Hynoup Food & Oil Indus.Ltd., Ahmedabad V. The Income tax Officer,Ward-4(3), Ahmedabad

ITA 948/AHD/2008

• Counselvise Citation: 94820514 RSA 2008
• Duration Of Justice: 4 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-04-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 13-03-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: S V AGARWAL
• Keywords: Depreciation; Revenue expenditure; Capital expenditure
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.948/AHD/2008 ASSESSMENT YEAR:1995-96 HYNOUP FOOD & OIL INDS. LTD., MARUTI HOUSE,OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD PAN NO.AAAACH5534M V/S . ASST. COMMISSION OF INCOME-TAX, CENTRAL CIRCLE-1(2), AHMEDABAD AT PRESENT INCOME TAX OFFICER, WARD-4(3), AHMEDABAD (APPELLANT) .. (RESPONDENT) /BY APPELLANT SHRI S.V. AGARWAL, AR /BY RESPONDENT SHRI S.K. GUPTA, CIT-DR /DATE OF HEARING 03-04-2012 /DATE OF PRONOUNCEMENT 18-05-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THE PRESENT APPEAL OF THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, AHMEDABA D DATED 07-01-2008 FOR THE ASSESSMENT YEAR 1995-96 RAISING THE FOLLOWING G ROUNDS OF APPEAL:- THE ORDER OF LEARNED COMMISSIONER OF I. TAX (APPEA LS) [CALLED CIT(A)] DT. 07.01.2008 ON SET-ASIDE ISSUES BY SHOWN. ITAT I N ITA NO.3721 & 3647AHD/2002 (BENCH- ORDER DT. 31-01-2006) IS BAD I N LAW AS WELL ON FACTS ON FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISAL LOWANCE OF PROFESSIONAL FEES OF RS.1,75,000/- PAID TO CHEMIND CONSULTANTS FOR PREPARING PROJECT REPORT OF NEW PROJECT IN THE SAME LINE OF BUSINESS TO INCREASE THE PRODUCT AND SALES. ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 2 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISAL LOWANCE OF RS.6,97,408/- BEING LEASE RENT PAID ON LEASED BACK BOILERS. THE BOILER IS USED FOR THE PURPOSE OF BUSINESS. 2. THE FACTS IN BRIEF ARE THAT ORIGINAL ASSESSMENT WAS COMPLETED IN THE CASE OF ASSESSEE ON 20-03-1998, DETERMINING INCOME OF RS.1,02,440/- AND IN APPEAL AGAINST ORDER OF LD. CIT(A) DATED 27-09-2002 THE HONBLE ITAT AHMEDABAD IN ITA NO.3721 & 3647/AHD/2001 SET ASIDE THE FOLLOWING ISSUES TO THE FILE OF LD. CIT(A) TO DECIDE THE MATTER AFRESH AFTER RECORDING COMPLETE FACT BY A SPEAKING ORDER AFTER GIVING OPPORTUNITY TO THE ASSESSING OFFICER AND THE ASSESSEE:- I) DISALLOWANCE OF PROFESSIONAL FEES PAID TO CHANIN D CONSULTANTS OF RS.1,75,000/- II) DISALLOWANCE OF RS.2,15,100/- PAID TO JAYESH K GURU, COMMISSION AGENT. III) DISALLOWANCE OF RS.6,97,408/- LEASE RENT PAID ON BOILERS. 3. LD. CIT(A) AFTER CONSIDERING THE SUBMISSION MADE BY LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DECIDED THE ISSUE OF DISALLOWANCE OF PROFESSIONAL FEE PAID TO CHANIND CONSULTANT OF RS.1 .75 LAKH AND DISALLOWANCE OF RS.6,97,408/- LEASE RENT PAID ON BOILER AGAINST ASSESSEE AND ANOTHER DISALLOWANCE OF RS.2,15,100/- PAID TO JAYESH K GURU WAS DIRECTED TO BE DELETED. 4. LD AUTHORIZED REPRESENTATIVE, SHRI S.V. AGRAWAL SUBMITTED THAT LD. CIT(A) HAS NOT APPRECIATED THE FACT IN RIGHT PROSPE CTIVE AND SUBMITTED THAT THE ASSESSEE HAD PLACED ON RECORD BILLS OF CHANIND CONS ULTANTS. THE EXPENDITURE WAS INCURRED ON ACCOUNT OF ESTABLISHING A PROJECT A T RAICHUR (KARNATAKA). THE AR SUBMITTED THAT ASSESSING OFFICER HAS NOT DISPUTE D THE PAYMENTS MADE FOR PREPARING THE PROJECT REPORT OF NEW PROJECT WHICH W AS FOR MANUFACTURING OF MARGARINE AND SOYA OIL. LD. AR SUBMITTED THAT LD. C IT(A) FAILED TO APPRECIATE THE FACT THAT EXPENSES WERE MADE ON ACCOUNT OF SETT ING UP A NEW PROJECT. HOWEVER, LD. AR SUBMITTED THAT THE PROJECT WAS NOT FOUND TO BE VIABLE AND THEREFORE, SAME WAS NOT SET UP. LD. AR SUBMITTED TH AT LD. CIT(A) HAS ERRED IN ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 3 HOLDING THAT THE DECISION OF HONBLE KERALA HIGH CO URT IN THE CASE OF KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD. V. CI T 182 ITR 67 (KER) WAS NOT APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF TH E CASE. 5. ON THE CONTRARY LD. CIT-DR ARGUED THAT THE LD. C IT(A) HAS CONSIDERED THE SUBMISSION OF THE ASSESSEE AND CAME TO THE RIGH T CONCLUSION THAT THE EXPENDITURE AS INCURRED BY THE ASSESSEE WAS IN THE NATURE OF CAPITAL LOSS. IT IS ALSO SUBMITTED BY THE LD. DR THAT THE ASSESSEE GROS SLY FAILED TO PLACE ON RECORD THE PROJECT REPORT PREPARED BY THE SAID CONS ULTANTS TO VERIFY THE GENUINENESS OF THE EXPENSES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND JUDGMENTS CITED BY THE PARTIES. WE FIND THAT LD. CIT(A) HAS DEALT THIS ISSUE IN PARA-3.1 OF HIS ORDER AND SAME IS REP RODUCED HEREINBELOW:- 3.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE A.R I N THE ORIGINAL ASSESSMENT THIS ISSUE WAS DISCUSSED BY THE A.O IN P ARA 15.6 OF THE ASSESSMENT ORDER DT. 20-3-1998. THE A.O OBSERVED TH AT NEITHER RAIACHUR OIL PROJECT OR PROJECTS AS CLAIMED IN THE BILLS OF THE ABOVE PARTY WERE IN EXISTENCE OR IN OPERATION AT ANY TIME IN TH E YEAR UNDER REVIEW. THE APPELLANT INTENDED TO START THE PROJECT AT RAIC HUR BUT ULTIMATELY THE IDEA WAS DROPPED. FURTHER THE APPELLANT COULD NOT S UBMIT THE COPY OF PROJECT REPORT OR ANY OTHER EVIDENCE TO SHOW THAT T HE EXPENDITURE WAS INCURRED FOR BUSINESS OF THE APPELLANT, DURING THE YEAR IN APPEAL. THEREFORE, THE A.O DISALLOWED THE CLAIM HOLDING THA T THE CLAIM WAS NOT SUPPORTED BY EVIDENCES AND IT WAS NOT A REVENUE EXP ENDITURE. IN APPEAL BEFORE THE CIT(APPEALS) THE A.O ACCEPTED THE SUBMIS SION OF THE A.R AND ALLOWED THE SAME AS REVENUE EXPENDITURE. AFTER THE ISSUE WAS RESTORED TO THE FILE OF CIT(APPEALS), THE APPEAL WA S POSTED FOR HEARING AND DURING THE FRESH PROCEEDINGS, THE A.R SUBMITTED THAT FEASIBILITY STUDY WAS OBTAINED TO INCREASE PRODUCTION OF OIL FO R RAICHUR OIL PROJECT AND IT WAS EXPENDITURE IN THE SAME LINE OF BUSINESS IN WHICH THE APPELLANT WAS DEALING. THE A.R FURTHER SUBMITTED TH AT THE BOOKS OF THE APPELLANT ARE AUDITED TWICE UNDER COMPANIES ACT AND TAX AUDIT. THE A.R RELIED UPON THE KERALA HIGH COURT DECISION AS C ITED ABOVE AND SUBMITTED THE COPIES OF TWO BILLS OF CHEMIND CONSUL TANTS. I FIND THAT THE PROJECT WAS ABANDONED BY THE APPELLANT. THEREFORE, THE A.O HAD RIGHTLY DISALLOWED IT AS A CAPITAL LOSS AND FURTHER, THE CO PY OF PROJECT REPORT COULD NOT BE FILED BY THE APPELLANT AND THEREFORE, IT COULD NOT BE VERIFIED ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 4 AS TO WHAT WAS THE NATURE AND TYPE OF CONSULTANCY S ERVICES RENDERED BY THE CONSULTANT. I) IT WAS HELD IN THE CASE OF E.I.D. PARRY (INDIA) LTD. VS. CIT REPORTED IN 257 ITR 253 (MAD) THAT THE EXPENDITURE WAS INCUR RED FROM THE PURPOSE OF SETTING UP A NEW PROJECT. THE EXPENDITUR E HAD BEEN INCURRED IN THE YEARS PRIOR TO THE ASSESSMENT YEAR IN QUESTION. THE ASSESSEES CASE THAT IT SUBSEQUENTLY ABANDONED THAT PROJECT DID NOT ON THAT SCORE CONVERT WHAT WAS AN EXPENDITU RE IN THE NATURE OF CAPITAL EXPENDITURE INTO A REVENUE EXPEND ITURE. II) IT WAS HELD IN THE CASE OF TRIVENI ENGINEERING WORKS LTD. VS. CIT REPORTED IN 232 ITR 639 (DELH) THAT THE AMOUNT SPEN T ON THE PROJECT REPORTS WAS NOT FOR THE PURPOSE OF FACILITA TING THE ASSESSEES EXISTING TRADING OPERATIONS OR ENABLING MANAGEMENT AND CONDUCT OF THE ASSESSEES BUSINESS TO BE CARRIE D ON MORE EFFICIENTLY OR MORE PROFITABLY, WHILE LEAVING THE F IXED CAPITAL UNTOUCHED. IF ONLY THE PROJECT REPORTS HAD BEEN SUC CESSFULLY ACCEPTED AND PUT INTO IMPLEMENTATION, THE ASSESSEE WOULD HAVE GONE INTO MANUFACTURING OF A NEW PRODUCT WHICH WOUL D HAVE CERTAINLY REQUIRED INVESTMENT OF FRESH CAPITAL AND COMING INTO EXISTENCE OF ADDITIONAL FIXED ASSETS. THE EXPENDITU RE WAS, THEREFORE, ATTRIBUTABLE TO CAPITAL HAVING BEEN INCU RRED WITH A VIEW TO BRINGING AN ASSET OR ADVANTAGE INTO EXISTENCE AN D HAVING ENDURING BENEFIT. MERELY BECAUSE THE PROJECT DID NO T MATERIALIZE, THE NATURE OF THE EXPENDITURE WOULD NOT CHANGE TO R EVENUE. III) RELIANCE IS ALSO MADE ON CIT VS. SHRI DIGVIJAY CEMENT CO. LT. 159 ITR 253(GUJ) AND KANORIA CHEMICALS & INDUSTRIES LTD. V. CIT REPORTED IN 78 TAXMAN 454 (CAL). TE DECISION CITED BY THE LD. A.R OF KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD. VS. CIT 182 ITR 67 (KER) IS ON DIFFERENT FACTS AS IN THAT C ASE OBJECT OF THE APPELLANT WAS TO DO INDUSTRIAL DEVELOPMENT IN THE S TATE WHERE AS THE APPELLANT IS A MANUFACTURING COMPANY. IN VIEW O F THE ABOVE FACTS AND THE LEGAL POSITION THE EXPENSES ARE HELD AS CAPITAL EXPENDITURE AND NOT ALLOWABLE. THIS GROUND IS THUS DISMISSED. ADMITTEDLY, LD. AR DID NOT PRODUCE ANY PROJECT REPO RT EITHER BEFORE ASSESSING OFFICER OR LD. CIT(A). THE ASSESSEE HAS ALSO NOT PR ODUCED BEFORE THIS TRIBUNAL ANY PROJECT REPORT TO CORROBORATE THE FACT THAT PROJECT REPORT WAS PREPARED BY THE CHANIND CONSULTANTS WHOSE COPY OF B ILLS ARE SUBMITTED. WE DO NOT FIND FORCE INTO THE CONTENTION OF LD. AR THA T THE BILLS OF CHANIND CONSULTANTS ARE SUFFICIENT EVIDENCE TO PROVE THAT T HE SERVICES OF SUCH CONSULTANT WERE HIRED FOR THE PURPOSE OF PREPARATIO N OF PROJECT REPORT. IN VIEW OF THE FACT THAT ONUS WAS ON THE ASSESSEE TO PROVE THAT EXPENDITURE AS ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 5 CLAIMED WAS IN FACT INCURRED FOR THE BUSINESS PURPO SE. IN THE ABSENCE OF PROJECT REPORT, WE DO NOT FIND ANY INFIRMITY INTO T HE ORDER PASSED BY LD. CIT(A) AND HOLDING THAT ASSESSING OFFICER HAS RIGHTLY DISA LLOWED THE EXPENDITURE TREATING THE SAME AS CAPITAL LOSS. THEREFORE, IT CO ULD NOT BE VERIFIED AS WHAT WAS THE NATURE AND TYPE OF CONSULTANCY SERVICE REND ERED BY THE ASSESSEE. THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 7. NEXT GROUND RAISED IN THIS APPEAL OF ASSESSEE IS WITH REGARD TO CONFIRMATION OF DISALLOWANCE OF RS.6,97,408/- BEING LEASE RENT PAID ON LEASE BACK BOILERS. FROM THE ORDER OF LD. CIT(A) IT IS TR ANSPIRED THAT THE ASSESSEE HAD CLAIMED LEASE CHARGES ON BOILERS OF RS6,97,408/ - UNDER THE HEAD LEASE EXPENSE DEBITED UNDER FINANCIAL CHARGES IN THE PROF IT AND LOSS ACCOUNT THE BOILER WAS SOLD TO LLOYD FINANCE LTD. AND LEASED BA CK TO THE ASSESSEE. THE AO HELD THAT ASSETS WERE NOT ACTUALLY SOLD AND NO P HYSICAL DELIVERY TOOK PLACE AND IT WAS ACCOMMODATION TRANSACTION WHICH HELPED T HE LESSER IN CLAIMING THE HIGHER DEPRECIATION ON THE ASSETS HAVING NIL WDV AN D ALSO HELPED THE ASSESSEE IN CLAIMING EXPENDITURE IN THE FORM OF LEA SE CHARGES. THE AO OBSERVED THAT WDV AT THE TIME OF SALE AND LEASE BAC K WAS NIL. HENCE, THERE WAS NO QUESTION OF ALLOWANCE OF DEPRECIATION. THE A O DISALLOWED THE LEASE RENT CHARGES. BUT THE LD. CIT(A) IN THE REMAND PROC EEDINGS ALLOWED THE LEASE CHARGES. THE LD. CIT(A) WHEN THE MATTER WAS REMITTE D BACK FOR FRESH DECISION DECIDED THIS ISSUE AGAINST THE ASSESSEE. 8. LD. AR SUBMITTED THAT LD. CIT(A) GROSSLY ERRED I N CONFIRMING THE DISALLOWANCE OF LEASE RENT. HE SUBMITTED THAT THE L EASE RENTAL PAID WAS CLAIMED AS EXPENDITURE AND NO DEPRECIATION WAS CLAI MED. IN SUPPORT OF THIS CONTENTION, LD. AR HAS DRAWN OUR ATTENTION TO THE S TATEMENT OF INCOME FOR A.Y. 1995-96, WHEREIN THE SALE CONSIDERATION OF THE BOIL ER HAS BEEN REDUCED FROM THE SECOND BLOCK OF ASSET. ON THE CONTRARY, LD. DR SUBMITTED THAT LD. CIT(A) HAS RIGHTLY FOLLOWED THE DECISION OF THE HONBLE PU NJAB & HARYANA HIGH COURT ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 6 IN THE CASE OF INDUSTRIAL CABLES (I) LTD. V. CIT (2005) 272 ITR 159 (P&H) AND SUBMITTED THAT THERE IS NO ERROR INTO THE ORDER PAS SED BY LD. CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY THE PARTIES. WE F IND THAT LD. CIT(A) HAS DEALT THIS ISSUE IN PARA-5.2 OF HIS ORDER, SAME IS REPRODUCED HEREINBELOW FOR THE SAKE OF CLARITY:- 5.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE BY THE LD. AUTHORIZED REPRESENTATIVE. HOWEVER FOR ALLOWING LEA SE RENT AS EXPENDITURE IT IS NECESSARY TO SATISFY THE CONDITIO N THAT THE ASSET WAS USED FOR THE BUSINESS OF THE APPELLANT. AS LEASE RE NT IT CAN BE ALLOWED PROVIDED THE APPELLANT PROVES THAT THE ASSET BOILER WAS USED IN THE BUSINESS OF THE APPELLANT. IT HAS BEEN HELD IN THE CASE OF INDUSTRIAL CABLES (I) LTD. VS. CIT REPORTED IN 272 ITR 159 (P& H) WHILE CONFIRMING DISALLOWANCE OF LEASE RENT IN THE CASE OF ASSET SO LD AND LEASED BACK AS UNDER; THE QUESTION AS TO WHETHER AN ITEM OF EXPENDITURE IS WHOLLY AND EXCLUSIVELY LAID OUT FOR THE PURPOSE OF THE BUSINES S OR NOT, HAS TO BE DECIDED ON THE FACTS OF EACH CASE, THE NECESSARY CONDITION BEING THAT IT MUST BE LAID DOWN OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE ASSESSEES BUSIN ESS IS THAT IT IS INCURRED BY THE ASSESSEE AS INCIDENTAL TO HIS TRADE FOR THE PURPOSE OF GETTING THE TRADE GOING AND BY MAKING IT PAY AND IN ANY CAPACITY AS A TRADER. THE WORD BUSINESS USED IN SEC TION 37(1) IN ASSOCIATION WITH EXPRESSION FOR THE PURPOSE OF IS A WORD OF ONE COMMUTATION. IN THE CONTEXT OF TAXING STATUTE THE W ORD BUSINESS WOULD SIGNIFY CONTINUED COMMERCIAL ACTIVITY WHICH I S CARRIED ON WITH THE END IN VIEW OF MAKING AND EARNING PROFITS. THEREFORE UNDER SECTION 37(1) OF THE INCOME-TAX ACT, CONNECTI ON HAS TO BE ESTABLISHED BETWEEN THE EXPENDITURE INCURRED AND TH E ACTIVITY UNDERTAKEN BY THE ASSESSEE WITH SUCH OBJECT WHICH I S WANTING IN THE PRESENT CASE OF THE ASSESSEE. THE LAND AND BUILDING IN THIS CASE WAS SOLD BY THE ASSESSEE TO ITS SISTER CONCERN ON OCTOBER 10, 1991, FOR A CONSIDERA TION OF RS.45,35,451 AND IMMEDIATELY THEREAFTER, THE VERY S AME ASSETS WERE TAKEN ON LEASE BY THE ASSESSEE FROM ITS SISTER CONCERN. NOT ONLY THIS, EVEN THE CONSIDERATION OF RS.45,35,451 R ECEIVED ON OCTOBER 10, 1991, WAS INDIRECTLY TRANSFERRED BACK B Y WAY OF AN INTEREST-FREE LOAN OF RS.50 LAKHS WITHIN A FEW DAYS OF ITS RECEIPT. THE ASSESSEE HAD ALSO FAILED TO SUBSTANTIATE ITS CL AIM THAT IT HAD CERTAIN PENDING ORDERS FOR THE PURPOSE OF WHICH THE ASSETS SOLD BY IT HAD BEEN TAKEN ON LEASE. IT FAILED TO PRODUCE AN Y EVIDENCE TO ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 7 SHOW ANY MANUFACTURING DONE BY IT. IT HAS ALSO BEEN FOUND AS A FACT THAT THE SISTER CONCERN ALSO DID NOT CARRY OUT ANY BUSINESS ACTIVITY AFTER PURCHASING AND LEASING OF THE ASSETS . IN THE FACE OF THESE GLARING FACTS, THE TRIBUNAL HAS RIGHTLY DRAWN THE CONCLUSION THAT THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH ITS SISTER CONCERN WERE NOT GENUINE AND HAD BEEN ENTERED INTO MERELY TO DIVERT ITS PROFITS TO THE SISTER CONCERN. IN THESE CIRCUMSTANCES, THE TRIBUNAL HAS RIGHTLY HELD THAT THE EXPENDITURE CANN OT BE SAID TO HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE P URPOSE OF THE BUSINESS AS NO CONNECTION HAD BEEN ESTABLISHED BETW EEN THE EXPENDITURE INCURRED AND THE ACTIVITY UNDERTAKEN BY THE ASSESSEE. EVEN OTHERWISE, THE FINDINGS RECORDED BY THE TRIBUN AL ARE PURE FINDINGS OF FACTS. THE TRIBUNAL HAS TAKEN A POSSIBL E VIEW WHICH DOES NOT SUFFER FROM ANY FACTUAL OR LEGAL INFIRMITY . WE ARE, THEREFORE, SATISFIED THAT NO SUBSTANTIAL QUESTION O F LAW ARISES OUT OF THE ORDER OF THE TRIBUNAL WARRANTING INTERFERENC E BY THIS COURT. I FIND THE CLAIM OF THE LD. A.R THAT LEASE RENT IS LIKE INTEREST IF THE TRANSACTION IS REGARDED AS FINANCIAL TRANSACTION AN D THE SAME SHOULD BE ALLOWED AS DEDUCTION IS NOT TENABLE AS THE APPELLAN T HAS CLAIMED THE SAME AS LEASE RENT AND NOT AS INTEREST ON LOAN. FOL LOWING THE RATIO LAID DOWN IN THE CASE CITED ABOVE, I CONFIRM THE DISALLO WANCE OF LEASE RENT AS THE APPELLANT HAS NOT PROVED THE NECESSITY OF TA KING THE ASST ON LEASE FOR ITS BUSINESS. THIS GROUND IS THUS DISMISS ED. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS HAS RE LIED UPON THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF INDUSTRIAL CABLES (I) LTD. (SUPRA) IN THIS CASE ALSO THE ASSESSEE HAS FAILED T O PROVE THAT THE BOILER WAS USED FOR THE BUSINESS OF THE ASSESSEE. WE DO NOT FI ND ANY FORCE INTO THE CONTENTION OF LD. AR THAT THE TRANSACTION WAS NOTHI NG BUT A FINANCIAL LEASE, THEREFORE ELIGIBLE FOR DEPRECIATION. THIS GROUND OF APPEAL IS DISMISSED 10. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP ITA NO.948/AHD/2008 A.Y. 1995-96 HYNOUP FOOD & OIL INDS. LTD. V. ITO, WD-4(3)ABD PAGE 8 - 18/05/2012 ()* + ,- ,- ,- ,- ../ ../ ../ ../ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. *.3 , ,4 / CONCERNED CIT 4. , ,4- / CIT (A) 5. /67 ...3, , .3 , ()* / DR, ITAT, AHMEDABAD 6. 7:; <= / GUARD FILE. BY ORDER/ ,- , /TRUE COPY/ >/ ( ? , .3 , ()* + STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 15/5/12 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 15/5, 16/5 4) DATE OF CORRECTION 16/5 5) DATE OF FURTHER CORRECTION 17/05 6) DATE OF INITIAL SIGN BY MEMBERS 17/05 7) ORDER UPLOADED ON 18/05 8) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 18/05