TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 293
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.... in the case of Britannia Industries Ltd., 278 ITR 546(SC). Considering the issue in light of the decision of the Hon'ble Supreme Court, Ground No.1 is dismissed. 3. Ground No.2 relates to disallowance of depreciation on assets leased to REPL. This issue has been discussed at length by the AO at para-7 of his order and at para 7.4 the AO observed that the Investigation Directorate of the Department had carried out the search under section 132 of the Act, in the case of REPL Engineering Ltd., and other companies belonging to this group. To investigate into large scale bogus leasing transaction of Wind Mills entered into by the REPL with various companies. During the course of search / investigation a reference was made to GEDA to confirm the contents of the Commissioning Certificate issued by it and produced before the Income Tax Authorities for claiming of depreciation. GEDA confirmed that HDFC Bank Ltd. have neither installed any Wind Mills in the state of Gujarat nor any Commissioning Certificate were issued to HDFC Bank Ltd.. The Investigation Directorate carried out a detailed investigation into the genuineness of large scale leasing of Wind Mills with REPL Engineering Ltd. wi....
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....ovisions of this Act". A plain reading of these provisions reveals that in case the AO having jurisdiction on the searched person finds that some seized material indicates undisclosed income of any other person, in that case he should forward a reference u/s 158BD after recording a proper satisfaction and before completion of block assessment. Thereafter the other person's AO is required to proceed according to sec. 158BD read with sec. 158BC. With this over-riding provision on the statute, in our considered view, the addition, if at all could have been considered in the hands of assessee u/s 158BD and not regular assessment u/s 143(3). The procedure prescribed is mandatory, besides it is explicit from the block assessment order of RC that his AO, did not carry a satisfaction that the diary in any way represented undisclosed income of the assessee. It has been observed in RC's block assessment that Kapil Dev has denied the cash entries in diary and therefore after considering the evidence, facts and circumstances, the addition was made in the hands of RC. Thus, three important factors emerge from the block assessment order of RC: (i) Assessec's explanation was considered during bl....
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....f search; in our view, such inferences are shaky and have no legs to stand except creating a suspicion. (iv) The statutory presumption u/s 132(4A) has been raised against RC and addition confirmed in his hands by block assessment u/s 158BD. (v) The assessee had withdrawn from the firm M/s Dev Yogi Developers in April 1997 and RC was search on 4/5 Sept. 1997. Assessee on all forums contended that he was not comfortable with the partnership, which is corroborated by the fact that cheques issued by RC bounced. On measures of preponderance of probabilities also the statement of RC which is not even believed by his AO, cannot implicate the assessee without there being a corroborative evidence. There cannot be a protective assessment on the basis of above assumptions and facts with a bald direction that if the addition is not made in the hands of RC, the same should be added in the hands of the assessee. (vi) On framing of protective assessment u/s 143(3) also the argument of ld. counsel merits credence. The special provisions of the Act prescribe an assessment based on searched material itself and vests power in AO to initiate proceedings u/s 158BD read with sec. 158BC in the hands o....
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....n of the circular of Reserve Bank of India. Aggrieved by this the assessee is before us. 5.2 Ld. Counsel for the assessee strongly relied upon the decision of the Hon'ble Supreme Court in the case of I.C.D.S Ltd. vs. CIT, 350 ITR 527 (SC). The Ld. Counsel for the assessee further pointed out that the decision of Hon'ble Supreme Court has been consistently followed by the Tribunal Mumbai Bench in the case of Development Credit Bank in ITA No.3006/M/2001 and 4892/M/2003, Larsen & Toubro Ltd. in ITA No.2200/M/2000, SISCOM Ltd. in ITA No.7901/M/2003, ICICI Bank Ltd. in ITA No.3827/M/2005. 5.3 Ld. DR could not bring any distinguishing decision in favour of Revenue. 5.4 Considering the facts of the case in the light of the decision of the Hon'ble Supreme Court in the case of ICDS Ltd.(supra), which has been followed by the Benches of the Tribunal Mumbai in the cases cited herein above, we set aside the findings of the Ld. CIT(A) and direct the AO to allow the claim of depreciation on leased assets to AEL. Ground No.4 is allowed. 5.5 Since we have allowed Ground No. 2 & 4, the grievance raised vide Ground No.5 become otiose. 5.6 The additional ground raised by the assessee relates to....
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....een decided qua Ground No.2 in ITA No.1544/M/2000. For similar reasons Ground No.2 is allowed. 7.2 Ground No.3 relates to the disallowance of depreciation on leased assets to REPL Engineering Ltd. Similar issue was considered by us in ITA No.1544/Mum/2000, wherein we have held that this grievance of the assessee becomes otiose, qua our decision on Ground No.2. 7.3 Ground No.4 relates to the disallowance of depreciation on leased assets to AEL. Identical issue was decided in ITA No.1544/M/2000, wherein we have followed the decision of Hon'ble Supreme Court in the case of ICDS Ltd., 350 ITR 527(SC). For similar reasons on similar set of facts Ground No.4 is allowed. 8. The additional ground raised by the assessee become otiose due to our finding given for Ground No.2 of this appeal. 9. In the result, the appeal filed by the assessee is partly allowed. ITA NO.2790/MUM/2000-A.Y. 97-98, REVENUE'S APPEAL: 10. The first ground relates to the deletion of the addition on account of broken period interest. An identical issue has been decided by us in ITA No.1700/M/2000, wherein we have followed the decision of Hon'ble Jurisdictional High Court in assessee's own case. For similar reasons....