TMI Blog1994 (5) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... the invoices was also duly paid to the DCM. Even before the trucks could be delivered to the assessee, the assessee had entered into a lease deed dt.16th March, 1989making it effective from1st March, 1989with the manufacturer of the trucks, namely, DCM Toyota Ltd. The total value of the trucks as paid to DCM Toyota Ltd. was Rs. 36,26,850. The lease was initially for a period of 21 months which was subsequently increased in the subsequent years. The objection of the authorities was that the trucks though were available with the manufacturer, though there was evidence indicating delivery of the same to the assessee, by means of payment of various charges and temporary permits for allowing the truck to ply on the road, etc., but, since, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartmental Representative placed heavy reliance on the orders and submitted that it was a camouflage device especially with regard to trucks being supplied or leased out to the manufacturer itself. 2. We have given our due consideration to the various materials that have been placed on our record. The undisputed facts in the instant case are that the trucks have been registered in the name of the assessee before the end of the accounting period. The lease agreement with M/s DCM Toyota Ltd. dt.16th March, 1989, clearly shows they had clearly agreed to place some security deposit and take the various trucks on hire and on that basis had taken delivery of the trucks from the assessee. The income on hire had also been paid which has been sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer summoned the director of NAPL and recorded a statement on9th Oct., 1990. In this statement, the managing director corroborated the statement of the assessee that it had sold 3,000 cylinders to the assessee-company and that, it had taken them on lease as well. He also corroborated that the giving delivery of and taking delivery was simultaneously done. He also corroborated that it had 2,162 cylinders in stock and the rest were with certain parties. He submitted that the arrangement of purchase and then taking the same on lease was beneficial to that company because in the process, the assessee made available to it, finance of Rs. 5 lakhs, i.e., Rs. 51 lakhs being received as sale price of which Rs. 46 lakhs was deposited as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and I will produce the same tomorrow in this office. However, so far as I remember the delivery was effected around the same time at our factory inFaridabad. In fact on the same day we took all these cylinders back on lease as per agreement dt.25th March, 1989@ Rs. 2 per cylinder. Both the sale of cylinders and taking back on lease were "as is where is", i.e., some of the cylinders were in the factory atFaridabadwhile others were with certain parties, the complete address of which will be given by me. The lease was initially for a period of 13 months but it is continuing till today as we are paying lease rent to Peacock Chemicals. Q. From where you purchased these cylinders which were sold by you and whether any purchases were ever made f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and almost the entire sale proceeds of Rs. 51 lakhs have been shown as income in the return for the asst. yr. 1989-90. Q. What you have gained in this transaction, i.e., by selling 3,000 cylinders for Rs. 51 lakhs and then showing it as your income, then paying lease rent of Rs. 2 per cylinder and by Rs. 46 lacs in the form of security? A. I have got Rs. 5 lacs and cash flow which was much needed in view of tight financial position of the company. Q. Have you raised any loan from Goyal Gases or Peacock Chemicals? A. No loans have been raised from any of them. The above statement has been given of my free will and without any coercion." After considering the above and also the invoice that has been raised on the assessee and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to depreciation. We direct the Assessing Officer to allow the depreciation on the photo-composing and typesetting machine. 6. The next issue relates to disallowance of user charges of trucks paid to Goyal Gases Pvt. Ltd. The issue in this regard is identical to the one raised by the assessee for asst. yr. 1988-89, which appeal was heard along with the present appeal. The reasonings as advanced by the assessee are recorded in the order of that assessment year and similar arguments as advanced by the Department are also recorded in that assessment year's appeal orders. Detailed reasonings have been given for coming to the conclusion that the disallowance was uncalled for which reasons equally apply to the present assessment year as well. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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