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2018 (9) TMI 1749 - AT - Income TaxClaim of depreciation on leased assets i.e. milk cans - Held that:- Admittedly, it is the assessee who had claimed depreciation, therefore, it was incumbent upon the assessee to prove with plausible evidence that it owned certain assets which had been leased and fetching rent. In the present case, enquiry made by the revenue revealed that the entity where from such assets were purchased was not having capacity to manufacture. Entire claim was found to be bogus. It is further established by the revenue that purchase consideration was routed back, hence, the entire claim proved to be a colourable device. Under these facts, the submission of the assessee is devoid of any merit. Such claim cannot be allowed. The ground Nos.4 to 6 are dismissed. Deferred revenue expenditure - Held that:- Such a claim cannot be entertained both in facts and in law, during the year under consideration as the fact whether such expenses were genuinely incurred were never examined in the relevant assessment year and looking to the state of affairs of the appellant company in absence of proper scrutiny and examination of such claim of expenses in the relevant assessment year, such claim cannot be accepted in the present assessment year, more so when such claim was not pressed for deduction for 1/5th of expenses in the previous assessment year. The appellant apart from furnishing break up of expenses has failed to establish admissibility of 20% of such expenses during the year under consideration, as in the then prevailing position of law the concept of deferred revenue expenses was not recognised. The claim has to be examined in view of the law as applicable in the relevant assessment year and on that count such claim fails. Addition in respect of interest u/s 220(2) - Held that:- In view of the CBDT circular No.334 dated 3.4.1982 and the decision of the coordinate bench in the case of M/s. Narad Investment & Trading Pvt. Ltd. Vs. DCIT [2011 (10) TMI 663 - ITAT MUMBAI], we direct the assessing officer to charge interest from the date when fresh assessment is made. This ground of the assessee’s appeal is allowed. Lease rent income treated as bogus - Held that:- After considering the totality of the facts and materials placed before us, we do not find any infirmity in the order passed by the CIT(A) as the assessing officer itself has considered the lease transaction as bogus and disallowed the depreciation. Under these facts, the revenue cannot now claim that the assessee has earned income from lease rent. This ground of the revenue’s appeal is dismissed. Exclusion of merchant banking income from the total income assessed by him - Held that:- A.O., in these circumstances with the facts and evidences on record, couild not and should not have drawn adverse inference on account of non delivery of fresh summons issued after 10 years of the end of relevant financial year. In fact, the documents on record clearly establish that such company was in existence at the relevant period of time and even assessment u/s 143(3) was completed for the same assessment year 1996-97. The Merchant banking income offered at ₹ 27 lacs being not a real and genuine income accrued to the income in terms of MOU and other evidences on record and could not be validly has been held by Hon'ble Supreme Court in the case of Bokaro Steel [1998 (12) TMI 4 - SUPREME COURT], Godhra Electricity Co. Ltd.[1997 (4) TMI 4 - SUPREME COURT] and Shoorji Vallabhdas & Co [1962 (3) TMI 6 - SUPREME COURT] as noted above. Accordingly, A.O. is directed to exclude the Merchant banking income at ₹ 27 lacs from the total income assessed by him
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