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2015 (2) TMI 489 - ITAT BANGALOREReopening of assessment - excessive depreciation claim on rolling mill rollers and vehicles - Held that:- The learned Departmental Representative correctly submitted that the assessee has not questioned the jurisdiction of the AO during the pendency of the assessment proceedings nor did he challenge the jurisdiction in the appellate proceedings before the CIT(A). Therefore, he is precluded from challenging the jurisdiction of the AO at this stage before the Tribunal. As the assessee has appeared in the proceedings before the AO as well as the CIT(A) without any protest and therefore in view of the provisions of sec.124(3)(a), we are of the opinion that the assessee is not entitled to raise this question at this stage. Therefore ground relating to validity of the reopening of the assessment u/s 148 of the Act is rejected. - Decided against assessee. Notice u/s 143(2) challenged as barred by limitation - Held that:- The proviso to sec.148 clearly applies to the facts of the case before us and as provided under clause (b) of the said proviso, the notice which is u/s 143(2) issued after the expiry of 12 months from the end of the month in which the return was filed but before the expiry of the time limit for making the assessment, re-assessment or re-computation as specified in sub-sec.(2) of sec.153 shall be deemed to be a valid notice.- Decided against assessee. Disallowance of depreciation on rolling mill rollers - Held that:- The assessee is not eligible for the claim of depreciation on the leased assets which are found to be not in existence. The learned counsel for the assessee, in addition to the above, has raised an alternative contention that if the lease of rolling mill rollers was held to be a bogus lease, then income offered by the assessee as 'lease rentals' should also be reduced and the tax levied accordingly. This contention of the assessee appears to be reasonable. When the lease itself has been held to be only a paper transaction and a bogus transaction, then income there-from also cannot be accepted. In view of the same, we direct the AO to consider the contention of the assessee and reduce the lease rental income from the taxable income and levy tax accordingly subject to the condition that the assessed income shall not be less than the returned income. - Decided in favour of assesee for statistical purposes. Higher rate of depreciation - @40% on leased out trucks allowed by CIT(A) OR 25% allowed by the AO treating the 'leased trucks' as plant and machinery - Held that:- CIT(A) has appreciated the contention of the assessee that leasing is also a part of hiring and therefore there is bound to be higher wear and tear due to rough use and the Hon'ble Madras High Court in the case of CIT vs. Madan & Co.(2001 (9) TMI 50 - MADRAS High Court ) has held that the essence of higher depreciation on assets given on hire is that there is higher wear and tear due to rough use. The Revenue has not been able to present before us any decision to the contrary or any evidence to the contrary. In view of the same, we are not inclined to interfere with the order of the CIT(A). - Decided against revenue.
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