M /S Gujarat Lease Financing Ltd, Ahmedabad V. The A C I T, Ahmedabad

ITA 1677/AHD/1999

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73107 (ITAT-AHMEDABAD)
• Duration Of Justice: 14 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-01-2014
• Assessment Year: 1994-1995
• Appeal Filed On: 02-08-1999
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Bad and doubtful debts
• Section: 32; 6

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. !./ I.T.A. NO.1677/AHD/1999 A.Y. 1994-95 2. !./ I.T.A. NO.1742/AHD/1999 A.Y. 1994-95 1.GUJARAT LEASE FINANCE LTD. 7 TH FLOOR,HASUBHAI CHAMBERS OPP.TOWN HALL,ELLISBRIDGE AHMEDABAD 2. DY.CIT, CENTRAL CIRCLE-2(2) AHMEDABAD / VS. 1. ACIT CENTRAL CIR-2(2) AHMEDABAD 2. GUJARAT LEASE FINANCE LTD. AHMEDABAD & !./'( !./ PAN/GIR NO. : 31-069-CN-2822 ( &) / // / APPELLANT ) .. ( *+&) / RESPONDENT ) ASSESSEE BY : SHRI S.N.SOPARKAR WITH SHRI P.M. MEHTA, ARS REVENUE BY : SHRI SUBHASH BAINS, CIT-DR ' , - $. / / / / DATE OF HEARING : 31/01/2014 /01 - $. / DATE OF PRONOUNCEMENT : 28/02/2014 2 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : BOTH ASSESSEE AND REVENUE HAVE CHALLENGED THE ORD ER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VI, AHMEDABA D (CIT(A) FOR SHORT) DATED 01/06/1999 PERTAINING TO ASSESSME NT YEAR (AY) 1994- ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 2 - 95. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE B EING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENI ENCE. 2. FIRST, WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.1677/AHD/1999 FOR AY 1994-95. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN RESTORING THE MATTER TO THE ASSESSING OFFICER IN RESPECT OF THE CLAIM OF DEPRECIATION U/S.32 OF THE INCOME-TAX ACT, 1961 TO THE EXTENT OF RS.6,17,98,246/- IN AGGREGATE ON THE ITEMS OF ASSETS GIVEN ON LEASE AS DETAILED IN ANNEXURE-A ENCLOSED HEREWITH, WHEN HE OUGHT TO HAVE DIRECTED TO GRANT DEPRECIATIO N AS INDICATED IN ANNEXURE-A ENCLOSED HEREWITH. IN NOT DOING SO, HE HAS FAILED TO APPRECI ATE THE FOLLOWING AMONGST OTHERS: A) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.L, 2 AND 3 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT O F THE ASSETS LEASED OUT TO DPCL WAS VERY SIMPLE IN SO FAR AS THE ASSESSING OFFICER HAD PROCE EDED TO GRANT DEPRECIATED AT 50% OF THE ADMISSIBLE DEPRECIATION ON THE GROUND MAT THE USAGE OF THE ASSETS BY THE APPELLANT WAS FOR LESS THAN 180 DAYS. THE APPELLANT FURNISHED NECESSA RY DETAILS INDICATING THAT THE USAGE WAS ESTABLISHED TO BE IN EXCESS OF 180 DAYS. THE EVIDEN CES FURNISHED WERE VERY SIMPLE TO BE VERIFIED WHICH DID NOT CALL FOR ANY PROLONGED INVES TIGATION OR VERIFICATION. B) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.4 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO ESSAR GUJARAT WAS VERY SIMPLE IN THE SENSE THAT THE ASSESSING OFFICER HAS GRANTED DEPRECIATION AT 50% OF THE DEPRECIATION ADMISSIBLE ON THE GROUND THAT THE USAG E OF THE ASSET IN QUESTION WAS FOR LESS THAN 180 DAYS. DURING THE COURSE OF THE APPELLANT P ROCEEDINGS, THE APPELLANT PRODUCED THE EVIDENCE IN THE FORM OF A CERTIFICATE FROM THE LESS EE TO THE EFFECT THAT THE ASSETS IN QUESTION WAS INSTALLED ON 23.8.93 AND THE USAGE WAS FOR MORE 180 DAYS AND THE DEPRECIATION OUGHT TO HAVE BEEN ALLOWED IN FULL. THE EVIDENCE FURNISHED W AS VERY SIMPLE TO BE VERIFIED WHICH DID NOT CALL FOR ANY PROLONGED INVESTIGATION OR VERIFIC ATION. C) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.5 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO ROSECHEM INDUSTRIES, WAS VERY SIMPLE IN THE SENSE THAT THE ASSESSING OFF ICER HAS REFUSED TO ALLOW THE DEPRECIATION AT 50% OF THE ADMISSIBLE DEPRECIATION IN RESPECT OF THE ASSETS IN QUESTION ON THE GROUND THAT THE MACHINERY IN QUESTION WAS NOT LEASED OUT ON 31. 3.94 AS CLAIMED BY THE APPELLANT. THE APPELLANT PRODUCED THE DELIVERY MEMO DATED 31.3.94 FOR THE SUPPLY OF MACHINERIES TO THE LESSEE FROM CUDDALOI TO MADRAS, THE DISTANCE OF ABO UT 150 KMS., AND THE ASSET WAS, THEREFORE, DELIVERED ON THAT DATE ITSELF, AND THEREFORE, THERE WAS NO JUSTIFICATION IN NOT ALLOWING 50% OF ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 3 - THE ADMISSIBLE DEPRECIATION. THE EVIDENCES PRODUCED BY THE APPELLANT WAS VERY SIMPLE TO BE VERIFIED AND WHICH DID NOT CALL FOR ANY PROLONGED I NVESTIGATION OR VERIFICATION. D) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.6 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO WESTERN PACQUE LTD., WAS VERY SIMPLE IN SO FAR AS THE ASSESSING OFFICER PROCEEDED TO DISALLOW THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE APPELLANT HAD W ITHDRAWN THE CLAIM OF DEPRECIATION ON THE AFORESAID ASSETS WHEN IN FACT NO SUCH WITHDRAWAL WA S MADE. THE APPELLANT POINTED OUT THAT IN A.Y. 1993-94 ALSO THE ASSESSEE HAD LEASED OUT TO TH E SAID LESSEE AND THE CLAIM OF THE APPELLANT WAS ALLOWED IN THAT ASSESSMENT YEAR. SINC E THE DISALLOWANCE WAS WITHOUT ASSIGNING ANY REASON, THE ASSESSEE CONTENDED THAT THE ASSESSI NG OFFICER OUGHT TO HAVE ALLOWED THE DEPRECIATION. THE ISSUE INVOLVED WAS VERY SIMPLE IN SO FAR AS WHAT WAS TO BE VERIFIED WAS WHETHER THE ASSESSEE HAS WITHDREW THE CLAIM, IF ANY , WHICH DID NOT REQUIRE ANY PROLONGED INVESTIGATION OR VERIFICATION. E) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.7 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO ELCOT NEW ERA WAS VERY SIMPLE IN SO FAR AS THE APPELLANT HAS LEASED O UT THE ASSETS IN QUESTION ON 17.9.93 AND THE DELIVERY OF THE MACHINERY IN QUESTION WAS GIVEN ON 27.9.93. THEREFORE, THERE WAS NO JUSTIFICATION IN DISALLOWING THE CLAIM OF DEPRECIAT ION OF RS.50,13,300/- I.E. 100% OF THE ADMISSIBLE DEPRECIATION. THE EVIDENCES FURNISHED BY THE APPELLANT WAS VERY SIMPLE TO BE VERIFIED AND WHICH DID NOT CALL FOR ANY PROLONGED I NVESTIGATION OR VERIFICATION. F) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.8 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASS ETS LEASED OUT TO STEELCAST LTD., WAS VERY SIMPLE WHERE THE ASSESSING OFFICER WAS NOT JUSTIFIE D IN DISALLOWING THE CLAIM OF THE APPELLANT ON THE GROUND THAT THE SUPPLIER M/S. ALANG MARINE H AS STATED THAT THEY HAD NOT SUPPLIED ANY MACHINERY TO THE APPELLANT. THE APPELLANT CONTENDED THAT THE TOTAL ITEMS OF MACHINE LEASED OUT TO M/S. STEELCAST LTD., WAS TO THE TUNE OF RS.9 ,20,979/-. SINCE M/S. ALANG MARINE, DURING THE ACCOUNTING YEAR, HAD SUPPLIED THE MACHINERY OF RS.4,03,071/- ONLY, IT IS LIKELY THAT THEY MAY NOT HAVE CONFIRMED THE AMOUNT OF THE SALE OF TH E TOTAL VALUE OF RS.9,20,979/-. THE APPELLANT FURNISHED A COPY OF THE LETTER FROM THE S UPPLIERS M/S. ALANG MARINES TO THE ASSESSING OFFICER WHICH CONFIRMED THAT IT HAD SOLD MACHINERY DURING THE ACCOUNTING YEAR VALUED AT RS.4,03,071/-, VIDE ITS INVOICE DATED 4.8 .93, WHICH WAS LEASED OUT TO M'S. STEELCAST LTD., BHAVNAGAR. IT WAS ALSO POINTED OUT THAT THE L ESSEE M/S. STEELCAST LTD., BY THEIR LETTER DATED 18.2.97 ADDRESSED TO THE ASSESSING OFFICER HA D CONFIRMED THAT THE ENTIRE MACHINERY OF THE VALUE OF RS.9,20,979/- HAS BEEN INSTALLED AT IT S PREMISES ON 25.9.93. THE EVIDENCES PRODUCED BY THE APPELLANT WAS VERY SIMPLE TO BE VER IFIED AND WHICH DID NOT CAL FOR ANY PROLONGED INVESTIGATION OR VERIFICATION, MORE PARTI CULARLY IN VIEW OF THE SPECIFIC EVIDENCE PRODUCED BY THE APPELLANT FROM THE LESSEE AS WELL A S FROM THE SUPPLIER AS INDICATED HEREINABOVE. G) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.9 AND 10 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO M/S. KONGARAR INTEGRATED LTD., WAS VERY SIMPLE IN SO FAR AS THE A SSESSING OFFICER HAS PROCEEDED TO DISALLOW THE CLAIM OF THE ASSESSEE SIMPLY ON THE WITHDRAWAL BY THE ASSESSEE OF THE CLAIM. SUCH WITHDRAWAL WAS MADE BY THE ASSESSEE PRESUMING THAT THE LESSEE DID NOT PUT THE MACHINERY IN QUESTION TO USE BY 31.3.94. HOWEVER, DURING THE COU RSE OF APPELLATE PROCEEDINGS THE ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 4 - APPELLANT HAD FURNISHED A COPY OF THE LETTER DATED 11.2.97 FROM M/S. KONGARAR INTEGRATED LTD., ADDRESSED TO THE ASSESSING OFFICER. IN THE SA ID LETTER, THE LESSEE HAD CONFIRMED THAT THE MACHINERY IN QUESTION HAD BEEN DELIVERED ON 19.3.94 AND 31.3.94. IT WAS ALSO EMPHASISED BY THE APPELLANT THAT THE LESSEE HAD ALSO STATED THAT THE DELIVERY OF THE MACHINERY WAS TAKEN BY THE LESSEE THROUGH A LOCAL LORRY OPERATOR BECAUSE T HE DISTANCE BETWEEN THE SUPPLIERS' PLACE WAS HARDLY ABOUT 65 KMS. SINCE THE MACHINERY WAS DE LIVERED TO THE LESSEE BY THE END OF THE ACCOUNTING PERIOD THE DISALLOWANCE OF DEPRECIATION WAS UNCALLED FOR. THE EVIDENCES FURNISHED BY THE ASSESSEE WAS VERY SIMPLE TO BE VER IFIED AND WHICH DID NOT CALL FOR ANY PROLONGED INVESTIGATION OR VERIFICATION. H) THAT THE ISSUE WITH REGARD TO THE DISALLOW ANCE OF DEPRECIATION AS DETAILED AT SR.NO.11 AND 12 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO M/S. AMRUIT INDUSTRIES LTD., WAS VERY SIMPLE IN SO FAR AS THE A PPELLANT, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WITHDREW THE CLAIM OF DEPRECIATION ON THE BASIS OF INCORRECT INFORMATION AND WITHOUT VERIFICATION OF THE COMPLETE RECORDS OF THE APPELLANT. IT WAS POINTED OUT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THAT THE INVOI CE FOR THE SALE OF MACHINERY TO THE LESSEE WAS DATED 2.9.93. IT ALSO FURNISHED A COPY OF THE C ONSIGNMENT NOTE DATED 2.9.93 WITH REGARD TO THE DELIVERY OF THE MACHINERY ALONG WITH A CERTI FICATE DATED 12.4.96 FROM THE LESSEE THAT THE MACHINERY IN QUESTION WAS INSTALLED AT THE PREMISES OF THE LESSEE ON 8.9.93. THE EVIDENCES PRODUCED BY THE APPELLANT WAS VERY SIMPLE TO BE VE RIFIED AND WHICH DID NOT CALL FOR ANY PROLONGED INVESTIGATION OR VERIFICATION. I) THAT THE ISSUE WITH REGARD TO THE DISALL OWANCE OF DEPRECIATION AS DETAILED AT SR.NO.13 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO IPCL WAS VERY SIMPLE IN SO FAR AS THERE WAS NO JUSTIFICATION FOR THE ASS ESSING OFFICER TO RESTRICT THE ALLOWANCE OF THE DEPRECIATION AT 50% OF THE AMOUNT OF DEPRECIATION A DMISSIBLE ON THE GROUND THAT THE MACHINERY IN QUESTION WAS USED FOR LESS THAN 180 D AYS. THE APPELLANT PRODUCED A COPY OF THE INVOICE DATED 29.8.93, AND IT IS VERY CLEAR THAT TH E MACHINERY IN QUESTION WAS USED FOR MORE THAN 180 DAYS. THE EVIDENCES PRODUCED BY THE APPELL ANT WAS VERY SIMPLE TO BE VERIFIED AND WHICH DID NOT CALL FOR ANY PROLONGED INVESTIGATION OR VERIFICATION. J) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.14 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO JAYANT PAPER MILLS LTD., WAS VERY SIMPLE IN SO FAR AS THE ASSESSING OF FICER DISALLOWED THE CLAIM OF DEPRECIATION ON THE BALANCE OF 3 ITEMS OF MACHINERY OF THE VALUE OF RS.27,73,631/-, WHICH WERE DENIED TO HAVE BEEN SUPPLIED BY SHRI A.G.DEO TO JAYANT PAPER MILLS LTD. THE APPELLANT POINTED OUT THAT THESE 3 ITEMS OF THE MACHINERY, OUT OF THE 5 I TEMS, HAVE BEEN PURCHASED FROM THE OTHER SUPPLIER. THIS CONTENTION WAS REJECTED BY THE ASSES SING OFFICER ON THE GROUND THAT THE NAME OF THE SUPPLIER GIVEN BY THE ASSESSEE WAS SHRI A.G. DEO IN RESPECT OF 5 ITEMS IN THE DEPRECIATION CHART. AS FOR THE ITEM OF MACHINERY I. E. AIRBUIJE CASTING UNIT COSTING RS.17,03,741/-, THE APPELLANT STATED THAT IT WAS MA DE UP OF 2 ITEMS - ONE ITEM COSTING RS.5,07,741/- SUPPLIED BY SHRI A.G.DEO AND ANOTHER ITEM COSTING RS.L1,96,000/- SUPPLIED BY M/S. BUSINESS FORMS LTD. IN SUPPORT OF ITS CONTENTI ON, THE APPELLANT FURNISHED COPIES OF THE INVOICE ISSUED BY SHRI A.G.DEO DATED 12.4.1993 AND M/S. BUSINESS FORMS LTD., DATED 17.5.1993. IT ALSO FURNISHED COPY OF THE CONSIGNMEN T NOTE DATED 16.5.1993 FROM GUJARAT ROADWAYS WITH REGARD TO THE TRANSPORTATION OF THE M ACHINERY PURCHASED FROM M/S. BUSINESS FORMS LTD. THE INVOICES ISSUED BOTH BY SHRI A.G.DEO AND M/S.BUSINESS FORMS LTD. REFER TO THE APPELLANT AS PURCHASER AND ALSO REFER TO M/S. J AYANT PAPER MILLS LTD., AS THE LESSEE. THE ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 5 - EVIDENCES FURNISHED WERE VERY SIMPLE TO BE VERIFIED WHICH DID NOT CALL FOR ANY DETAILED INVESTIGATION OR VERIFICATION. K) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.15 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF MARU TI CARS LEASED OUT TO M/S. LLOYDS STEEL INDUSTRIES LTD., WAS VERY SIMPLE IN SO FAR AS DURIN G THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT FURNISHED COPY OF THE INVOICE FROM MARUTI UDYOG LTD., ALONG WITH A COPIES OF THE GATE PASSES INDICATING INVOICE NO., DETAILS OF THE MOTOR CARDS SUPPLIED, CHASSIS NO., ETC. AFTER VERIFYING THIS CONTENTION THE LEARNED CIT(A) VIDE PARA 6.5.3.2. (PAGE 23) FOUND, AS A * MATTER OF FACT, THAT THE CONTENTION OF THE APPELLAN T IS IN ORDER AND THE DIFFERENCES WERE ONLY MINOR. THUS, THERE WAS NO JUSTIFICATION IN RESTORIN G THE MATTER FOR FURTHER VERIFICATION. L) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.16 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO UNIPLAS INDIA LTD., WAS SIMPLE IN SO FAR AS THE DEPRECIATION HAS BEEN D ISALLOWED ON THE GROUND MAT THE LESSEE HAD PUT THE SAID ASSET TO USE ON 31.3.93, WHICH FAL LS IN THE ACCOUNTING YEAR 1993-94. THE ASSESSING OFFICER HAS REJECTED THE ALTERNATIVE CLAI M OF THE ASSESSEE TO ALLOW THE DEPRECIATION FOR A. Y. 1993-94 ON THE GROUND THAT THE APPEAL FIL ED AGAINST THE ASSESSMENT ORDER FOR A.Y. 1993-94 IS PENDING BEFORE THE LEARNED C1T(A). HOWEV ER, THE ASSESSING OFFICER STATED THAT THE APPELLANT'S CLAIM MAT THE DEPRECIATION SHOULD BE AL LOWED IN A.Y. 93-94 APPEARS TO BE JUSTIFIED. WHEREAS THE APPELLANT, DURING THE COURSE OF APPELLATE PROCEEDINGS, CLAIMED THAT THOUGH THE ASSET WAS SUPPLIED ON 31.3.93 THE ASSESS EE HAS CLAIM THE DEPRECIATION DURING THE ACCOUNTING YEAR RELEVANT TO A.T. 94-95 ON THE GROUN D THAT IT HAD STARTED EARNING OF LEASE RENTAL IN RESPECT OF THE ASSETS IN QUESTION DURING THE ACCOUNTING PERIOD RELEVANT TO A.T. 94- 95. THESE CONTENTIONS OF THE APPELLANT WERE VERY SI MPLE TO BE VERIFIED AND WHICH DID NOT CALL FOR ANY DETAILED VERIFICATION OR INVESTIGATION. M) THAT THE ISSUE WITH REGARD TO THE DISALLOW ANCE OF DEPRECIATION AS DETAILED AT SR.NO.17 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS VIZ.COMPUTER SYSTEMS LEASED OUT TO IPCL VADODARA, WAS VERY SIMPLE IN SO FAR AS THE ASS ESSING OFFICER PROCEEDED TO DISALLOW THE DEPRECIATION ONLY ON THE GROUND THAT THERE WAS SOME DIFFERENCE IN THE FIGURES OF VALUE OF THE MACHINERY LEASED OUT. THE APPELLANT, DURING THE COU RSE OF APPELLATE PROCEEDINGS, PRODUCED THE CERTIFICATE FROM THE LESSEE DATED 30.4.99 WHERE IN HE HAD CONFIRMED THAT THE ASSETS, AS PER 9 DELIVERY CHALLANS HAD BEEN ACQUIRED BY THEM ON LE ASE BASIS FROM THE APPELLANT AND HAD BEEN DELIVERED BY THE LESSEE IN JUNE 93; AND THE TO TAL VALUE OF THE ASSETS AS PER 9 DELIVERY CHALLANS/INVOICES WORKS OUT TO RS.76,89,679/-. THE EVIDENCES PRODUCED BY THE APPELLANT WAS VERY SIMPLE TO BE VERIFIED AND WHICH DID NOT CALL F OR ANY PROLONGED INVESTIGATION OR VERIFICATION. N) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.18 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO MUDRA COMMUNICATION WAS VERY SIMPLE IN SO FAR AS THE ASSE SSING OFFICER HAS DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE LETTER ADDRE SSED TO THE SUPPLIER VIZ. STERLING COMPUTERS LTD., WAS RETURNED UNSERVED. NECESSARY EVIDENCE WAS PRODUCED BY THE APPELLANT VIZ. BILL/INVOICE ISSUED BY STERLING COMPUTERS LTD., IND ICATING THE NAME OF THE LESSEE I.E. MUDRA COMMUNICATIONS LTD. AFTER CONSIDERING THE CONTENTIO N OF THE APPELLANT THE LEARNED CLT(A) HAS FOUND, AS A MATTER OF FACT, THAT THE ASSESSING OFFICER WOULD HAVE MADE INQUIRY WITH MUDRA COMMUNICATIONS LTD., WHICH IS A WELL KNOWN CO NCERN LOCATED AT AHMEDABAD ITSELF, ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 6 - HAVING SO FOUND VIZ. THE EXISTENCE OF THE LESSEE AN D THE EVIDENCE IN THE FORM OF INVOICES ETC., THERE IS NO JUSTIFICATION IN RESTORING THE MATTER B EFORE THE ASSESSING OFFICER. O) THAT THE ISSUE WITH REGARD TO THE DISALLOW ANCE OF DEPRECIATION AS DETAILED AT SR.NO. 19 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO ABB LTD., AND NIIT LTD., WAS VERY SIMPLE IN SO FAR AS THE ASSESSING OF FICER HAS DISALLOWED THE CLAIM OF THE APPELLANT BECAUSE THE SUPPLIERS GANGA AUTOMOBILES D ID NOT FURNISH THE INFORMATION TO THE ASSESSING OFFICER AS DESIRED BY HIM. DURING THE COU RSE OF APPELLATE PROCEEDINGS IT WAS POINTED OUT THAT THE SAID GANGA AUTOMOBILES, BY THE IR LETTER DATED 20.2.97 ADDRESSED TO THE ASSESSING OFFICER, HAD STATED THAT THEY HAD NOT REC EIVED ANY FORMAL NOTICE FROM THE ASSESSING OFFICER REGARDING THE INQUIRIES BEING CONDUCTED BY HIM; AND THE ASSESSING OFFICER WAS SPECIFICALLY REQUESTED TO INFORM TO GANGA AUTOMOBIL ES TO FURNISH THE DETAILS AND THE INFORMATION REQUIRED BY HIM IN RESPECT OF MARUTI VE HICLES SUPPLIED BY GANGA AUTOMOBILES DURING THE FINANCIAL YEAR 93-94. DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS HIGHLIGHTED MAT IF GANGA AUTOMOBILES DID NOT FURNIS H THE INFORMATION TO THE ASSESSING OFFICER IT WAS BECAUSE OF VAGUE NATURE OF INQUIRY C ONDUCTED BY THE ASSESSING OFFICER. IT WAS ALSO POINTED OUT THAT THE LESSEES ARE WELL KNOWN CO MPANIES VIS.ABB LTD., AND NIIT LTD. IT WAS ALSO POINTED OUT THAT THE ASSESSEE HAD MADE PAYMENT TO GANGA AUTOMOBILES BY ACCOUNT PAYEE CHEQUES. HAVING ACCEPTED THESE FACTS, THERE W AS NO JUSTIFICATION FOR THE LEARNED CIT(A) TO RESTORE THE MATTER BACK TO THE ASSESSING OFFICER . P) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO. 20 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO WIPRO SYSTEM LTD., WAS TO SIMPLE IN SO FAR AS THE ASSESSING OFFICER PR OCEEDED TO DISALLOW THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE COMMUNICATIONS SENT BY HIM IS RETURNED UNSERVED. IT WAS CONTENDED THAT BOTH THE SUPPLIERS VIZ. DURGA PRASAD FURNITURE WORKS AND THE LESSEE WIPRO SYSTEMS LTD., ARE WELL-KNOWN COMPANIES. IT WAS ALSO POINTED OUT THAT THE APPELLANT HAD MADE THE PAYMENT BY ACCOUNT PAYEE CHEQUES. IN VIEW OF TH ESE EVIDENCES THERE IS NO JUSTIFICATION FOR THE LEARNED CIT(A) TO RESTORE THE MATTER TO THE ASS ESSING OFFICER AND DIRECTING HIM TO OBTAIN CONFIRMATION OF THE TRANSACTIONS MADE BY THE APPELL ANT WITH THE SUPPLIER AND THE LESSEE. THE ISSUE WAS VERY SIMPLE TO BE VERIFIED AND DID NOT CA LL FOR ANY PROLONGED INVESTIGATION. Q) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.21 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO GHCL WAS VERY SIMPLE IN SO FAR AS THE ASSESSING OFFICER HAS DISAL LOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE INQUIRY LETTER ADDRESSED BY THE ASS ESSING OFFICER WAS RETURNED UNSERVED. AS AGAINST THIS, THE ASSESSEE PRODUCED THE SUPPORTING BILLS BY WHICH THE MACHINERY IN QUESTION WAS PURCHASED, AND THE PAYMENTS MADE BY ACCOUNT PAY EE CHEQUES. THE LESSEE HAD ALSO GIVEN CERTIFICATE DATED 21.2.97 TO THE EFFECT THAT THE MA CHINERY HAS BEEN DELIVERED TO GHCL ON 1.4.93 AND IT HAS BEEN PUT TO USE BY THE LESSEE. TH E EVIDENCES PRODUCED BY THE APPELLANT WAS VERY SIMPLE TO BE VERIFIED AND WHICH DID NOT CALL F OR ANY PROLONGED INVESTIGATION OR VERIFICATION. R) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.22 OF ANNEXURE-A ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO APPAREL GARMENT LTD., WAS VERY SIMPLE IN SO FAR AS THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE INQUIRY LETTERS ADDRESSED TO THE LE SSEE WERE RETURNED UNSERVED. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE PRODU CED THE CERTIFICATE FROM THE LESSEE TO THE EFFECT THAT THE MACHINERY LEASED OUT TO IT HAS BEEN PUT TO USE ON 20.3.94, AND THE PAYMENTS ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 7 - WERE MADE BY ACCOUNT PAYEE CHEQUES. THE EVIDENCES P RODUCED BY THE APPELLANT WAS VERY SIMPLE TO BE VERIFIED AND WHICH DID NOT CALL FOR AN Y PROLONGED INVESTIGATION OR VERIFICATION. S) THAT THE ISSUE WITH REGARD TO THE DISALLO WANCE OF DEPRECIATION AS DETAILED AT SR.NO.23, 24, 25, 26, 27, 28, 29 AND 30 OF ANNEXURE-A ENCLOSE D HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO THE VARIOUS PARTIES AS MENTIONED IN ANNEXURE -A ENCLOSED HEREWITH, WAS VERY SIMPLE IN SO FAR AS THE DISALLOWANCE WAS MADE ON THE GROUND T HAT ON INQUIRIES CONDUCTED EITHER THE LESSEE OR THE SUPPLIER DID NOT COMPLY WITH THE INQU IRY LETTERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THOUGH THE ASSESSING OFFICER CONSIDERE D THAT THE PURCHASE CONSIDERATIONS OF THE ASSETS AS WELL AS LEASE RENTAL OF THE ASSETS HAVE B EEN PAID/RECEIVED BY ACCOUNT PAYEE CHEQUES OR DEMAND DRAFTS, HE FELT THAT THE ONUS STILL LAY T O ESTABLISH THAT THE ASSETS HAD BEEN PURCHASED BY IT AS ALSO LEASED OUT BY IT DURING THE YEAR UNDE R CONSIDERATION. IN THE COURSE OF APPELLATE PROCEEDINGS, IT WAS MENTIONED THAT SINCE THE LETTER S OF INQUIRIES WERE SERVED ON THE PARTIES, THE GENUINENESS OF THE PARTIES IN QUESTION IS ESTAB LISHED. SINCE, SO FAR AS THE ASSESSEE IS CONCERNED IT HAS ESTABLISHED THAT THE ASSESSEE HAS RECEIVED THE LEASE RENTAL AND THAT THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES, THERE WAS NO JUSTIFICATION FOR SUCH DISALLOWANCE. THE ISSUE INVOLVED WAS SIMPLE AND DID NOT CALL FOR ANY PROLONGED INVESTIGATION OR VERIFICATION. THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION FOR RESTORING THE ISSUES REGARDING THE CLAIM OF DEPRECI ATION DETAILED IN ANNEXURE-A ENCLOSED HEREWITH TO THE ASSESSING OFFICER, WHICH OUGHT TO H AVE BEEN DIRECTED TO BE ALLOWED AND DIRECT THE ASSESSING OFFICER TO GRANT THE DEDUCTION FOR TH E DEPRECIATION CLAIMED. 2. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED. CIT(A) HAS GROSSLY ERRED IN RESTORING THE MATTER TO THE ASSESSING OFFICER IN RESPECT OF THE ADMISSIBLE DEDUCTION OF DEPRECIATION AGGREGATING TO RS.3,94,32,516/- (WRONGLY SUMMARISED TO RS.3,97,34,254/- IN PARA 6.8 OF THE APPELLATE OR DER) IN AGGREGATE IN AGGREGATE IN RESPECT OF THE ADMISSIBLE DEPRECIATION ON THE SALE AND LEASE B ACK TRANSACTIONS AS DETAILED IN ANNEXURE- B ENCLOSED HEREWITH, WHEN HE OUGHT TO HAVE DIRECTED TO GRANT SUCH DEPRECIATION. IN NOT DOING SO HE HAS FAILED TO APPRECIATE THAT ON A SIMILAR IS SUE THE LEARNED CIT(A) HAS ALREADY GRANTED RELIEF FOR THE ADMISSIBLE DEDUCTION OF DEPRECIATION ON THE TRANSACTIONS INVOLVING SALE AND LEASE BACK IN THE APPELLATE ORDER FOR A.Y, 1993-94, AND THEREFORE, THERE IS NO JUSTIFICATION FOR DEVIATION FROM THE EARLIER DECISION. THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION FOR RESTORING MATTER OF ADMISSIBLE DEDUCTION OF RS.3,94 ,32,816/-IN RESPECT OF THE MACHINERY LEASED OUT UNDER THE SALE AND LEASE BACK AGREEMENTS AND IT OUGHT TO HAVE BEEN DIRECTED TO BE ALLOWED, AND THE ASSESSING OFFICER MAY BE DIRECTED ACCORDINGLY. 3. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED. CIT(A) HAS GROSSLY ERRED IN RESTORING THE MATTER TO THE ASSESSING OFFICER IN RESPECT OF THE CLAIM OF DEPRECIATION U/S.132 OF THE INCOME-TAX ACT , TO THE EXTENT OF RS.7,29,03,977/- IN AGGREGATE ON THE ITEMS OF THE ASSETS GIVEN ON LEASE AS DETAILED IN ANNEXURE-C ENCLOSED HEREWITH WHEN HE OUGHT TO HAVE DIRECTED TO GRANT TH E DEPRECIATION, HI NOT DOING SO, HE HAS FAILED TO APPRECIATE THE FACTS MAT IN RESPECT OF A SIMILAR CLAIM FOR A. Y. 1993-94, THE LEARNED CIT(A) WAS PLEASED TO GRANT RELIEF OF THE ADMISSIBL E DEPRECIATION TO THE APPELLANT AS CLAIMED AS THE ASSETS WERE USED FOR THE PURPOSE OF THE ASSE SSEE'S BUSINESS. THE SIMILAR EVIDENCES HAVE BEEN PRODUCED BY THE APPELLANT THIS YEAR AS DURING THAT ASSESSMENT YEAR, I.E. A.Y. 93-94. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 8 - THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION FOR RESTORING MATTER OF ADMISSIBLE DEPRECIATION AS DETA ILED IN ANNEXURE-C ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT, BUT IT OUGHT TO H AVE BEEN DIRECTED TO BE ALLOWED, AND THE ASSESSING OFFICER MAY BE DIRECTED ACCORDINGLY. 4. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE DISALLOW ANCE OF DEPRECIATION IN RESPECT OF THE CLAIM OF DEPRECIATION ON THE ITEMS OF ASSETS LEASED OUT BY THE APPELLANT TO THE VARIOUS PARTIES AS DETAILED IN ANNEXURE-D ENCLOSED HEREWITH. A) SO FAR AS THE DEPRECIATION IN RESPECT OF THE ASSETS AT SR.NO. 1 OF ANNEXURE-D ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO VE NKATESHWARA HATCHERIES LEARNED CIT(A) HAS DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE OWNERSHIP OF THE MACHINERY INVOLVED IS THAT OF VANKATESHWARA HATCHERIES, AND T HEREFORE, THE APPELLANT WOULD NOT BE ENTITLED TO THE DEPRECIATION. HE HAS FAILED TO APPR ECIATE THAT THE APPELLANT HAS RECEIVED LEASE RENTAL IN RESPECT OF THIS SAME ASSET WHICH IS SUBJE CTED TO TAX BY THE ASSESSING OFFICER, AND THEREFORE, THERE IS NO JUSTIFICATION IN HOLDING THA T THE ASSESSEE HAS NOT LEASED OUT THE MACHINERY IN QUESTION. B) THAT WITH REGARD TO THE DISALLOWANCE OF DE PRECIATION AS DETAILED AT SR.NO.2 OF ANNEXURE-D ENCLOSED HEREWITH, IN RESPECT OF THE ASS ETS LEASED OUT TO AGRITECH HATCHERIES LTD., THERE IS NO JUSTIFICATION IN BEING LED AWAY B Y THE STATEMENT REFERRED TO IN THE APPELLATE ORDER (PARA 6.4.3). C) THAT WITH REGARD TO THE DISALLOWANCE OF D EPRECIATION AS DETAILED AT SR.NO.3 OF ANNEXURE-D ENCLOSED HEREWITH, IN RESPECT OF THE ASS ETS LEASED OUT TO ALOK TEXTILES LTD., THERE IS NO JUSTIFICATION FOR DISALLOWING THE SAME ALTOGE THER ON AN ANOTHER GROUND THAN THAT TAKEN BY THE ASSESSING OFFICER. D) THAT WITH REGARD TO THE DISALLOWANCE OF DE PRECIATION AS DETAILED AT SR.NO.4 OF ANNEXURE-D ENCLOSED HEREWITH, IN RESPECT OF THE ASS ETS LEASED OUT TO INDO NISSAN OXO LTD., THERE IS NO JUSTIFICATION FOR DISALLOWING THE SAME ALTOGETHER ON AN ANOTHER GROUND THAN THAT TAKEN BY THE ASSESSING OFFICER. E) THAT WITH REGARD TO THE DISALLOWANCE OF D EPRECIATION AS DETAILED AT SR.NO.5, 6, 7, 8, 9 AND 10 OF ANNEXURE-D ENCLOSED HEREWITH, IN RESPECT OF THE ASSETS LEASED OUT TO VARIOUS PARTIES THERE IS NO JUSTIFICATION FOR DISALLOWING T HE SAME ALTOGETHER ON AN ANOTHER GROUND THAN THAT TAKEN BY THE ASSESSING OFFICER. THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THE APPELLANT IS ENTITLED TO THE DEPRECIATION AS DETAILED IN ANNEXURE-D ENCLOSED HER EWITH, AND DIRECT THE ASSESSING OFFICER ACCORDINGLY. 5. IN LAW AND IN THE FACTS AS WELL AS THE CIRC UMSTANCE OF THE APPELLANT'S CASE, THE LEARNED, CIT(A) HAS GROSSLY ERRED IN NOT CONSIDERING THE CLA IM OF THE APPELLANT THAT FOR THE ASSETS MENTIONED IN ANNEXURE-E. THE CIT(A) OUGHT TO HAVE S ET ASIDE FOR VERIFICATION THE CLAIM OF THE APPELLANT REGARDING THE DEPRECIATION TO MEET THE EN DS OF JUSTICE. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 9 - 6. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE TEAMED. CIT(A) HAS GROSSLY ERRED IN RESTORING THE MATTER TO THE ASSESSING OFFICER WITH REGARD TO THE DEDUCTION OF RS.4,22,656/- BEING THE PAYMENT OF SAL ES-TAX, WHEN HE OUGHT TO HAVE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN NOT DOING SO HE HAS FAILED TO APPRECIATE THAT THE PAYMENT OF SALES-TAX IN QUESTION WERE MADE BY A CCOUNT PAYEE CHEQUE, AND IF THERE IS A DELAY IN CLEARING THE SAME BY THE BANKERS, IT IS NO NE OF THE FAULT OF THE APPELLANT. THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION FOR DISALLOWING THE CLAIM OF DEDUCTION FOR THE PAYMENT OF SALES-TAX BEFORE THE DUE DATE, WHEN SUCH PAYMENT WAS MADE BY ACCOUNT PAYEE CHEQUE, AND DIRECT THE DELETION OF RS.4,22,656/-. 7. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN RESTORING THE MATTER WI TH REGARD TO THE TAXABILITY OF THE CAPITAL GAIN ON TRANSFER OF THE SHARES OF THE SUBSIDIARY CO MPANY, WHEN HE OUGHT TO HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. IN NOT DOIN G SO, HE HAS FAILED TO APPRECIATE THAT THE APPELLANT HAS CONCLUSIVELY ESTABLISHED THAT THE SHA RES IN QUESTION WERE SOLD TO THE SUBSIDIARY COMPANY WHOLLY OWNED BY THE ASSESSEE. THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION FOR RESTORING THE MATTER WITH REGARD TO THE TAXABILITY OF THE CAPITAL GAIN ON TRANSFER OF SHARES TO THE SUBSIDIARY COMPANY, AND DIRECT THE DELETION OF RS. 1,20,83,000/-. 8. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED. CIT(A) HAS GROSSLY ERRED IN RESTORING THE MATTER TO THE ASSESSING OFFICER WITH REGARD TO THE DISALLOWANCE OF RS.28,88,000/- IN RESPECT OF THE DE DUCTION U/S.80-M OF ME INCOME-TAX ACT, WHEN HE OUGHT TO HAVE HELD THAT SUCH DISALLOWANCE W AS NOT CALLED FOR. THIS HONBLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION IN UPHOLDING THE RESTRICTION OF THE DEDUCTION U/S.80-M OF THE INCOME-TAX ACT AND DISALLOWING RS.28,88,000/-, AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF AFORESAID DEDUCTION AS CLAIMED BY THE APPELLANT. 9. IN LAW AND IN THE FACTS AS WELL AS THE CI RCUMSTANCE OF THE APPELLANT'S CASE, THE LEARNED. CIT(A) HAS GROSSLY ERRED IN HOLDING THAT NO APPEAL RYES AGAINST THE LEVY OF INTEREST U/S.234B OF THE INCOME-TAX ACT, WHEN SUCH APPEAL RYES AGAINS T SUCH LEVY OF INTEREST WHEN THE ASSESSEE HAS OBJECTED TO THE VERY LEVY OF INTEREST AND THAT NO SUCH INTEREST WAS LEVIABLE. THIS HON'BLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE WAS NO JUSTIFICATION FOR UPHOLDING THAT NO APPEAL LYES AGAINST SUCH LEVY OF INTEREST AND THAT NO SUCH INTEREST IS LEVIABLE, AND DIRECT THE ASSESSING OFFICER TO DELET E THE INTEREST CHARGED. 10. IN LAW AND IN THE FACTS AS WELL US THE CIRCU MSTANCE OF THE APPELLANT'S CASE, THE LEARNED. CIT(A) HAS GROSSLY FAILED TO DECIDE ON THE ISSUE OF INITIATION OF PENALTY U/S.271(L)(C) BY THE ASSESSING OFFICER. 2.1. AT THE OUTSET, LD.SR.COUNSEL FOR THE APPELLANT -COMPANY SHRI S.N.SOPARKAR PLACED A CHART ON RECORD AND SUBMITTED THAT UNDER THE ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 10 - INSTRUCTIONS OF THE APPELLANT-COMPANY, HE DOES NOT WISH TO PRESS GROUND NOS.1(A) TO 1(S), 2,3,6,7 & 8 AND IN RESPECT OF GR OUND NOS.9 & 10 ARE PREMATURE. HE SUBMITTED THAT HE WOULD LIMIT HIS AR GUMENTS IN RESPECT OF GROUND NOS.4 & 5 ONLY. THE LD.CIT-DR HAS NO OBJECT ION TO THE SUBMISSIONS MADE BY THE LD.SR.COUNSEL FOR THE ASSES SEE. IN VIEW OF THE SUBMISSIONS OF THE LD.SR.COUNSEL FOR THE APPELLANT- COMPANY, GROUND NOS.1(A) TO 1(S), 2,3,6,7 & 8 ARE DISMISSED AS NOT PRESSED AND GROUND NO.9 & 10 ARE REJECTED BEING PREMATURE. NOW, ONLY GROUND NOS.4 & 5 REMAIN FOR ADJUDICATION. 3. GROUND NO.4 IS AGAINST THE CONFIRMATION OF DISA LLOWANCES OF DEPRECIATION IN RESPECT OF LEASED OUT ON THE ASSETS TO VARIOUS PARTIES. THE ASSESSEE HAS ALSO FILED CONCISED GROUNDS OF APPEAL ON THIS ISSUE. 3.1. THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED T HAT AS PER THE ENCLOSURE-D TO THE CONCISED GROUNDS, THERE ARE 10 L ESSEES TO WHOM THE ASSETS HAD BEEN GIVEN BY THE ASSESSEE AND CLAIMED D EPRECIATION. HE SUBMITTED THAT TOTAL DEPRECIATION DISALLOWED AS PER CHART WAS RS.30,66,182/-. THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN RESPECT OF ASSESSEES CLAIM OF DEPRECIATION MENTION ED AT SL.NOS.2 TO 10, HE DOES NOT WISH TO PRESS THE SAME. LD.CIT-DR HAS NO OBJECTION. THEREFORE THE ASSESSEES CLAIM FOR DEPRECIATION MEN TIONED AT SL.NOS.2 TO 10 IS DISMISSED AS NOT PRESSED. LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED SO FAR AS THE ASSETS LEASED TO M/S.VENKETASHWAR HAT CHERIES IS CONCERNED, IT IS A VEHICLE GIVEN AND REGISTRATION THEREOF, IS IN THE NAME OF ASSESSEE. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 11 - HE SUBMITTED THAT DEPRECIATION DISALLOWED ON THE BA SIS THAT THE ASSESSEE DID NOT OWN THE VEHICLE. HE SUBMITTED THAT THE ISS UE IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX COURT RENDERED IN T HE CASE OF I.C.D.S. LTD. VS. CIT AND ANOTHER REPORTED AT (2013) 350 IT R 527 (SC). THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE P RESUMPTION OF OWNERSHIP IS NOT AFFECTED UNDER THE MOTOR VEHICLE A CT. HE SUBMITTED THAT AS PER LEGAL FRICTION OF OWNERSHIP U/S.32 OF T HE ACT, THE ASSESSEE IS ENTITLED FOR DEPRECIATION. ON THE CONTRARY, LD.CIT -DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CONTENTION OF LD.SR.COUNSEL FOR THE ASSESSEE IS THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX C OURT RENDERED IN THE CASE OF I.C.D.S. LTD. VS. CIT AND ANOTHER REPORTED AT (2013) 350 ITR 527 (SC). THE HONBLE APEX COURT IN THE SAID CASE HAS HELD AS UNDER:- 29. THEREFORE, IN THE FACTS OF THE PRESENT CASE, W E HOLD THAT THE LESSOR I.E. THE ASSESSEE IS THE OWNER OF THE VEHICLES. AS THE OWNER, IT USED THE ASSETS IN THE COURSE OF ITS BUSINESS, SATISFYING BO TH REQUIREMENTS OF SECTION 32 OF THE ACT AND HENCE, IS ENTITLED TO CLA IM DEPRECIATION IN RESPECT OF ADDITIONS MADE TO THE TRUCKS, WHICH WERE LEASED OUT. 30. WITH REGARD TO THE CLAIM OF THE ASSESSEE FOR A HIGHER RATE OF DEPRECIATION, THE IMPORT OF THE SAME TERM 'PURPOSES OF BUSINESS', USED IN THE SECOND PROVISO TO SECTION 32(1) OF THE ACT G AINS SIGNIFICANCE. WE ARE OF THE VIEW THAT THE INTERPRETATION OF THESE WO RDS WOULD NOT BE ANY DIFFERENT FROM THAT WHICH WE ASCRIBED TO THEM EARLI ER, UNDER SECTION 32 (1) OF THE ACT. THEREFORE, THE ASSESSEE FULFILLS EV EN THE REQUIREMENTS FOR ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 12 - A CLAIM OF A HIGHER RATE OF DEPRECIATION, AND HENCE IS ENTITLED TO THE SAME. 4.1. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF I.C.D.S. LTD. VS. CIT AND ANO THER (SUPRA), THE CLAIM OF THE ASSESSEE IS HEREBY ALLOWED AND THE AO IS DIR ECTED TO ALLOW THE CLAIM OF DEPRECIATION AMOUNTING TO RS.1,99,000/-. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 5. IN RESPECT OF GROUND NO.5 OF ASSESSEES APPEAL, DURING THE COURSE OF HEARING, LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTE D THAT HE DOES NOT WISH TO PRESS THIS GROUND OF APPEAL. THE LD.CIT-DR HAS NO OBJECTION. THEREFORE, GROUND NO.5 OF ASSESSEES APPEAL IS DISM ISSED AS NOT PRESSED. 6. IN THE RESULT, ASSESSEES APPEAL, I.E. ITA NO.16 77/AHD/1999 FOR AY 1994-95 IS PARTLY ALLOWED. 7. NOW, WE TAKE UP THE REVENUES APPEAL IN ITA NO.1 742/AHD/1999 FOR AY 1994-95. THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCES OF RS.70,08,428/- MADE ON ACCOUNT OF BAD DEBTS. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DIRECTIN G TO VERIFY THE SHARE HOLDINGS OF ASSESSEE COMPANY IN THE SUBSIDIAR Y COMPANY AS THE ASSESSING OFFICER HAS ALREADY DEALT WITH THE SA ME IN THE ASSESSMENT ORDER. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 13 - 3. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPR ECIATING THE ASSESSING OFFICERS ALTERNATIVE CLAIM THAT THE INCO ME OF RS.1,20,83,000/- CANNOT BE TAXED U/S.10(3) OF THE I .T.ACT. 4. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLD ING THAT IN THE CASE OF LEASING COMPANY ONCE THE ASSET HAS BEEN DEL IVERED BY WAY OF LEASING THE LESSEE AND LEASE RET HAS STARTED THE SAID ASSET SHOULD BE DEEMED TO HAVE BEEN USED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE FOR DEPRECIATION. 5. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE DEPRECIATION PURPOSES, AS DETAILED BELOW: A) TOBACCO PROCESSING MACHINE SUPPLIED BY JOHN FOWLER RS.3,03,997/- B) COMPUTER LAMINATORS LEASED TO J.B.MANGARM FOODS RS.2,96,990/- C) FIRE HYDRENT SYSTEM LEASED TO USHA INDIA RS.10,66,092/- D)INJECTION MODULES LEASED TO M/S.REPL RS.29,99,940 /- E) COMMERCIAL VEHICLES LEASED TO ESSAR GUJARAT RS.3,02,906/- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.DCIT(A)/CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.DC IT(A)/CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER FO THE A.O. BE REST ORED TO THE ABOVE EXTENT. F) EVAPORATOR PLANT LEASED TO BALLASPUR INDUSTRIES RS.23,25,000/- G) ASSETS SUPPLIED BY MAHARASHTRA TURNKEY PROJECT RS.49,42,528/- H) ASSETS SUPPLIED BY CHIRNA RS.50,11,3 13/- I) ASSETS LEASED TO ESSAR GUJARAT RS.1 ,88,933/- 6. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DIRE CTING TO WORK OUT THE AMOUNT COMPRISED IN THE LEASE RENTALS WHICH RELATES TO INTEREST & FINANCE CHARGES IN RESPECT OF THE ASSETS ON WHICH E ITHER THE ASSESSEE ITSELF HAS WITHDRAWN THE CLAIM OF DEPRECIATION OR I TS CLAIM OF DEPRECIATION HAS BEEN DISALLOWED AND INCLUDE ONLY S UCH AMOUNT IN THE ASSESSEES TOTAL INCOME. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 14 - 7. THE LD.CIT(A) HAS ERRED IN LAW ON FACTS IN DIRE CTING TO ALLOW DEPRECIATION, IN RESPECT OF ASSETS WHICH ARE FALLIN G UNDER SALE AND LEASE BACK TRANSACTION. 8. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT LEASING COMPANY CAN CLAIM OF DEPRECIATION ON ASSETS WHICH M AY NOT BE FULL MACHINE AS SUCH BY IGNORING THE FACT THAT THE ASSET IS PARTLY OWNED. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 10. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICE R BE RESTORED TO THE ABOVE EXTENT. 8. GROUND NO.1 IS AGAINST THE DELETION OF BAD DEBT AMOUNTING TO RS.70,08,428/-. THE LD.CIT-DR SUPPORTED THE ASSESS MENT ORDER. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF TRF LTD. VS. CIT REPORTED AT (2010) 323 ITR 397 (SC). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAD DISALLOWED THE BAD DEBT CLA IMED BY THE ASSESSEE ON THE BASIS THAT THE ASSESSEE IS LEGALLY BOUND TO PROVE THAT THE DEBT HAD BECOME BAD. WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF TRF LTD.(SUPRA) HAS HELD THAT THE POSITION IN LAW IS WELL SETTLED. AFTER APRIL 1, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTAB LISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF TH E BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE . ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 15 - 9.1. RESPECTFULLY FOLLOWING THE RATIO OF HONBLE AP EX COURT IN THE CASE OF TRF LTD.(SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, THIS G ROUND OF REVENUES APPEAL IS DISMISSED. 10. GROUND NO.2 IS AGAINST THE DIRECTION TO VERIFY THE SHARE-HOLDING OF THE ASSESSEE-COMPANY IN THE SUBSIDIARY COMPANY. TH E LD.CIT-DR SUBMITTED THAT THE LD.CIT(A) IS NOT JUSTIFIED IN IS SUING SUCH DIRECTIONS. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE LD.CIT(A) IN HIS ORDER HAS OBSERVED THAT THE ACCOUN TING PERIOD OF THE SUBSIDIARY COMPANY, I.E. GLFL SECURITIES LTD. WAS T HE PERIOD OF 12 MONTHS FROM 01.01.1994 TO 31.12.1994 AND THE AUDITO RS REPORT TO ANNUAL ACCOUNTS OF THE SUBSIDIARY COMPANY STATES TH AT THE ACCOUNTS OF THE COMPANY HAVE BEEN AUDITED FOR THE PERIOD 07.12.1993 TO 31.12.1994. THE AO HAS NOT ASCERTAINED AS WHAT IS HOLDING OF 10 0% SHARES IN THE SUBSIDIARY COMPANY IN THE YEAR OF 1994. THE LD.CIT (A) OBSERVED THAT THE CERTIFICATE GIVEN BY GLFL SECURITIES LTD. WITH REGA RD TO ITS ISSUED CAPITAL AS ALSO SUBSCRIBED AND PAID UP CAPITALS AS ON 31.03 .1994 AS ALSO THE COPY OF THE RETURN OF ALLOTMENT (OF SHARES) FURNISHED BY THE SUBSIDIARY COMPANY WITH THE REGISTRAR OF COMPANIES ON 17/05/19 94, WERE NOT AVAILABLE WITH THE AO. THEREFORE, HE GAVE DIRECTIO N TO VERIFY THE SAME. THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT U NDER THESE FACTS, THE REVENUE OUGHT NOT TO HAVE ANY GRIEVANCE SINCE NO SP ECIFIC RELIEF IS GRANTED TO THE ASSESSEE BY THE LD.CIT(A). ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 16 - 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE F ACTS OF THE CASE. WE FIND THAT THE LD.CIT(A) HAS ONLY GIVEN DIRECTION TO VERIFY THE FACTUM OF HOLDING OF SHARES, SINCE THE COPY OF THE RETURN OF ALLOTMENT (OF SHARES) FURNISHED BY THE SUBSIDIARY COMPANY WITH THE REGIST RAR OF COMPANIES ON 17/05/1994 WAS NOT AVAILABLE WITH THE AO. UNDER TH ESE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), T HE SAME IS HEREBY UPHELD. THUS, THIS GROUND OF REVENUES APPEAL IS R EJECTED. 12. GROUND NOD.3 IS IN RESPECT OF ALTERNATE CLAIM O F THE AO THAT THE AMOUNT OF RS.1,20,83,000/- CAN BE TAXED U/S.10(3) O F THE I.T.ACT. THE LD.CIT-DR SUBMITTED THAT THE AO HAD RESERVED RIGHT TO MAKE ADDITION U/S.10(3) OF THE ACT. HE SUBMITTED THAT THE LD.CIT( A) FAILED TO APPRECIATE THIS FACT. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSEE SHRI S.N.SOPARKAR SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. D.P.SANDU BROS. CHEMBUR P.LTD.(273 ITR 01). 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) VIDE PARA-4.5 OF HIS ORD ER HAS CONSIDERED THE ALTERNATE PLEA OF THE AO AND RELIED ON THE DECISION OF HONBLE CALCUTTA HIGH COURT AS RELIED UPON BY THE ASSESSEE IN THE CA SE OF B.K.ROY PVT.LTD. VS. CIT (1995) 211 ITR 500. MOREOVER, THE HONBLE APEX COURT IN THE CASE OF CIT VS. D.P.SANDU BROS.(SUPRA) HAS HELD THA T THE ARGUMENT OF THE ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 17 - APPELLANT THAT EVEN IF THE INCOME CANNOT BE CHARGEA BLE UNDER SECTION 45, BECAUSE OF THE INAPPLICABILITY OF THE COMPUTATION P ROVIDED U/S.48, IT COULD STILL IMPOSE TAX UNDER THE RESIDUARY HEAD IS THUS UNACCEPTABLE. IF THE INCOME CANNOT BE TAXED U/S.45, IT CANNOT BE TAX ED AT ALL. IN VIEW OF THE JUDGEMENT OF THE HONBLE APEX COURT AND THE JUD GEMENT OF HONBLE CALCUTTA HIGH COURT, WE DO NOT FIND ANY INFIRMITY I N THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, THIS G ROUND OF REVENUES APPEAL IS DISMISSED. 14. GROUND NO.4 IS AGAINST THE FINDING OF THE LD.CI T(A) THAT IN THE CASES OF LEASING COMPANY ONCE THE ASSET HAS BEEN DE LIVERED BY WAY OF LEASING THE ASSET AND THE LEASE RENT HAS STARTED TH E SAID ASSET SHOULD BE DEEMED TO HAVE BEEN USED FOR THE PURPOSE OF THE BUS INESS OF THE ASSESSEE FOR DEPRECIATION. THE LD.CIT-DR SUPPORTED THE ASSE SSMENT ORDER AND SUBMITTED THAT THE LD.CIT(A) IS NOT JUSTIFIED IN HO LDING THAT IN THE CASES OF LEASING COMPANY ONCE THE ASSET HAS BEEN DELIVERED B Y WAY OF LEASING THE ASSET AND THE LEASE RENT HAS STARTED THE SAID ASSET SHOULD BE DEEMED TO HAVE BEEN USED FOR THE PURPOSE OF THE BUSINESS OF T HE ASSESSEE FOR DEPRECIATION. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN RESPECT OF THE FINDING OF THE LD.CIT(A), H E HAS FOLLOWED THE DECISION OF THE TRIBUNAL (ITAT C BENCH AHMEDABAD) IN ASSESSEES OWN CASE FOR AY 1993-94 IN ITA NO.1314/AHD/1999 & 1 327/AHD/1999 (CROSS-APPEALS), DATED 25/01/2008. HE SUBMITTED TH AT EVEN OTHERWISE ALSO, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 18 - JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF C IT VS. PINNACLE FINANCE LTD. (268 ITR 395). 15. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE HONBLE COORDINATE BENCH IN ASSESS EES OWN CASE IN ITA NO.1314/AHD/1999 & ITA NO.1327/AHD/1999(SUPRA) VIDE PARA-3 HAS HELD THAT THE ASSESSEE HAS BEEN ABLE TO DEMONST RATE OWNERSHIP OF ASSETS, GENUINENESS OF LEASE TRANSACTION, USER OF L EASED ASSETS FOR THE PURPOSE OF LEASING BUSINESS OF THE ASSESSEE BY EARN ING LEASE RENTALS, WHICH ARE ACCEPTED BY THE AO BY TAXING THE SAME AND FOLLOWING THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PINNACLE FINANCE LTD.(SUPRA), DISMISSED THE GROUND OF THE REVENUE. THEREFORE, TAKING A CONSISTENT VIEW AND RESPECTFULLY FOLLOWING THE RATI O LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PINNACLE FINANCE LTD.(SUPRA), WE DISMISS THIS GROUND OF REVENUES APPEAL. 16. GROUND NOS.5(A) TO 5 (I) ARE AGAINST THE DELETI ON OF DISALLOWANCES OF DEPRECIATION. THE LD.CIT-DR SUPPORTED THE ORDER OF AO. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSEE SHRI S.N .SOPARKAR SUPPORTED THE ORDER OF THE LD.CIT(A). HE DREW OUR ATTENTION TOWA RDS THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE LD.CIT(A) HAS GI VEN FINDING ON FACT ON EACH ITEM AND PRAYED THAT FINDING OF LD.CIT(A) IS J USTIFIED AND THE SAME BE CONFIRMED. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 19 - 17. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IN RESPECT OF GROUND NO.5(A) THE LD.CI T(A) HAS DISCUSSED THE ISSUE IN PARA 6.4 OF HIS ORDER AND GIVEN FINDING ON FACT IN PARA 6.4.2. THE LD.CIT(A) HAS GIVEN A FINDING THAT HE HAD GONE THRO UGH THE COPIES OF INVOICES ISSUED BY JOHN FOWLERS (INDIA) LTD. AND AC CEPTED THE EXPLANATION GIVEN BY THE ASSESSEE. IN VIEW OF THE FINDING OF THE LD.CIT(A) AND THE REVENUE HAS NOT PLACED ANY CONTRA RY MATERIAL ON RECORD, WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE LD.CIT(A), THE SAME IS HEREBY UPHELD ON THIS ISSUE. 17.1. IN RESPECT OF GROUND NOS.5(B) TO 5(I) THE SAM E ARGUMENTS HAVE BEEN ADVANCED BY THE PARTIES. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IN RESPECT OF GROUND NOS.5(B) TO 5(I), THE LD.CIT(A) HAS MADE DECISION IN PARA 6.5.2 OF HIS ORDER. SINCE T HE LD.CIT(A) HAS GIVEN FINDING ON FACT FOR ALL THESE ITEMS AND REVEN UE HAS NOT CONTROVERTED BY PLACING CONTRARY MATERIAL ON RECORD , THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A). THUS, GROUND NOS.5(A) TO 5(I) OF REVENUES APPEAL ARE DISMISSED. 19. GROUND NO.6 IS AGAINST THE DIRECTION OF LD.CIT( A) TO TAX INTEREST COMPONENT OF LEASE RENTALS WHEREVER DEPRECIATION IS NOT ADMISSIBLE. THE LD.CIT-DR SUPPORTED THE ORDER OF THE AO. ON THE C ONTRARY, ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 20 - LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS EXAMINED THIS ISSUE IN HIS ORDER IN PARA 6.11.2 AND HAS GIVE N A FINDING IN PARA 6.11.3 OF HIS ORDER. HE SUBMITTED THAT THE ISSUE I S DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE COORDINATE BENCH IN ITA NO.1314/AHD/1999 AND ITA NO.1327/AHD/1999(SUPRA). 19.1. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE I N HIS ORDER VIDE PARA 6.11.3, BY OBSERVING AS UNDER: 6.11.3 I HAVE CONSIDERED THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE APPELLANT AND THE COMMENTS THEREON GI VEN BY THE ASSESSING OFFICER. SO FAR AS THE FIRST ADDITIONAL GROUND OF APPEAL IS CONCERNED, THE SAME HAS BEEN CONSIDERED BY ME IN THE APPELLATE ORDER IN THE CASE OF THE APPELLANT FOR A.Y. 1993-94 . THE APPELLANTS PLEA FOR EXCLUSION OF THE AMOUNT COMPRI SED IN THE LEASE RENTALS WHICH RELATES TO THE REPAYMENT OF THE PRINC IPAL AMOUNT, WAS ACCEPTED. PARA 4.1 OF MY APPELLATE ORDER FOR A Y 1993-94 REFERS. FOLLOWING MY AFORESAID ORDER, THE ASSESS ING OFFICER IS DIRECTED TO WORK OUT THE AMOUNT COMPRISED IN THE LE ASE RENTALS WHICH REPRESENTS THE INTEREST AND FINANCE CHARGES, IN RESPECT OF THE ASSETS ON WHICH EITHER THE APPELLANT ITSELF HAS WIT HDRAWN THE CLAIM OF DEPRECIATION OR ITS CLAIM OF DEPRECIATION HAS BE EN DISALLOWED, AND INCLUDE ONLY SUCH AMOUNT IN THE APPELLANTS TOT AL INCOME. WHILE WORKING OUT THE AMOUNT OF INTEREST AND FINANC E CHARGES, COMPRISED IN THE LEASE RENTAL, THE ASSESSING OFFICE R SHOULD ALSO TAKE INTO ACCOUNT THE POINT OF VIEW OF THE APPELLAN T ON THE ISSUE. 19.2. SINCE THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 1993-94 IN ITA NO.1314/A HD/1999 & ITA NO.1327/AHD/1999(SUPRA) IN FAVOUR OF ASSESSEE, THER EFORE TAKING A ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 21 - CONSISTENT VIEW, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, THIS G ROUND OF REVENUES APPEAL IS DISMISSED. 20. GROUND NO.7 IS AGAINST THE DIRECTION OF LD.CIT (A) TO ALLOW DEPRECIATION ON ASSETS FALLING UNDER SALE AND LEASE BACK TRANSACTION. THE LD.CIT-DR SUPPORTED THE ORDER OF THE AO AND SUBMITT ED THAT DIRECTION OF LD.CIT(A) IS NOT JUSTIFIED. ON THE CONTRARY, LD.SR .COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY THE TRIBUNAL S ORDER IN ASSESSEES OWN CASE FOR AY 1993-94 IN ITA NO.1314/AHD/1999 & I TA NO.1327/AHD/1999(SUPRA). 21. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ISSUE HAS BEEN DECIDED BY THE HON BLE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 1993-94 IN ITA NO.1314/A HD/1999 & ITA NO.1327/AHD/1999(SUPRA) IN FAVOUR OF ASSESSEE AND, THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 22. GROUND NO.8 IS AGAINST THE FINDING OF LD.CIT(A ) THAT LEASING COMPANY CAN CLAIM OF DEPRECIATION ON ASSETS WHICH M AY NOT BE FULL MACHINE AS SUCH BY IGNORING THE FACT THAT THE ASSET IS PARTLY OWNED. THE LD.CIT-DR SUPPORTED THE ORDER OF AO. ON THE CONTRA RY, LD.SR.COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD.CIT(A) HAS DIS CUSSED THE ISSUE IN PARA 6.10 OF HIS ORDER AND SUBMITTED THAT THE LD.CIT(A) HAS GIVEN A FINDING ON FACT THAT LEASING COMPANY CAN CLAIM THE DEPRECIATIO N ON AN ASSET WHICH ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 22 - MAY NOT BE A FULL MACHINE AS SUCH. HE SUBMITTED T HAT LD.CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE WAS THE OWNER OF THE ASSETS LEASED OUT TO GUJARAT ELECTRICITY BOARD (GEB) WAS ALSO EVIDEN T FROM THE INVOICES ISSUED BY THE SUPPLIER OF THE ASSETS IN ITS NAME. GEB, IN ITS LETTER DATED 19/03/1996 ADDRESSED TO THE INCOME TAX DEPARTMENT, HAD CATEGORICALLY STATED THAT THE ASSETS REMAINED THE PROPERTY OF THE ASSESSEE DURING THE LEASE PERIOD. THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN OTHERWISE ALSO, THE ISSUE IS COVERED BY THE DECISIO N OF HONBLE COORDINATE BENCH RENDERED IN ASSESSEES OWN CASE FO R AY 1993-94 IN ITA NO.1314/AHD/1999 & ITA NO.1327/AHD/1999(SUPRA). 23. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE HONBLE COORDINATE BENCH IN ASSESSEES OWN CASE FOR AY 1993- 94 IN ITA NO.1314/AHD/1999 & ITA NO.1327/AHD/1999(S UPRA) HAS DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE, BY OBSERV ING AS UNDER: 6.1. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, CONTENDS THAT THIS ISSUE AROSE IN THE CASE OF ASSES SEE IN AY 1992- 93 AND THE TRIBUNAL HAS DECIDED THE SAME IN FAVOUR OF THE ASSESSEE BY FOLLOWING OBSERVATIONS:- 25. SO FAR AS ISSUE RAISED BY THE REVENUE IN GROU ND NO.2 IS CONCERNED, THE SAME IS CONSEQUENTIAL TO OUR DECISIO N IN ASSESSEES GROUND NO.3 AND SINCE WE HAVE UPHELD THE ORDER OF THE CIT(APPEALS) ON THE POINT THAT A LESSOR COMPANY CAN CLAIM DEPRECIATION ON AN ASSET WHICH MAY NOT BE A FULL MA CHINE ITSELF AS SUCH AND HAVE ALSO UPHELD THE RATE OF DEPRECIATI ON AS APPLICABLE TO MACHINE AS A WHOLE, THE REVENUES GRO UND STANDS COVERED BY THE SAME AND IS, THEREFORE, REJECTED. ITA NO.1677/AHD/1999 (BY ASSESSEE) ITA NO.1742/AHD/1999 (BY REVENUE) GUJARAT LEASE FINANCING LTD.VS.ACIT/DCIT ASST.YEAR 1994-95 - 23 - 23.1. SINCE THE FACTS ARE IDENTICAL IN THIS YEAR AL SO, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE COORDINATE BENCH, WE REJECT THIS GROUND OF REVENUES APPEAL IN THIS YEAR AS WELL. 24. IN THE COMBINED RESULT, THE APPEAL OF THE ASSES SEE (ITA NO.1677/AHD/1999 FOR AY 1994-95) IS PARTLY ALLOW ED AND APPEAL OF THE REVENUE (ITA NO.1742/AHD/1999 FOR AY 1994-95) IS DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/ 02 /2014 5..., .../ T.C. NAIR, SR. PS 2 - *$6 761$ 2 - *$6 761$ 2 - *$6 761$ 2 - *$6 761$/ COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPELLANT 2. *+&) / THE RESPONDENT. 3. !! $ '8 / CONCERNED CIT 4. '8() / THE CIT(A)-VI, AHMEDABAD 5. 6 #9 *$ , , / DR, ITAT, AHMEDABAD 6. 9:; <, / GUARD FILE. 2' 2' 2' 2' / BY ORDER, +6$ *$ //TRUE COPY// = == =/ // / !' !' !' !' ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 24/25.2.14(DICTATION-PAD 25- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.2.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.28.2.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.2.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER