Sanjiv Khanna, J.

1. These two appeals under Section 260A of the Income Tax Act, 1961 (Act, for short) by the assessee SREI Infrastructure Finance Ltd. pertaining to assessment years 2006-07 and 2007-08, are directed against the common order dated 23rd February, 2012 passed by the Income Tax Appellate Tribunal (Tribunal, for short). The aforesaid appeals require adjudication on two separate aspects. The first aspect, which is common to both the assessment years, relates to rate of depreciation in respect of motor vehicles given on lease. The substantial question of law framed on the said aspect vide order dated 10th April, 2013, reads as under:-

“Whether Income Tax Appellate Tribunal has erred in law in reminding the issue of claim of depreciation at the higher rate of 30% to the Assessing Officer in respect of motor vehicles given on lease?”

2. The Tribunal in the impugned order has referred to the decision of the Delhi High Court in CIT Vs. MGF (India) Ltd. (2006) 285 ITR 142 (Delhi) and CIT Vs. Bansal Credits Ltd. (2003) 259 ITR 69 (Del). Tribunal in the impugned order reproduced paragraph 23 of the judgment in the case of Bansal Credit Ltd. (supra), which reads as follows:-

“Before we close, we may point out that in some of the cases before us (ITAs No.64/99, 65/99, 73/99 & 74/99), the Tribunal has remanded the matters back to the AOs to examine whether the leased out vehicles had been actually used by the lessee in the business of hire. In the light of the view taken by us, we do not find any infirmity in such a direction. As a matter of fact, wherever there is a doubt it must be examined whether the leased out vehicles are actually being used in the business of hiring. Only in such a situation depreciation at the higher rate of 40 per cent or 50 per cent as the case may be, is to be allowed under the relevant entry in Appendix I to the Rules.”

3. In terms of the aforesaid observations, the Tribunal restored the matter to the file of the Assessing Officer to decide the issue in accordance with law, i.e. end user on part of the persons, who had put the vehicles to use. It was observed that the assessee had canvassed the said factum; however, necessary verification at the end of the Assessing Officer should have been undertaken. The contention of the assessee is that the order of remand should not have been and is not required to be passed.

4. The Supreme Court in the case of ICDS Vs. Commissioner of Income Tax, Mysore and Anr (2013) 350 ITR 527 (SC), had examined and considered the issue of depreciation on vehicles given on hire, in depth and detail. It is noticeable that under Section 32 of the Act, an assessee is entitled to depreciation on buildings, machinery, plant, furniture, etc. being tangible assets owned wholly or partly by the assessee and used for the purpose of business or profession. The Supreme Court observed that depreciation is the monetary equivalent of the wear and tear suffered by a capital asset that is set aside to facilitate its replacement when the asset becomes dysfunctional. Referring to the expression “for the purpose of business”, it was observed that it does not mandate use of the asset by the assessee itself, but requires that the asset should be utilised for the purpose of business of the assessee. Thus, income derived from leasing of trucks by a financing company would be “business income” as the asset was used in the course of business. Reference was made to the decision of the Supreme Court in Commissioner of Income Tax Vs. Shaan Finance (P) Ltd. Bangalore (1998) 231 ITR 308 (SC), which interpreted analogous provisions of Sections 32A(2)(a), (b) and Section 33 of the Act dealing with investment allowance and development rebate, respectively. The second contention of the Revenue that the assessee was not the owner of the asset, i.e. trucks, was also rejected after relying upon the observations of the Tribunal that vehicles were given under a lease agreement on payment of lease rent as