdictional High Court, learned CIT(A) upheld disallowance of depreciation as made by learned AO. For asst. yr. 1996-97 assessee claimed depreciation on hire-purchase assets to tune of Rs. 13,46,01,830. assessee furnished same explanation as for asst. yr. 1995-96. learned AO held that registration of vehicles was in name of hire-purchaser. In case of movable assets ownership was governed by possession. assessee-company was required to file confirmation from hire-purchasers to confirm whether they had exercised option to purchase assets at end of termination of hire-purchase agreement or not. assessee failed to file such confirmation even after opportunity had been given to him. Based on these facts learned AO disallowed assessee s claim of depreciation. Arguments of assessee and findings of learned CIT(A) are same as already enumerated by us in relation to asst. yr. 1995-96. As matter of fact learned CIT(A) has passed on 28th Feb., 2001 consolidated order for asst. yrs. 1995-96 and 1996-97. For asst. yr. 1997-98 assessee-company claimed depreciation of Rs. 11,73,13,134 on vehicles supplied under hire-purchase finance agreements. Admittedly assessee had not provided any depreciation on those assets in its books of account. However, during course of assessment proceedings assessee relied upon hire-purchase agreements and stated that till payment of last instalment and exercise of option by hirer, title of vehicles remained with assessee. assessee relied upon judgments in Sardar Tara Singh vs. CIT (1963) 47 ITR 756 (MP); CIT vs. Sarveshwar Nath Nigam (supra) and Chaganlal Automobiles vs. CIT (1985) 49 CTR (Raj) 54: (1985) 156 ITR 58 (Raj). learned AO held that though hire-purchase agreements entered into by assessee had been termed as hire agreements, in effect they were sold on instalments. instalments being paid by hirers also included purchase price of vehicles. learned AO referred to various CBDT circulars. He also relied upon judgments of Hon ble Delhi High Court in Addl. CIT vs. General Industries Corpn. (supra) and CIT vs. Nagpur Golden Transport Co. (supra). Respectfully following judgments learned AO disallowed assessee s claim of depreciation. During course of hearing before learned CIT(A) for asst. yr. 1997- 98 assessee reiterated its argument that ownership was transferred only o n payment of last instalment and exercise of option by hirer to purchase asset. assessee relied upon orders of learned CIT(A) in its own case for asst. yrs. 1990-91 to 1994-95. He also relied on judgment of Hon ble Supreme Court in case of CIT vs. Shaan Finance (P) Ltd. (1998) 146 CTR (SC) 110: (1998) 231 ITR 308 (SC) that where income derived from hiring constituted business income, lessor could be considered as having used machinery for purpose of its business and, therefore, qualified for investment allowance. According to learned CIT(A) as natural corollary depreciation also became admissible to owner on hired assets. According to learned CIT(A), Hon ble Supreme Court in CIT vs. Shaan Finance Co. (P) Ltd. (supra) without considering Delhi High Court judgment in case of Addl. CIT vs. General Industries Corpn. (supra) and CIT vs. Nagpur Golden Transport Co. (supra) overruled those judgments. Hon ble Supreme Court had taken view that in business of hiring/leasing of assets, assets were considered to be used in business of hiring by lessor. As lessor continued to retain ownership of asset which was merely licensed to be used by hirer in capacity of bailee without any right of ownership in asset. learned CIT(A), therefore, held that there was no extinguishment of ownership right of lessor in hired assets in business of leasing. There was no element of sale and assets belonged to lessor on which depreciation was admissible to lessor. learned CIT(A), therefore, directed AO to allow assessee depreciation as claimed. Aggrieved by orders of learned CIT(A) for asst. yrs. 1995-96 and 1996-97 assessee is in appeal before us while for asst. yr. 1997-98 it is Revenue who is appellant. facts and issue involved in all these three appeals are, however, one and same. During course of hearing before us learned counsel for assessee reiterated his contention that under agreement hirer could become owner of vehicle only on payment of last instalment and only after he exercised his option to purchase vehicle. He argued till then ownership vested in assessee. In view of judgment of Hon ble Supreme Court in case of Shaan Finance (P) Ltd. (supra), assessee as owner could claim depreciation of vehicle on ground that same has been used by him for purpose of its business of leasing vehicles. learned counsel further emphasized that there was no sale possible if hirer did not exercise his option. Referring to judgment of Hon ble Delhi High Court in case of Addl. CIT vs. General Industries Corpn. (supra), learned counsel argued that in that case question put to Hon ble High Court was whether Tribunal was correct in directing ITO to dispose of contention of assessee regarding admissibility of depreciation and development rebate in conformity with instructions of CBDT as contained in their circular relied conformity with instructions of CBDT as contained in their circular relied on by assessee. reference had been filed at instance of Revenue and assessee had relied upon CBDT circular. That being so Hon ble Delhi High Court answered question in affirmative. learned counsel also pointed out that even in that judgment Hon ble Delhi High Court had held that it was difficult question to be resolved. Hon ble Delhi High Court had in way upheld CBDT circular but it was settled legal position that while CBDT circulars are binding on Revenue authorities, they are not binding on assessee. learned counsel referred to judgment of Hon ble Rajasthan High Court in case of Chaganlal Automobiles vs. CIT (supra) and argued that judgment was squarely in favour of assessee. In that case it was held that as entire price was not paid assessee was not entitled to claim depreciation. learned counsel also pointed out that as per terms of agreement assessee as owner had reserved right to rescind agreement and to take possession of vehicles for breach of any of obligations by hirer. learned counsel further argued that until asst. yr. 1994-95 Department had allowed assessee s claim. Thereafter for asst. yrs. 1997-98 to 2002-03 again depreciation had been allowed to assessee. Rule of consistency demanded that same treatment should be given in asst. yrs. 1995-96 and 1996-97 as well. learned Departmental Representative argued that verdict of Hon ble Delhi High Court was quite clear both by judgment in Addl. CIT vs. General Industries Corpn. (supra) as well as CIT vs. Nagpur Golden Transport Co. (supra). view taken by Hon ble Delhi High Court was also supported by judgment of Hon ble Supreme Court in Mysore Minerals Ltd. vs. CIT (1999) 156 CTR (SC) 1: (1999) 239 ITR 775 (SC) and CIT vs. Mirza Alaullaha Baig (1993) 202 ITR 291 (Bom). As to rule of consistency learned Departmental Representative said that for asst. yr. 1997-98 Revenue was in appeal and there was no reason to hold that Revenue had given up its stand. We have carefully considered rival submissions. In our opinion, issue stands squarely covered in favour of Revenue and against assessee by judgments of Hon ble Delhi High Court. In case of General Industries Corpn. (supra) Hon ble Delhi High Court decided upon issue in following words: "On careful examination of nature of hire-purchase agreement, it can be said that though it is worded as hiring agreement which matures into sale, it can also be regarded as sale on instalments. property passes in such agreements on payment of last instalment. However, during period of hire, purchaser is also paying price, so virtually it is sale on instalments. circulars of CBDT only serve to overcome greater difficulty in computing how various allowances have to be given to assessee. If payments towards hire-purchase are not treated as being capital payments, they will have to be allowed as revenue payments, because payments are certainly for business purposes and yet, if they are not treated s capital payments, they will necessarily be amounts expended towards carrying out of business. On other hand, if property passes at time of last instalment, then entire revenue payment will be transformed into capital payment at that stage. To meet this obvious difficulty, CBDT has issued circulars at various times directing that assets purchased on hire- purchase basis should be treated as belonging to assessee. various documents filed along with statement of case show that this position has been continuing for very long time. Circular No. 9, dt. 23rd March, 1943, issued by Central Board of Revenue directed that periodical payments should be treated as (a) consideration for hire to be allowed as revenue deduction, and (b) payment on account of purchase to be treated as capital layout. It is also mentioned in that circular that depreciation should be allowed on initial value, i.e., amount for which hired object could be purchased in cash on date of agreement. same view was reiterated by Central Board of Revenue in its Circular dt. 26th June, 1959. Central Board of Revenue again reiterated its instructions in November, 1962, and again on 15th July, 1963. In technical instructions of November, 1962, it is pointed out that if depreciation is not allowed to user same cannot also be granted to owner because he is not using object for business, i.e., result would be that neither owner nor hirer would get allowance. This document points out that it is person who runs business who should get allowance and not formal owner. As we see it, there is real difficulty in determining who is to get allowance and how much, which has been resolved by circulars." In case of Nagpur Golden Transport Co. (supra), question was raised whether Tribunal was right in law in allowing depreciation on trucks purchased by assessee on hire-purchase basis. Relying upon earlier judgment in case of General Industries Corpn. (supra), Hon ble Delhi High Court answered question in affirmative in favour of assessee and against Revenue. Thus, both in case of General Industries Corpn. (supra) as well as Nagpur Golden Transport Co. (supra), Delhi High Court has held that in hire-purchase scheme, hirer would be entitled to claim depreciation. These judgments clearly go last instalment was paid, ownership vested in assessee and not in hirer. It would go without saying that same assets cannot be liable to depreciation allowance in hands of two different assessees at same time. Either lessor-cum-seller or hirer-cum-buyer could be entitled to depreciation allowance. As Hon ble High Court have held hirer-cum-purchaser to be rightly entitled to depreciation allowance, as corollary it follows that assessee is not entitled to claim any depreciation allowance. This view is amply justified on facts and circumstances of case of assessee before us. Though during course of hearing before us much emphasis has been laid on last instalment being paid and hirer exercising his option, fact of matter is that during course of assessment proceedings in spite of opportunities being provided assessee could not furnish instances where vehicles in large numbers reverted to assessee at end of hire-purchase agreement. It appears that almost in every case transactions resulted into vehicles finally being transferred to hirer. AO has recorded finding that from beginning these vehicles were registered in names of hirer and that finding of fact has not been challenged before us. Thus, for all practical purposes assessee carried out sale of vehicles on instalment. instalments being received though named as hire-charges for technical reasons represented two components viz., purchase price and interest on deferred purchase price being paid by hirer. right to recover possession was reserved in favour of assessee only to have check over errant hirer. Otherwise for all practical purposes ownership rights were liable to be exercised by hirer from beginning. This aspect is clear from following cl. IV of model hire-purchase agreement entered into by assessee with customer: "Clause IV: If Hirer shall duly perform and observe all terms and conditions in this agreement contained and on his part to be performed and observed and shall in manner aforesaid pay to owners monthly sums by way of rent amounting together with said sum of Rs................ (*A) so paid on execution of agreement as aforesaid to sum of Rs.............. (*B) and shall also pay to owners all other sums of money which may become payable to them by hirer under this agreement hiring shall come to end and equipment shall, at option of hirer, to be exercised by him in writing, then become his property and owners will assign and make over all their right, title and interest in same to hirer, but until such payments as aforesaid have been made, equipment together with any accession, improvements and additions thereto by hirer, shall remain absolute property of owners." It is seen that as long as hirer discharge his obligation he had uninterrupted right over vehicles and assessee was eventually to loose all right, title and interest in vehicle. view taken by AO in assessment orders is amply supported by judgment of Hon ble Supreme Court in case of Mysore Minerals Ltd. vs. CIT (supra). In that judgment assessee was in possession of building on part payment of price. building not registered in name of assessee was not considered to be circumstance coming in way of assessee being treated as owner of building for purposes of s. 32. For all purposes assessee s case is hit by judgment in case of Mysore Minerals Ltd. (supra). only difference is that in that case it was immovable property; whereas in present case asset in question is movable property. In that judgment Hon ble Supreme Court held as under: "It is well-settled that there cannot be two owners of property simultaneously and in same sense of term. intention of legislature in enacting s. 32 of Act would be best fulfilled by allowing deduction in respect of depreciation to person in whom for time being vests dominion over building and who is entitled to use it in his own right and is using same for purposes of his business or profession. Assigning any different meaning would not sub-serve legislative intent. To take case at hand it is appellant assessee who having paid part of price, has been placed in possession of houses as owner and is using buildings for purpose of its business in its own right. Still assessee has been denied benefit of s. 32. On other hand, housing board would be denied benefit of s. 32 because in spite of its being legal owner it was not using building for its business or profession. We do not think such benefit to none situation could have been intended by legislature. finding of fact arrived at in case at hand is that though document of title was not executed by housing board in favour of assessee, but houses were allotted to assessee by housing board, part payment received and possession delivered so as to confer dominion over property on assessee whereafter assessee had in its own right allotted quarters to staff and they were being actually used by staff of assessee. It is common knowledge, under various schemes floated by bodies like housing boards, houses are constructed on large scale and allotted on part payment to those who have booked. Possession is also delivered to allottee so as to enable enjoyment of property. Execution of documents transferring title necessarily follows if schedule of payment is observed by allottee. If only allottee may default property may revert back to Board. That is matter only between housing board and allottee. No third person intervenes. part payments made by allottee are with intention of acquiring title. delivery of possession by housing board to allottee is also step towards conferring ownership. Documentation is delayed only with idea of compelling allottee to observe schedule of payment." This judgment is direct authority that there cannot be two owners of property simultaneously. Hence once Hon ble Delhi High Court have held that hirers to be treated as owners of property for purpose of depreciation allowance, same position cannot be claimed by assessee also. In view of discussion in foregoing paragraphs, while assessee s appeals in ITA Nos. 1754 and 1755/Del/2001 are dismissed, Revenue s appeal in ITA No. 1948/Del/2001 is allowed and disallowance of depreciation as made by AO in assessment order is restored. *** VLS FINANCE LTD. v. DEPUTY COMMISSIONER OF INCOME TAX