( 1 ) THE appeal in ITA 101/2000 by the Assessee pertains to the assessment Year 1994-95, challenging the order of Income-tax Appellate Tribunal. The assessee is a Public Limited Company, engaged, inter alia, in the business of leasing financing and hire-purchase.

( 2 ) THE assessee had entered into several "leasing" transactions involving movables, with M/s. Kasturba Medical College, M/s. Manipal Institute of Technology and other educational Institutions and Trusts.

( 3 ) UNDER the terms of the several identical contracts, the appellant has purchased assets and leased the same to the aforesaid Institutions. The appellant has received refundable security deposits, which sums were equivalent to the purchase value of the assets. The security deposits were interest bearing. The lease rental payable by the lessee was equal to the interest payable on the security deposit.

( 4 ) THE appellant claimed depreciation in respect of assets under these transaction, the assessing authority denied the same, holding:

a) The appellant-Company and the Institution to which the assets were leased, were controlled by common members. b) The transaction was a "self-cancelling transactio