TaxTMI 
TaxTMI 
2011 (9) TMI 732
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.... foreign cars. 2. Whether in the facts and circumstances of the case, the Tribunal was right in treating the assessee as the owner of foreign motor cars for the purpose of the allowing capital loss. 2. Following are the questions of law raised in respect of the assessment year 1994-1995: 1.Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that the assessee was entitled to loss claimed on sale of foreign cars was allowable? 2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in rejecting the contentions of the department that the loss on sale of foreign cars which was given on lease to various lessees ....
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....sion that the assessee had created an artificial loss without any basis for fixing sale value and thereby reduced the taxable income by deducting the loss arrived at under the head Long Term Capital Gains. The officer further pointed out that since the cars were also imported cars the assessee would not have the benefit under Section 32(1) of the Income Tax Act, 1961. As the price at which the cars leased out were sold to the lessees at an artificially reduced price, the same was used as a route to claim the depreciation indirectly which was not otherwise available. 4. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income Tax Appeals who pointed out that in respect of the assessment year 1993-1994, the....
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....e loss had now become deductable since no depreciation was allowed to the assessee. The difference between the cost of acquisition and the consideration for transfer had to be allowed under the head short term capital loss or long term capital loss, as the case may be. Pointing out to the lease deed, the Commissioner of Income Tax (Appeals) held that the lease rentals were so fixed so as to take into consideration that no depreciation was permissible and that the capital loss would be allowed upon the eventual transfer. Considering the genuineness of the transaction, the Commissioner of Income Tax (Appeals) allowed the claim. 6. The Revenue went on further appeal before the Tribunal. The facts in respect of the assessment years 1993....