AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2004 (4) TMI 33
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....ule 5 of the Income-tax Rules. The assessee had also claimed a sum of Rs. 3,95,000 as a business expenditure on account of foreign travel expenses incurred by its directors and consultants for the purpose of the business. The return filed by the assessee was processed under section 143(1)(a) of the Act, but was subsequently taken up for scrutiny after issuance of a notice under section 143(2) of the Act. The Assessing Officer asked the assessee to produce the purchase invoice of the skimmer machine in respect of which it had claimed depreciation to the extent of Rs. 17,02,225 under rule 5 of the Income-tax Rules, 1962. By a reply dated January 5, 1999, the assessee claimed that it had purchased the machinery from its sister concern, M/s. Hede Consultancy Co. Pvt. Ltd. (for short "HCC"), on made-to-order basis and had paid to it a sum of Rs. 17,02,225 E between June 23, 1995 and September 8, 1995. The details of payment were also furnished. The skimmer machine was thereafter given on lease to Global Environmental Technology Services-a division of H.C.C. and the lease agreement provided for total lease rentals of Rs. 19,19,945, to be paid in quarterly instalments from February, 1996,....
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.... doubt that it had got fabricated the skimmer machine and that the same had been given under lease to H.C.C. It also held that the lease transaction was genuine. As regards the foreign travel expenses of Rs. 3,95,000, the Tribunal held that it cannot be said that the foreign travel was not wholly and exclusively for the business of the assessee and the mere fact that the foreign travel did not fructify in any business was not a ground for disallowing the foreign travel expenditure. In view of this finding on both the issues, by the impugned order dated May 2, 2001, the Tribunal allowed the appeal. By an order dated January 7, 2002, a Division Bench of this court admitted the appeal on the questions formulated in paragraphs Nos. 5A, B, D and F of the appeal memo, which read as under: "(A) Whether the concurrent findings of facts based on the sufficient evidence arrived at by the Assessing Officer and the first appellant (appellate) authority, that the whole transaction leading to the acquisition of skimmer machine was not genuine, could be reversed by the second appellate authority (ITAT) by allowing the party to adduce further evidence, particularly when ample opportunity was giv....
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....all decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which- (a) has not been determined by the Appellate Tribunal; or (b) has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1). (7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section." Section 260A of the Act was introduced into the Act by the Finance (No. 2) Act of 1998, with effect from October 1, 1998. The appeal relates to the assessment year 1996-97 and the initial proceedings under section 143(2) of the Act appear to have been initiated prior to the introduction of section 260A. As learned counsel for the respondents has not urged the question of maintainability of the appeal under section 260A of the Act in respect of the assessment proceedings commenced or initiated before October 1, 1998, we have heard the ap....
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....gree. Since no restrictions are placed on the appellate power of the Tribunal, in our opinion, the Appellate Tribunal is entitled to reappreciate the evidence adduced before the Assessing Officer and/or the Commissioner (Appeals) and is entitled to reach its own conclusions on all questions of fact. It is not bound by the findings of fact recorded by the Assessing Officer and the Commissioner (Appeals). In the present case, we notice that the Appellate Tribunal has carefully considered and marshalled the evidence which was adduced before the Assessing Officer and the Commissioner (Appeals). The Appellate Tribunal has also carefully considered the evidence of the witnesses to whom summons were issued by the Assessing Officer. On reappreciation of the evidence, which it was entitled to do, the Tribunal came to the conclusion that the assessee had acquired the skimmer machine and was owner of it at the relevant time. The Tribunal further considered the fact that the lease rentals which were paid by the lessee not in accordance with the original terms as stipulated in the lease agreement, would not by itself prove that the assessee had not given the machinery on lease at all. The Tribu....