JUDGMENT Order This appeal relates to assessment year 1986-87. issue pertains to depreciation on 1,250 gas cylinders which assessee had claimed in that year, and which has been disallowed by authorities below. brief facts which require mention for purpose of present appeal are as under: appellant-assessee had set up its unit some time in September, 1985, to carry on business of manufacturing and compressing oxygen, hydrogen, nitrogen amonis, carbonic acid, action (including dissolved) argon, cooking gas and other types of industrial gases or kind substances, etc. For running aforesaid plant, assessee had also bought 1,250 gas cylinders. However, since unit had not started functioning, these gas cylinders were leased out to M/s. Saraveshwari Gases (P.) Ltd., Ghaziabad and M/s. Malik Industries. In return filed by assessee, he claimed depreciation on those gas cylinders at rate of 100 per cent. as provided under rules on aforesaid item. Assessing Officer, however, rejected claim of depreciation on ground that hiring business was not proved. It would be significant to state that appeal filed by assessee before Commissioner of Income-tax (Appeals) was accepted on ground that income received from leasing aforesaid equipment would be treated as business income and on that basis he allowed depreciation. Relevant portion of order of Commissioner of Income-tax (Appeals) reads as under: "22. As per facts, there is no doubt that assessee purchased cylinders during year under consideration and, thus, he became owner of these cylinders. Since oxygen plant could not be put up during year under consideration, assessee was free to use cylinders for any other purpose to his benefits. He did so by leasing out cylinders to two parties. There is no doubt that cylinders was despatched to two parties on September 20, 1985. Leasing out of cylinders, in this case amounted to business of assessee and once cylinders had been despatched to lessee, it can be said that they have been put to use by lessor for business of hiring/leasing cylinders. Whether lessee uses cylinders or keep them unused with him is his outlook. Once cylinders have been given to lessee, lessor loses control over them and he has no right to direct lessee to put them to use in particular manner or fashion. If, according to lease agreements, lessee pays lease amount to lessor, whether he actually uses cylinders or not it is his outlook and not botheration of lessor. Thus, since, cylinders were despatched to lessee by appellant, in this accounting year and he had received some lease amount also, it can be said that cylinders were put to use by appellant in business of leasing. Both conditions for allowing depreciation are, therefore, fulfilled in this case. Income-tax Officer was not justified in rejecting assessee's claim for allowance of depreciation. He is directed to allow depreciation on cylinders as per rules." aforesaid order of Commissioner of Income-tax (Appeals) was set aside by Income-tax Appellate Tribunal and order of Income-tax Appellate Tribunal was upheld by High Court. High Court has concurred with opinion of Tribunal on ground that cylinders were not purchased for leasing business and one of parties to whom cylinders were leased out is manufacture and seller of cylinders. It is further stated that cylinders were dispatched to other party only day before closing of accounting period. aforesaid reasons given by Income-tax Appellate Tribunal and High Court in denying depreciation do not appear to be valid reasons in law. In so far as purchase of gas cylinders by assessee is concerned, this fact is not disputed. It is also not disputed that these gas cylinders were purchased for business purpose. In fact, plea of assessee that since manufacturing unit had not started functioning and this necessitated assessee to lease out these gas cylinders to aforesaid two parties to enable it to earn some income, rather than keeping those cylinders idle, is also not in dispute. On contrary, as mentioned above, income which is generated from leasing out those gas cylinders is treated as "business income". Once income from leasing those gas cylinders is accepted as "business income", which is taxed at hands of assessee as such, we see no reason how depreciation at hands of assessee as such, we see no reason how depreciation on these gas cylinders could be disallowed on ground that cylinders were not purchased for "leasing business". aforesaid facts would clearly demonstrate that assessee has proved ownership of these gas cylinders and use of these gas cylinders for business purpose. Once these ingredients are proved, assessee was entitled to depreciation under section 32 of Income-tax Act. We, therefore, set aside judgment of High Court, and hold that assessee would be entitled to depreciation as claimed for assessment year in question. appeal is accordingly allowed. No costs. *** K. M. Sugar Mills Limited v. Commissioner of Income-tax