ITAT allows assessment reopening based on received information, approves depreciation claim on Air Pollution Control Equipment.

The ITAT upheld the reopening of the assessment under section 147/148 based on received information, allowing the AO to proceed without the need for incriminatory evidence. The claim of depreciation on Air Pollution Control Equipment leased to Prakash Industries Ltd. was allowed after the assessee provided evidence of the transaction's genuineness, leading to the ITAT directing the AO to permit the depreciation claim. The appeal was partly allowed in favor of the assessee.

---

---

Issues Involved:
1. Legality of initiation of reassessment proceedings u/s 148.
2. Disallowance of claim of depreciation on Air Pollution Control Equipment leased to Prakash Industries Ltd.

Issue 1: Legality of initiation of reassessment proceedings u/s 148

The appeal was filed against the order of CIT(A) regarding the validity of reopening the assessment. The AO reopened the case based on information received from the office of DIT (Invt.), Ludhiana, regarding a bogus leasing transaction involving the assessee and Prakash Industries Ltd. The AO reopened the case on 12.03.1999. The legality of the reassessment proceedings under section 147/148 was questioned. The ITAT upheld the reopening of the assessment, stating that the AO had jurisdiction to initiate proceedings once definite information was received, even though four years had not elapsed, and incriminatory evidence was not necessary for initiation.

Issue 2: Disallowance of claim of depreciation on Air Pollution Control Equipment

The second ground of appeal pertained to the disallowance of depreciation claimed on Air Pollution Control Equipment supplied to Prakash Industries Ltd. The AO disallowed the claim based on a presumed hawala deal and the decision in the case of Asea Brown Boveri Ltd. The assessee provided evidence to prove the transaction's genuineness, including lease agreements and movement details of the equipment. The ITAT noted that the transaction was genuine, upheld by a previous order, and that the assessee repossessed and sold the equipment after an Arbitration award in their favor. The ITAT held that the assessee was entitled to depreciation and directed the AO to allow the claim of depreciation on the Air Pollution Control Equipment.

In conclusion, the ITAT upheld the reopening of the assessment under section 147/148 and allowed the claim of depreciation on the Air Pollution Control Equipment leased to Prakash Industries Ltd. The appeal was partly allowed in favor of the assessee.

---