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2012 (9) TMI 483 - HC - Income TaxDisallowance of deduction towards renovation of property - AO treated the transactions as bogus - ITAT allowed it - Held that:- The expenditure was incurred, according to the assessee, in anticipation of its entering into joint venture agreement with the Japanese collaborator & the premises in question over which the expenditures were made were leased to the assessee for a period of five years, the assessee further subleased the premises for the same period - it is not understandable as to why the original lease could not be cancelled when the original owner PHWA and sublessee i.e. PWH are under the same management - There is nothing mentioned in clear words in the said agreement as to why lease rental to be charged from PWH is as high as Rs. 461, 500/- per quarter as against Rs. 105, 000/-per quarter payable by assessee to PWHA, in fact in agreement dated 28-05-1996 even the basic facts would as to how assessee acquired the right to lease the premises to PW- H are not mentioned. As there is no reference of earlier agreement dated 05-04-1996 in agreement dated 28-05-1996 in spite of the fact that both agreements were signed by the same person these facts leads to the conclusion that the said arrangement of lease and sublease is not bona fide genuine - against assessee Disallowance of depreciation on renovation - ITAAT allowed it - Held that:- As the transaction of lease and sub lease was proved to be bogus no question of allowance of depreciation arises here - against assessee
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