2018 (4) TMI 804

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....he Income Tax Appellate Tribunal in ITA No.1487/Mds/2003 dated 13.10.2006 for the assessment year 1996-97. 3. The Tax Case Appeal has been admitted on the following substantial questions of law:- "1. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal is right in law in disallowing the expenditure incurred in connection with the share issue by the Appellant without considering the nature of expenditure and merely relying on the decision of the Supreme Court in Brooke Bond's case? 2. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal is right in law in restricting the claim of depreciation and in not allowing the full amount of depreciat....

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....sessee. 9. On facts, the Tribunal found that the transaction done by the assessee lacks bonafide. This is, on account of the dates and events, which had occurred in the transaction, pertaining to a machinery being a pollution control equipment. After considering the factual position the Tribunal has held as follows:- "10. From the assessee order, it clearly emerges that SRHSHL had fabricated this machinery by 22.7.94 whereas the same was sold to Veera Enterprises on 22.09.1995 and Veera Enterprises sold the Machinery to the assessee on 25.09.1995. Now the question is use between the period 22.07.1994 and 22.09.1995 and this aspect has not been verified by the AO. Though practically it seems that the machine must have been utiliz....

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....gh Court of Gujarat, in the case of Chokshi Metal Refinery Vs. Commissioner of Income Tax reported in (1977) 107 ITR 0063, for the proposition that the Officers of the Income Tax Department were not taken advantage of ignorance of the assessee, as to its rights and their duties to assess the taxpayers in every reasonable way. 13. We find that the said decision could have no application to facts of the case on hand, since the authorities below as well as the Income Tax Appellate Tribunal found that the SRHSHL had fabricated the machinery by 22.7.94 and sold the machinery to Veera Enterprises on 22.9.95 and Veera Enterprises sold the machinery to the assessee on 25.9.95, which in turn is stated to have leased the machinery back to the vend....