TMI Blog2015 (2) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (b) of the said proviso, the notice which is u/s 143(2) issued after the expiry of 12 months from the end of the month in which the return was filed but before the expiry of the time limit for making the assessment, re-assessment or re-computation as specified in sub-sec.(2) of sec.153 shall be deemed to be a valid notice.- Decided against assessee. Disallowance of depreciation on rolling mill rollers - Held that:- The assessee is not eligible for the claim of depreciation on the leased assets which are found to be not in existence. The learned counsel for the assessee, in addition to the above, has raised an alternative contention that if the lease of rolling mill rollers was held to be a bogus lease, then income offered by the assessee as 'lease rentals' should also be reduced and the tax levied accordingly. This contention of the assessee appears to be reasonable. When the lease itself has been held to be only a paper transaction and a bogus transaction, then income there-from also cannot be accepted. In view of the same, we direct the AO to consider the contention of the assessee and reduce the lease rental income from the taxable income and levy tax accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation at 40% on vehicles holding that the vehicles are not used for running on hire but are only leased out. The Assessing Officer (AO) allowed depreciation on the vehicles at the rate of 25% as applicable to plant and machinery. 3. Aggrieved, the assessee preferred appeals before the CIT(A) who confirmed the order of the AO as far as disallowance of depreciation on rolling mill rollers is concerned but granted relief to the assessee by granting higher rate of depreciation on leased out vehicles. Aggrieved by the relief granted by the CIT(A), the Revenue is in appeal before us while the assessee is in appeal against the confirmation of the disallowance of depreciation on the rolling mill rollers as well as assumption of jurisdiction u/s 148 of the Act. 4. In the appeal before us, the assessee has raised grounds that the AO had erred in assuming jurisdiction u/s 148 of the Act without there the conditions precedent for the issue of notice being present. Thus, according to the learned counsel for the assessee, the notice issued was bad in law and consequently the assessment also becomes bad in law which is liable to be quashed. 5. At the time of hearing, learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) without any protest and therefore in view of the provisions of sec.124(3)(a), we are of the opinion that the assessee is not entitled to raise this question at this stage. Therefore, we are not inclined to entertain this argument of the assessee and reject the same. In view of the same, ground No.2 relating to validity of the reopening of the assessment u/s 148 of the Act is rejected. 6. The next ground raised by the assessee is that the notice u/s 143(2) is barred by limitation. In this connection, the learned counsel for the assessee submitted that the assessee has filed its return of income on 11-1-2001 for both the assessment years while the notices u/s 142(1) were issued on 25-1-2001 and notice u/s 143(2) was served on 4-2-2002 i.e. well beyond 12 months from the end of the month of filing of the return. Thus, according to him, the notice u/s 143(2) is barred by limitation and consequently the assessment completed u/s 143(3) read with sec.148 is invalid. The learned Departmental Representative, on the other hand, produced the assessment records before us and submitted that the notice u/s 143(2) was issued on 31-1-2002 and therefore, it was well within time. Even otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of law, we are unable to accept the contentions or arguments of the assessee on this issue. In view of the same, ground No.3 is also rejected. 8. As regards ground No.4 is concerned, the learned counsel for the assessee has fairly admitted that the issue is covered against the assessee by the decision of the Hon'ble High Court of Karnataka in ITA No.523/2006 dated 4-9-2013 in the case of CIT vs. M/s.MAA Communication Bozell Ltd. wherein the Hon'ble High Court has, at para 18 of its order, concluded as under: 18. In the instant case the Assessing Officer on the basis of the survey conducted in the premises of BSAL found that lease has been created on the basis of the non-existing assets. Accordingly notice has been issued. All the above facts go to prove that hire purchase and lease transaction between the assessee and KMFL on one hand and the assessee and BSAL on the other hand were only paper transaction and there was no genuine purchase of lease of assets. By entering into paper transaction, the assessee has benefitted by availing depreciation at the rate of 100% of the value of the assets in question. However, as the assessee has not been able to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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