TMI Blog2014 (2) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1986-87 were assessed as the assessee’s income - The sale consideration was found by the Tribunal to have been received by the assessee directly from the finance companies - the Tribunal did not find any justification to doubt the genuineness of the sale of the trucks. The Tribunal came to the conclusion in all the three years that the assessee was in receipt of hire charges and thus satisfied the second condition of Section 32(1) i.e. that the asset owned by the assessee should be used for the purpose of the business of the assessee - the assessing officer was not able to discredit or impeach the evidence adduced by the assessee to show that it was in receipt of hire charges - The assessing officer was not able to show that the claim was bogus – thus, there was material before the Tribunal to come to the conclusion that the trucks in question were given on hire - There is no substantial question of law framed on the aspect of whether the assessee was the owner of the trucks - Thus both the conditions of Section 32(1) stand satisfied – thus, the Tribunal was correct in law in accepting the assessee’s claim for depreciation on the trucks –Decided against Revenue. - ITA 80/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een given on hire to M/s. Bombay Okara Cargo Ltd. and M/s. Bombay Okara Carriers and Movers (Regd.) for hire charges of Rs.300/- and Rs.290/- per day respectively. The total charges thus received were Rs.14,850/-. On being asked to furnish the details regarding the purchase, registration, user and subsequent sale of the trucks early in the next financial year, the assessee furnished such details. The AO thereafter recorded the statement of the accountant of the aforesaid transport companies. On the basis of this statement and not being satisfied with the particulars submitted by the assessee, the claim of depreciation was disallowed. 3. On appeal the CIT (Appeals) by order dated 20.02.1990 set-aside the assessment and directed the assessing officer to re-examine the claim and record fresh findings on various points, including the question as to whether these trucks were actually given on hire. 4. Pursuant to the directions, the AO made some inquiries and issued notices under Section 131 of the Act to the parties from whom the assessee received hire charges, but these notices came back unserved. Those parties could not be produced by the assessee. The AO accordingly repeated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Tribunal by the revenue. The Tribunal s finding that the trucks were actually paid for by three demand drafts on 17th and 19th March, 1986 is also not disputed by the revenue. Actually two demand drafts for Rs.10.5 lakhs appear to have been issued to M/s. Pasco Automobiles. In para 6.20 of its order the Tribunal has found that the expenses on purchase of the trucks and the body building, registration, insurance, etc. were duly accounted for in the assessee s books of accounts. It also noted that the copies of the purchase bills were produced before the assessing officer along with the insurance cover note and registration books for all the trucks in the course of the original assessment proceedings. It was on these materials that the Tribunal held that the assessee was the owner of the trucks, which materials and finding were not disputed by the revenue. One of the conditions for the claim of depreciation prescribed by Section 32(1) of the Act is that the assessee should be the owner of the asset. The ownership thus stands established on the basis of the materials referred to by the Tribunal and relied upon by it. 9. The Tribunal also found that the assessee got the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to this affidavit in some detail in para 6.23 of its order and has also noted that the assessing officer, before whom the affidavit was filed did not summon Sardar Inder Singh to verify the correctness of contents of the affidavit nor did he make any inquiries through the Inspector. It was the opinion of the Tribunal that in these circumstances, the averments in the affidavit of Sardar Inder Singh remain uncontroverted. In addition, the Tribunal has also referred to the correspondence exchanged between the assessee and the two transport companies. 11. There are other materials on the basis of which the Tribunal held that the assessee did receive hire charges for letting out the trucks on hire. It has noted that the hire charges received by the assessee in the accounting year relevant to the assessment year 1986-87 were assessed as the assessee s income. The hire charges were also received in respect of the assessment year 1987-88. In the accounting year relevant to the assessment year 1987-88, the trucks were sold for a total price of Rs.15.91 lakhs as against the cost of Rs.25.73 lakhs. The Tribunal accepted the genuineness of the sale on the basis of the evidence adduced by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars 1984-85 and 1985-86. 14. It was only on the basis of the aforesaid materials that the Tribunal came to the conclusion in all the three years that the assessee was in receipt of hire charges and thus satisfied the second condition of Section 32(1) i.e. that the asset owned by the assessee should be used for the purpose of the business of the assessee. We have referred to the materials relied upon by the Tribunal in some detail because the first substantial question of law framed by this Court is whether the Tribunal had any material before it to come to the conclusion that the assessee was in receipt of hire charges. It is also to be noted that the assessing officer was not able to discredit or impeach the evidence adduced by the assessee to show that it was in receipt of hire charges. The assessing officer was not able to show that the claim was bogus. 15. For the aforesaid reasons the answer to the first question of law is in affirmative by holding that there was material before the Tribunal to come to the conclusion that the trucks in question were given on hire. There is no substantial question of law framed on the aspect of whether the assessee was the owner of the truc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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