2011 (4) TMI 108

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the case, the Income Tax Appellate Tribunal was right in sustaining the action of the Commissioner of Income-tax (Appeals) and deleting the disallowance of lease rentals on the computers and accessories to M/s Kaymo Finance Private Limited, even though there was constructive sale / paper transaction only and there was no physical movements of goods from the premises of the assessee company?"   2. The assessee, who is a Private Limited Company carrying on the business of providing computer education in educational institutions, filed return of income for the Assessment Year 1998 99 on 31.3.1999 admitting total income at Rs. 10,13,500/-. The assessee claimed an amount of Rs. 46,49,736/- as lease rental payable to M/s Kaymo Finance....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... it is seen that the Assessing Officer has merely relied upon two factors to hold that the lease transaction is not genuine; (i) that there was no physical movement of goods;   (ii)how KFPL has leased out the asset till 31.3.2002 to the appellant company for a total sum of Rs. 64.49 lakhs when they themselves are paying M/s IFCL a sum of Rs. 1.04 Crores." Accordingly, the Commissioner allowed the appeal thereby deleting the disallowance of lease rental made by the Assessing Officer. That order was carried on appeal at the instance of the Revenue to the Income Tax Appellate Tribunal.   3. The Appellate Tribunal in paragraph 8 of the order held that the Commissioner of Income Tax (Appeals) has dealt with the issue in the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ces were raised in the name of the assessee company and entire payments were also made by it. It is also seen that after purchase, the assessee company subsequently on 12.3.1997, i.e., on the same assessment year, sold the said computers and accessories to M/s. Integrated Finance Company Ltd., for the same purchase money of Rs.59,85,037/-. In other words, the assessee purchased the computers and sold the same for the same purchase money in the same year without any profit. In this connection, it has to be seen that the sale was a constructive sale i.e., paper sale and there was no physical movement of the goods from the assessee to M/s. Integrated Finance Company Ltd. After effecting sale on 12.3.1997, the assessee entered into a lease agre....