TaxTMI 
TaxTMI 
2018 (3) TMI 1027
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....)-6, Mumbai, whereby the Ld. CIT (A) has partly allowed the appeal of the assessee filed by the assessee against assessment order passed u/s 143 (3) read with section 254 of the Income Tax Act. Third appeal i.e. ITA No. 1722/Mum/2012 has been preferred by the revenue against the order dated 30/12/20111 passed by the Commissioner of Income Tax (Appeals)-6, Mumbai, whereby the Ld. CIT (A) has partly allowed the filed by the assessee against order giving effect to the ITAT order passed in ITA No. 4417 and 4314/Mum/2005 dated 29/11/2009. Vide ITA NO. 1488/Mum/2012 the assessee has challenged the impugned order passed by Commissioner of Income Tax (Appeals)-6, Mumbai, whereby the Ld. CIT (A) has dismissed the appeal filed by the assessee against order giving effect to ITAT order passed in ITA No. 4417 and 4314/Mum/2005, section 143 (3) read with section 254 of the I.T. Act. Since, all the four appeals pertain to the same assessee for the different assessment years, all the appeals were clubbed, heard together and are being disposed of by this common and consolidated order for the sake of convenience. ITA No. 3524/Mum/2013 (Assessment Year: 1994-95) Brief facts of the case are that....
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....w and on facts in confirming disallowance of depreciation on assets leased to Sahney Krikwood Pvt. Ltd. disregarding the information, documents and submissions filed by the appellant. 2.3 Disallowance of depreciation on assets given on lease to PABST Cola Co. Ltd.: 2.3.1 The CIT (A) has erred in law and on fact in confirming the disallowance of depreciation of Rs. 14,18,250/- on assets purchased from Kempsberg Breweries Pvt. Ltd. and leased to PABST Cola Co. Ltd. on the presumption that the assets were not in existence and the transaction was merely a finance transaction. 2.3.2 The CIT (A) has erred in law and on facts in confirming the disallowance of depreciation disregarding the fact that the AO has disallowed the depreciation for the reason that supplier of the goods, Kempsberg Breweries Pvt. Ltd., have not responded to the notice of the AO. The CIT (A) ought to have considered the information, documents and submissions filed by the appellant. 2.3.3 The CIT (A) has erred in law and on facts on confirming the disallowance of depreciation disregarding the information, documents and submissions filed by the appellant." 3. Before us, the Ld. c....
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....gain disallowed the depreciation in the order passed u/s 143 (3) read with section 254 of the Act. The action was again challenged before the Ld. CIT (A). The Ld. CIT (A) further confirmed the order passed by the AO. Against the said order, appeal was filed before the ITAT in the second round. Similar disallowances were made by the AO, which were sustained by CIT (A) for the A.Y. 1997-98 and 1998-99 and the assessee filed appeal before the Tribunal and the Tribunal decided the issue in favour of the assessee and deleted the addition. The Ld. counsel further relied upon the decision of Tribunal in assesee's own wholly owned subsidiary company in Sheba Property Ltd. vs. DCIT (supra). It was further argued that Hon'ble Gujarat High Court in the case of ACIT vs. Gujarat Lease Finance Ltd. (2008) 174 Taxmann 28, allowed the similar disallowances. The assessee further relied upon the decision of Hon'ble Supreme Court in the case of ICDS Ltd. vs. CIT (supra). After hearing the rival contentions the co-ordinate Bench of the Tribunal decided this issue in favour of the assessee. The findings of the Tribunal are reproduced herein below:- "5. We have considered the rival submission o....
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.... eyes of law. As the assessee was the owner of the assets leased out to different parties, so, it was entitled to claim depreciation. The FAA had gone through the lease agreements, confirmation letters and other relevant material. As the existence of assets and their use is in doubt, so, the AO in our opinion was not justified in denying the claim of depreciation made by assessee. We also find that FAA had allowed depreciation @ 50%, as the assets were used for less than 180 days during the year under consideration. It is also a fact that two of the lessees are state electricity boards i.e. APSEB and RSEB. Both of them have confirmed the lease transaction and installation of machinery assets. The FAA had observed that it could not be alleged that govt. undertakings had colluded with the assessee to mislead and defraud the govt. of its revenue by giving wrong confirmations. So, we do not see any infirmity in the order of the FAA. Confirming his order, we decide the Ground No. 11 against the AO. 6. Thus, considering the decision of Tribunal in assessee's own case on identical grounds of appeal, which was decided on the identical fact, we find that this ground of app....
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....ursuance thereof, the AO passed assessment order u/s 143(3) read with section 254 of the Act and disallowed depreciation on the assets given on lease by holding the lease as non genuine. The assessee challenged the said order before the CIT(A). The Ld. CIT(A) affirmed the action of the AO. Against the said order the assessee is in appeal before the Tribunal. 2. The assessee has raised the following effective grounds of appeal against the impugned order passed by the Ld. CIT (A):- 1. "Disallowance of depreciation on leased assets of Rs. 3,05,73,735 1.1 The Learned CIT (A) has erred in law and on facts in upholding the disallowance of depreciation aggregating to Rs. 3,05,73,735 on assets acquired and leased during the year. 1.2 The Learned CIT (A) has erred in disregarding submissions and facts of the case and holding that the transaction of lease of assets acquired and leased during the year was not a genuine lease transaction but merely a loan transaction and consequently not eligible for depreciation under section 32 of the Act. 1.3 The Learned CIT (A) has erred in law and on facts in not following decision of the Hon'ble Supreme Court in the....
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....BDT. Hence, we affirm the action of order of the CIT (A) in deleting interest levied u/s 220 (2) of the Act. Since, we have deleted the interest u/s 220 (2) affirming the orders of the CIT (A) the cross objection will not survive." 5. Respectfully following the view taken by the coordinate Bench, we direct the AO to recomputed interest accordingly. Hence, we allow this ground of appeal of the assessee. ITA No. 1722/MUM/2012 (Assessment Year: 1997-98) Brief facts of the case are that the Ld. CIT (A) dismissed the ground regarding disallowance of depreciation on assets given on lease treating the same as long transaction holding that this issue has been examined in detail in the case of assesse's appeal for the A.Y. 2000-01 and grounds relating to claim of 100% depreciation during the A.Y. 1994-95, 1995-96, 1996-97, 1997-98 and 1998-99. So far as the ground without prejudice that the AO has erred in facts and law in not granting deduction of capital recovery out of lease rent with regard to the assets on which depreciation had been denied, the Ld.CIT (A) directed the AO not to consider principle amount of capital recovery as income in the present year for the reason that the....
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.... "3.2 I have gone through the order of the AO and submission of the appellant. The ITAT in their order dated 24.09.2008 at Para 6 Page 4 observed as under: "....... This issue is also remitted to the file of the AO with a direction to decide it afresh in the light of the Actuarial valuation certificate. We further observe that the judgment of the Hon'ble Supreme Court in the case of Bharat Earth Movers Ltd. (supra) has been nullified by insertion of section 43B(f). Since the insertion has been made by the Finance Act, 2001 w.e.f. 1.4.2002, the said amendment would not affected the deduction in the year in question. Thus, for A.Y. 1997-98, the ITAT has directed the AO to decide the issue afresh in the light of the Actuarial valuation certificate. 3.2.1 On the issue of liability being ascertained, the Supreme Court in the case of Bharat Earth Movers v. Commissioner of Income Tax 245 ITR 428. The Supreme Court has laid down the law on the subject as follows: "The law is settled if a business liability has definitely arisen in accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a futu....