TaxTMI 
TaxTMI 
2021 (8) TMI 215
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....ing that the Appellant had disclosed fully and truly all material facts that were necessary at the time of assessment u/s. 143(3) of the Act and reassessment based on new views/opinions on same facts is not permissible in law. 3. That on the facts and in the circumstance of the case the learned CIT(A) erred in confirming the action of the assessing officer in disallowing depreciation amounting to Rs. 2,51,43,548/- on the lease transactions with twelve different parties listed at Annexure B, by treating the same as finance transactions. S. No. 1 Name of Supplier Sri Balaji Textiles Traders Coimbatore Lessee name Jai Renga Mills Description assets Spindles Amount 25,00,848 2 Kumar Textiles Coimbatore Vijay Spinners Spindles 10,03,200 3. a) Laxmi Textiles Co. Bright Spinners Spindles 15,00,000 15,03,380 3.b) Laxmi Textiles Co. Bright Spinners Spindles 10,00,000 3.c) Laxmi Textiles Co. Bright Spinners Spindles 20,50,272 3.d) Laxmi Textiles Co. Ganga Text Spindles 4 Sri Srinivas Text. Co. Coimbatore Ltd &....
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....pliers. viii. List of suppliers were obtained by AO and query letters were sent. ix. CIT also got enquiry done by DCIT (Investigation), Coimbatore and found that some of the parties were not genuine and did not exist. x. Therefore, the ld. AO recorded the reasons on 30/3/1999 that he has reason to believe that income is chargeable to tax has escaped assessment for Assessment Year 1994-95. xi. Subsequently, assessment order u/s. 143(3) read with section 147 of the Act was passed by the ld. AO on 09.03.2001 disallowing the depreciation of Rs. 4,19,78,276/-. 4. The Assessee aggrieved with the order of the ld. AO preferred an appeal before the ld. CIT(A). The Assessee challenged the reopening of the assessment. The ld. CIT(A) held that the ld. AO had sufficient evidence in the form of enquiry report from Investigation Wing, Coimbatore which cannot be ignored and therefore, he confirmed the action of the ld. AO u/s. 147 of the Act. 5. On the merits of the addition he analyzed facts of 13 suppliers and out of that the transaction with APSEB which is Govt Corporation he held that Govt Corporation cannot be a party to a sham transaction and therefo....
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....efore, the ld. CIT instead of taking action u/s. 263 of the Act himself directed the ld. AO to action u/s. 147. 10. On the merits he submitted that the depreciation @100% is allowable on plant and machinery costing less than Rs. 5000/- each and in view of the decision Hon'ble Madras High Court in 244 ITR 238 and 226 ITR 864. He submitted that in Assessee's own case for Assessment Year 1992-93 the claim of the Assessee was allowed. He submitted that original proposal u/s. 263 was sent on the ground that depreciation should have allowed at normal rate and not @100%. 11. He also submitted a paper book containing 19 pages to support his contentions. He therefore, submitted that the reopening is bad in law. With respect to the merits of the claim he submitted that the issue is squarely cover in favour of the Assessee by the decision of the coordinate bench in Assessee's own case in 1993-94 and 1995-96. 12. The ld. DR vehemently supported the order of the ld. AO. 13. We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that i. on 04.08.1997 there were an audit objection which shows that assessment on ....
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.... by the ld. CIT and once again requested to take proper action u/s. 263 of the Act. iv. The ld. CIT vide letter dated 10.09.1998 directed the ld. AO to make enquiries u/s. 133(6) of the Act with respect to claim of depreciation of the Assessee where the seller of the asset and lessee are different. v. On 14.09.1998, the ld. AO stated that assessment proceedings for Assessment Year 1994-95 have already been completed and no proceedings are pending before him against the Assessee and therefore, he requested necessary permission from the CIT to make an enquiry u/s. 133(6) of the Act. vi. Then on 23.09.1998, the ld. CIT granted permission to the ld. AO to make enquiries u/s. 133(6) of the Act. vii. On 03.02.1999 the ld. AO wrote to the Assessee that in some of the cases where the address are given by the Assessee of the parties are either incomplete or parties are not found therefore, to furnish the complete address of the suppliers. viii. On 11.02.1999, the ld. CIT wrote a letter to the ld. AO referring to the proposal u/s. 263 of the Act stating that the order has to be passed by the ld. CIT by 31.03.1999 after giving Assessee an opportuni....