Where rewards incidental to ownership of the underlying asset were not transferred, the lease does not to constitute the Financial Lease – Greater Noida Industrial Development Authority Vs. Shri Pramod Agrawal – NCLAT New Delhi
The Lease Deed show that the land has been leased for 99 years with recitals showing that rights incidental to ownership have been given to the Corporate Debtor and it is argued that as per the IndAS the Lease Deed is required to be categorized as financial lease. It is argued that the lease transferred all the risks and rewards incidental to ownership of the underlying asset.
NCLAT held that we have already examined a similar Lease Deed in the matter of “New Okhla Industrial Development Authority vs. Mr. Anand Sonbhadra (RP) (2021) ibclaw.in 220 NCLAT”, and such Lease Deed was threadbare discussed by us in that matter. We have already in that matter held that such Lease Deed (as in the present one) does not constitute the Financial Lease. For similar reasons we do not find that Appellant is able to show Financial Lease in its favour.
