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2012 (11) TMI 670 - HC - Income TaxNotice of Reassessment – AO held that he had reasons to believe that the amount declared as hire-charges were, in fact, interest. - Following the decision of court in case of [Syal Leasing Ltd. Versus Assistant Commissioner of Income-Tax And Another 2003 (9) TMI 47 - PUNJAB AND HARYANA HIGH COURT ] held that:- AO has already determined that the relevant agreements executed by the petitioner were with a view to finance the vehicles and that those were not leasing agreements. That finding of the AO was affirmed by the CIT (Appeals). Feeling aggrieved by the orders of the CIT (Appeals), the petitioner has preferred an appeal before the Income-tax Appellate Tribunal which is pending - In view of the findings recorded by the AO in the case of the assessee for the AY 1998-99 AO had sufficient reason to believe to issue a notice u/s 148 – decided against Assesssee. Real nature of the transaction - Hire purchase vs Sale - Held that:- Total amount payable and the period of payment, as hire-charges is part of the agreement; the sample agreement produced - executed by the assessee with one Sh. Amit Singh, discloses that the hirer was to pay Rs.12,500/- per month, effective from 10.02.2001 and that the hirer could, at any time during the hire, become owner of the vehicle on making payment of hire fully for the whole period of agreement. Having provided so, the agreement is silent as to what constituted the period of its tenure. Hire-purchase concerns two elements - bailment and sale in the sense that it visualizes an eventual sale which fructifies when the option is exercisable by the purchaser after fulfilling the terms of the agreement. In the present case, however, the tenure of the agreement itself is unknown; the hirer, in fact, is the registered owner of vehicle. Having regard to these features and the other discussed elaborately by the Tribunal and the CIT(A), this Court is of the opinion that findings impugned in this case do not call for any interference on the merits. This question too is answered against the assessee - appeal is meritless; it is, therefore, dismissed. Decision in K.L. Johar & Co. (1964 (11) TMI 58 - SUPREME COURT OF INDIA), followed
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