TaxTMI 
TaxTMI 
2015 (7) TMI 1218
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....ed." 3. The roots of this appeal lie in the assessment order made u/s. 143(3) of the Act dt. 26.3.1999. While scrutinizing the return of income, the Assessing Officer found that the assessee has leased asset to Madras Oxygen & Accetelyene Ltd., Protech Circuit Breakers Ltd. In the case of Madras Oxygen & Accetelyene Ltd., the assessee has leased 1700 Nos of High Pressure Seamless Gas cylinder having water capacity as 49 litres amounting to Rs. 91.80 lakhs on which the assessee claimed 100% depreciation. On the basis of the enquires conducted by the Office of the JDIT (Invt.) Coimbatore, it has been ascertained that Madras Oxygen & Accetelyene Ltd., has categorically admitted that the lease transaction was merely a paper transaction. The AO disallowed the claim of depreciation of Rs. 91.80 lakhs. 3.1. Similarly in the case of Protech Circuit Breakers Ltd., on the enquiries made by the Office of the DDi (Inv) Baroda, it has been ascertained that Mr. D.V. Sanghavi, Director has admitted that the lease transaction is merely a paper transaction. The AO disallowed the claim of depreciation of Rs. 2.85 crores. 4. The matter travelled upto the Tribunal. After considering the facts....
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....he revenue has "unearthed several cases wherein the socalled lease transactions have come for a close scrutiny and found that they were all bogus transactions or merely finance transactions. It has been done admittedly to claim hundred per cent depreciation on the eligible assets The provisions of relief have been seen to have resulted in miscarriage. But we are unable to say that the facts of this case are one such nature without the assessee being given full opportunity of crossexamination of the director of PSGL who has .stated that / the entire transactions are bogus and mere paper transactions. In this case, both the Assessing Officer as well as the CIT(A) have not given any opportunity to the assessee to cross examine this person, which is a very important piece of evidence which can turn the case either in favour of the assessee or in favour of the revenue. It is wrong on the part of the C!T(A) to have side tracked this very important right of the assessee to demand a cross-examination of witness' on whose statement the revenue is framing the assessment. We are, therefore, of the considered opinion that there has been violation of the principles of natural justice. Witho....
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....ent and either me or the company do not have any records. 5. During the search and seizure and subsequent Block Assessment Proceedings, the Dept. has taken statements from concerned persons and on the basis the Assessment was completed as Block Assessment. 6. Moreover I am now 65 years old and a diabetic and BP patient. I can not take traveling since I gel frequent giddiness. 7. I humbly request your good selves to take the statements given to the Investigation Department 8S correct for the Assessment. Once again I wish to state that I do not have any papers or do I remember the details of the transactions. I request you 10 consider my Age factor and exempt me from appearing before your goodselves since I cannot take a take a long travel. As far as the summons issued to Shri D. V.Sanghvi, the ADIT(lnvestigation)-, Baroda, has vide his Confidential letter No. Brd/ADIT(lnv.)-I/Commission/DVS/2010-11 dated 22.07.2010 has detained the summons as unserved stating that Shri D. V.Sanghvi has not traced at the given address (copy of letter enclosed). A copy of the reply received from Shri P.Sriramulu was given to the assessee f....
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....r came of forward to conduct cross examination of Shri Sriramulu, finance Manager of M/s. Madras oxygen Acetylene Limited, Coimbatore and Shri D.V.Sanghvi, Director of M/s. Protech Circuitbreakers ltd., (b) The evidences collected by the Income Tax Department were made available to the appellant at various stages and adequate opportunity was given to rebut the claim in course of assessment proceedings and subsequent appeal proceedings and principles of natural justice have been fully adhered as analyzed in the article of Shri H P Ranina, Advocate (quoted above at Para 11.4 of this order) and in accordance with the Supreme Court decision in case of Kishinchand Chellaram 125ITR 713. (c) The appellant has failed to establish that the lease transactions and claim of 100% depreciation was genuine and has merely produced volumes of papers and documents as evidences and the reliable evidence of transportation of assets and existence of assets has not been produced. As held by the Supreme Court in case of CIT -vs- Durga Prasad 82 ITR 540, the Revenue Authorities are not required to "put on blinkers while looking at the documents produced before them" and "they are entitle....
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....d. As mentioned elsewhere, the decision of the Tribunal in the first round of litigation was pronounced on 7.3.2006. The Ld. CIT(A) issued letter to the AO to give opportunity to the assessee for cross examination on 25.6.2010. We failed to understand why the Ld. CIT(A) took more than 4 years to direct the AO to do the needful. Although the Ld. CIT(A) took more than 4 years, the AO in less than 2 months i.e. on 18.8.2010 submitted the report. We once again failed to understand why the AO was in such a hurry when the Ld. CIT(A) took so many years. 10.2. Coming to the statement of Shri P. Sriramulu to whom summons were sent through the ADIT (Inv.) Coimbatore, Shri P. Sriramulu vide his letter dt.17.7.2010 has showed his inability for cross examination stating that he was a 65 years old and a diabetic /BP patient and cannot take travelling as he gets frequent giddiness and directed the AO to accept the statement given to the Investigation department earlier. The AO did not make effort to allow cross examination of this person. 10.3. Even if Mr. Sriramalu was not able to travel, the fact of the matter is that the summons was issued by ADIT (Inv) Coimbatore and therefore there was....
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....ts 17. Copy of statement of production at PCBL for the period Apr 95 - Mar 96 vide letter dated 01.04.96 18. Copy of letter dated 02.04.96 from PCBL certifying that assets are working satisfactorily on shift basis (25 Nos.) 19. Copy of letter dated 02.04.96 from PCBL certifying that assets are insured and working in good condition (25 Nos.) 20. Copy of letter dated 02.04.96 from PCBL certifying that assets are working satisfactorily on shift basis (5 Nos.) 21. Copy of letter dated 02.04.96 from PCBL certifying that assets are insured and working in good condition (25 Nos.) 22. Copy of letter dated 09.04.96 from PCBL confirming that assets are working satisfactorily (30 Nos.) 23. Copy of delivery note of PSL dated 11.09.95(25 Nos.) 24. Copy of delivery note of PSL dated 10.09.95(5 Nos.) 25. Copy of letter dated 11.09.95 from PSL confirming delivery of assets (25 Nos.) 26. Copy of letter dated 10.09.95 from PSL confirming deliveyr of assets (5 Nos.) 27. Copy of Criminal complaint dated 01/10.99 against PCBL Papers related to Madxras Oxygen & Acetylene Co. Ltd. (MOAL ) 1. Copy of certificate from Chartered Engi....