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2013 (9) TMI 601 - AT - Income TaxRevenue appeal - tax effect is below 2 lakhs - whether maintainable Held that:- the appeals of the Department for the assessment years 2002-03 to 2004-05 are liable to be dismissed in limine, but we observe that the facts and the issue involved in the appeals for the assessment years 200203 and 2003-04 are inter-linked with the appeals for the subsequent assessment years, viz., the assessment year 2005-06 and the assessment year 2006-07. Therefore, it is necessary to decide the issue involved in the appeals for the assessment year 2002-03 as well on merits instead of dismissing the appeal in limine. Decided in favor of revenue. Disallowance of depreciation on the inflated price of windmill - Disallowance of depreciation of ₹ 9 crores considering the cost of per windmill as inflated by Rs. one crore considering the cost of per windmill of other buyers Held that:- Reliance placed on the cost price of windmill installed by M/s. Savita Chemicals Ltd. , i.e., the assessee as well as M/s. Savita Chemicals Ltd., have installed windmills on identical models at the same site and having many matching parameters. Considering the above facts, the assumption made by the Assessing Officer that the assessee inflated the cost price at Rs. one crore per windmill is not based on evidence and/or cogent material but is based on assumption and surmises - If the Assessing Officer wants to change the cost price, the onus is on the Assessing Officer to bring on record the relevant documents that price as shown by the assessee is not the actual price Commissioner of Income-tax (Appeals) has rightly held that disallowance of depreciation of ₹ 9 crores in the assessment year 2002-03 on the presumption that there was inflation in the purchase price at Rs. one crore per windmill is not justified Decided against the Revenue. Excessive lease rent paid by the assessee to be disallowed Application of section 40A(2) of the Income tax act - Held that:- IREDA had financed the said project and the lease rents payable by the assessee to M/s. Weizmann Ltd., has been structured taking into consideration the instalment of principal and interest payable to IREDA by M/s. Weizmann Ltd - Lease rents paid by the assessee is based on lending rates of the financial institution, namely, IREDA - Assessee had made payment of lease rent by account payee cheque to the lessor, i.e., M/s. Weizmann Ltd which had accounted for the same in its books of account - Nothing on record to prove that there was excessive payment of lease rents by the assessee Decided against the Revenue. Adjustment in the book value Disallowance of depreciation Held that:- Sub-section (2) of section 115JB of the Act provides the situation in which the Assessing Officer can make adjustment to the book profit - Considering the decision of the Hon'ble Supreme Court in the case of Apollo Tyres Ltd. v. CIT [2002 (5) TMI 5 - SUPREME Court], disallowance of depreciation made by the Assessing Officer of ₹ 31,68,000 in each of the assessment year under consideration is not justified Decided against the Revenue.
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