TaxTMI 
TaxTMI 
2018 (5) TMI 39
X X X X Extracts X X X X
X X X X Extracts X X X X
....) without bringing any fresh material on record has accepted the impugned lease transactions except in the case of Nath Pulp and paper Mills Ltd, as discussed in para 3.4 of the appellate order, without disproving the findings of the Assessing Officer as discussed in the Assessment Order which was earlier confirmed by the Ld.C1T(A), with para 7 of his appellate order dated 13.12.2006, particularly in view of the categorical findings of facts recorded by the Assessing Officer in para 3 of the Assessment Order under consideration dated 21.10.2010, that the Authorized Representative has submitted only the old details again without any fresh supporting or explanations, therefore, the contention or findings of the Assessing Officer that the said transactions are sham or bogus are not disproved by the C1T(A)" 3. Similarly, in the Cross objection the assessee has raised the following grounds: "1. The Ld. CIT(A) erred in setting aside the order to Assessing Officer instead of allowing the assessee's appeal on the fact that Hon'ble ITAT has directed the AO to verify whether principals as decided by special Bench in Mid East Portfolio is applicable or not." 4. As could be seen from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... matter to the file of the Assessing Officer for deciding the issue afresh after examining all the relevant aspects of the matter in accordance with law, observing as under:- "7. We have heard the arguments of both sides and also perused the relevant material placed on record. It is observed that the issue relating to the assessee's claim for depreciation on leased assets as involved in the present case was earlier restored by the Tribunal to the file of the A.O. for deciding the same in the light of the decision of the Special Bench of the ITAT in the case of Mid-East Portfolio Management Ltd (supra) since it was pointed out by the learned counsel for the assessee that the said decision is squarely applicable. A perusal of the assessment order passed by the A.O. in the set aside proceedings, however, shows that neither the ratio of the said decision of the Special bench of the ITAT was clearly discussed by him nor even the guidelines laid down therein to decide the issue. Even the facts involved in the present case were not discussed by him in the light of the said decision to ascertain the applicability of the ratio laid down therein. When it was pointed by the assesses bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has made no efforts to examine the agreements entered into by the assessee and find out, whether these transactions are genuine lease transactions or mere financial transactions with reference to the terms of the agreements. The Tribunal in the second round of appeal while setting-aside the order of the Assessing Officer clearly stated that, on perusal of the Assessment Order passed by the Assessing Officer in the set-aside proceedings shows that neither the ratio of the said decision of the Special Bench was clearly discussed by Assessing Officer nor even the guidelines laid down therein to decide the issue. It was also observed that even the facts involved in the present case are not discussed by the Assessing Officer in the light of the decision of the Special Bench to ascertain the applicability of the ratio of the said decision. It was further observed by the Coordinate Bench that when it was pointed out by the assessee before the Ld. CIT(A) that out of ten transactions in question only one transaction involved sale and lease back as was involved in the case of Mid-East Portfolio Management Ltd. v. DCIT (supra), the Ld. CIT(A) proceeded to hold the remaining nine lease transac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en decided by the Ld.CIT(A) instead of restoring the matter to the file of the Assessing Officer. 12. We find that the Ld. CIT(A) after examining the details furnished by the assessee and analyzing the decision of the Special Bench as well as the decision of the Supreme Court in the case of I.C.D.S. Ltd. v. CIT [350 ITR 527] and M/s. Avasalara Technologies Ltd v. JCIT, Bangalore, in Appeal No. 2996 of 2004 and held as under:- "3.4. I have gone through the assessment order dated 21,10.2010 passed u/s. 143(3) r.w.s. 254 of the I.T. Act wherein the AO has not allowed depreciation claimed by the appellant of Rs, 62,47,500/- which is sustained as in the original order dated 30.03.1998 and the interest element of Rs. 1,07,76,404/- is assessed as appellant's income from finance business, The above order was passed as per the directions given by Hon'ble ITAT 'E' Bench vide order ITA no. 2151/MUM/2000 dated 09.01.2004 where the ratio followed in the case of Mid-East Portfolio Management Ltd. Vs. DC1T (87 1TD 537) (Mum)(SB) in the appellant's case or not. The AR of the appellant has given the full details of depreciation and lease rent for the period 01.04.1996 to 31.03.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ltd. is confirmed and for the rest of depreciation claim over the assets which were purchased from third party by the appellant company and entered into sale and lease back agreement with different parties are eligible to claim depreciation from sale & lease back assets by the appellant company. However, the AO is directed to verify each such claim and be satisfied that the supplier and lessee should not be one at the same. Accordingly, the appeal is partly allowed on this ground." 13. On a perusal of the order of the Ld.CIT(A), we see that the Ld.CIT(A) held that in the transactions by the assessee with Nath Pulp & Paper Mills Ltd., the disallowance on depreciation was confirmed for the reason that both supplier as well as the lessee are found to be Nath Pulp & Paper Mills Ltd., itself. However, the Ld.CIT(A) held that the rest of depreciations claim over the assets which were purchased from third parties by the assessee company and entered into sale and lease back agreement with different parties are eligible to claim depreciation. However, he directed the Assessing Officer to verify each such claim and by satisfaction that the supplier and lessee should not be one at the same t....