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2017 (1) TMI 1725 - AT - Income TaxDisallowance of depreciation on assets leased to GEB and Prakash Industries - HELD THAT:- CIT(A) while deciding this issue for the A.Y.1993-94 has been dealt by the Income Tax Appellate Tribunal, Ahmedabad Bench. CIT(Appeals) was not justified in rejecting the assessee’s claim of depreciation and holding that the transaction in question were in the nature of financing transactions simply by observing that facts and circumstances of the case was similar to the facts and circumstances of the case of ICICI Bank Ltd. because prior to amalgamation / taking over the affairs of M/s.Anagram Finance Ltd. by ICICI Bank Ltd., M/s.Anagram Finance Ltd. was an independent Limited Company (during the previous year relevant to Assessment Year 1993-94) and was carrying on independent business of leasing and financing. Therefore, the nature of transaction carried on by M/s.Anagram Finance Ltd. should have been considered independently irrespective of the findings in the case of ICICI Bank Ltd. - Decided against revenue. Disallowance of the depreciation on leased assets with Usha India Ltd., Sayaji Hotels and Shaan Packaging - letters were issued to the supplier which were returned unserved therefore the supplier were not in existence - HELD THAT:- The claim of the assessee was declined on the ground of that the letters were written to the supplier which were returned unserved and the supplier denied the supply or plant was not in existence. On appraisal of the above said evidence produced before us the finding of the AO as well CIT(A) does not seem reasonable. The evidence adduced by the assessee nowhere examined and discussed by the AO as well as CIT(A). Since the matter of controversy has not been decided by discussing the evidence adduced by the assessee, therefore finding of the CIT(A) is not liable to be sustainable in the eyes of law. We set aside the finding of the CIT(A) on this issue and direct the Assessing Officer to examine the issue afresh in the light of the evidence adduced by the assessee and decide the issue in accordance with law after giving an opportunity of being heard to the assessee. Accordingly, this issue is decided in favour of the assessee against the revenue. Disallowance of depreciation on the transaction with GEB - Claim declined by the Assessing Officer on the ground of that the supplier sold the goods to the GEB and the GEB has not transfer the ownership to Anagram and the machinery was not supplied because only parts were supplied - HELD THAT:- AO as well as CIT(A) has declined the claim of the assessee on account of this facts that the supplier sold the goods to the GEB and the GEB did not transfer the ownership to Anagram and the machinery was not supplied because parts were supplied. The evidence adduced by the assessee nowhere examined and discussed by the AO as well CIT(A). Since the matter of controversy has not been decided by discussing the evidence adduced by the assessee, therefore in the said circumstances, we are of the view that the finding of the CIT(A) is not liable to be sustainable in the eyes of law. Therefore, we set aside the finding of the CIT(A) on these issues and direct the Assessing Officer to examine the issues afresh in the light of the evidence adduced by the assessee by giving an opportunity of being heard to the assessee. Disallowance of depreciation in sale and lease back transaction - HELD THAT:- The present case is for the A.Y.1994-95 and the CIT(A) has declined the contention of the assessee on the ground of that the explanation 4A to the Section 43(1) of the Act was clarifactory in nature whereas the legal position is quite different which has been discussed above specifically in view of the law settled in Berlia Chemicals & Traders (P) Ltd. Vs. Assistant Commissioner of Income Tax 1999 (10) TMI 740 - ITAT MUMBAI and also Hon’ble Madras High Court in case titled as Om Sindhoori Capital Investments Ltd. Vs. Joint Commissioner of Income Tax 2004 (12) TMI 44 - MADRAS HIGH COURT Accordingly, we are of the view that the disallowance on depreciation on sale of lease back transaction is wrong against law - Decided against revenue.
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