TaxTMI 
TaxTMI 
2017 (8) TMI 1442
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....ruction expenses? In DBITA No. 167/2011 "i) Whether in the facts and circumstances of the case the ITAT was justified in deleting the addition of Rs. 1,45,45,000/- made by the Assessing Officer on account of cessation of liability u/s 41(1) of the I.T. Act. ii) Whether in the facts and circumstances of the case the ITAT was justified in deleting the addition of Rs. 1,07,64,515/- made by AO by way of disallowance of depreciation claimed on hotel building without appreciating that related investment in the building was not explained since only bogus bills were arranged for construction expenses? In DBITA No. 321/2011 "Whether in the facts and circumstances of the case the ITAT was justified in deleting the additions made u/s 68 of the Act of unexplained cash credits for which the assessee could not discharge the burden of proving creditworthiness of creditors and genuineness of transactions." Counsel for the respondent contended that issue is now squarely covered by the decision of this Court in Tax Appeal No. 608/2009 decided on 25th April, 2017 in the case of same assessee which reads as under:- "Counsel for the respondent has strongly relied on the decision of this Cour....
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....he Act. The revenue is not disputing the facts on the basis of which decision of the Tribunal is based. Submission is that on these very facts, provisions of Section 28(iv) of the Act shall be attracted. It is a pure question of law and therefore, the amended ground as raised by the revenue can be allowed. The position in MCorp Global (P) Ltd. (supra) was entirely different. In that case, the transaction in question was treated as lease transaction in the earlier assessment years and depreciation was granted on that basis. However, in the assessment year in question, the same very transaction was treated as financial transaction and depreciation was disallowed. It was in this backdrop, the Supreme Court opined that the depreciation given to the assessee could not be withdrawn, (sic) when the finding of fact that the transaction in question was leased and not financial transaction had become final and had not been challenged. 8. With this, we proceed to examine this aspect on its own merit, viz., whether provisions of Section 28(iv) of the Act are attracted in the given case. Thus, what is to be seen is that as to whether the written off amount of Rs. 1,46,53,065 in its books of....
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.... reason of payment of duty on goods and the deduction or allowance had been given in the assessment for earlier period, the assessee is liable to disgorge that benefit as and when he obtains refund of the amount so paid. The consideration whether there is a possibility of the refund being set at naught on a future date will not be a relevant consideration. Once the assessee gets back the amount which was claimed and allowed as business expenditure during the earlier year, the deeming provision in Section 41(1) of the Act comes into play and it is not necessary that the Revenue should await the verdict of higher Court or Tribunal. If the Court or Tribunal upholds the levy at a later date, the assessee will not be without remedy to get back the relief." 5.1 He also relied upon the decision of Supreme Court in CIT vs. T.V. Sundaram Iyengar and Sons Ltd. (1996) 222 ITR 344 wherein it has been held as under:- "The principle appears to be that if an amount is received in course of trading transaction, even though it is not taxable in the year of receipt as being of revenue character, the amount changes its character when the amount becomes the assessee's own money because of limi....
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....oresaid reasons given by the Income Tax Appellate Tribunal and the High Court in denying the depreciation do not appear to be valid reasons in law. Insofar as the purchase of gas cylinders by the Assessee is concerned, this fact is not disputed. It is also not disputed that these gas cylinders were purchased for business purpose. In fact, the plea of the Assessee that since manufacturing unit had not started functioning and this necessitated the Assessee to lease out these gas cylinders to the aforesaid two parties to enable it to earn some income, rather than keeping those cylinders idle, is also not in dispute. On the contrary, as mentioned above, the income which is generated from leasing out those gas cylinders is treated as "business income". Once the income from leasing those gas cylinders is accepted as the "business income", which is taxed at the hands of the Assessee as such, we see no reason how the depreciation on these gas cylinders could be disallowed on the ground that the cylinders were not purchased for "leasing business". 11. The aforesaid facts would clearly demonstrate that the Assessee has proved ownership of these gas cylinders and use of these gas cylinders ....