TMI Blog2006 (4) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... authority found that the market value of Tata Tea Ltd. would become relevant only when the assessee sells the share of Tata Tea Ltd. In this case, since there was an exchange of Tata Tea Ltd. for Consolidated Coffee Ltd., the first Appellate authority directed the Assessing Officer to levy capital gain by adopting the face value of the shares of Tata Tea Ltd. The only objection of the revenue is that if the shares of Tata Tea Ltd. were sold by the assessee, they could have realized the market value. Therefore, the market value should be taken as consideration for the purpose of levy of capital gains. We find that the very same issue of exchange of shares of Tata Tea Ltd. and Consolidated Coffee Ltd. came before the Madras High Court in the case of AR. Alagappa Chettiar v. ITO [2004] 267 ITR 749 for the assessment year 1991 -92. After considering an identical factual situation, the Madras High Court held that the capital gain shall be calculated on the basis of the value of one share of Tata Tea Ltd. at Rs. 147. In the case on our hand, the facts are identical to that of the case decided by the Madras High Court. In our opinion, the judgment of the Madras High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . is not applicable to the facts of this case. We find that the very same issue of expenditure on advertisement came before the Madras High Court in the assessee's own case for the assessment year 1984-85. The Madras High Court, after considering the provisions of section 58A of the Income-tax Act and the circular issued by the CBDT in circular No. 240 dated 17-5-1978 (1979) 117 ITR (St.) 17 held that the assessee-company is under a statutory compulsion to advertise the notice calling for deposits from the public. Therefore, the expenditure incurred on such advertisements is revenue in nature. The Madras High Court also held that this expenditure on advertisement for inviting deposit from public does not form part of sales promotion expenses. Since the issue raised by the revenue has already been adjudicated by the jurisdictional High Court in the assessee's own case, in our opinion, the judgment of the Madras High Court would bind on both parties and also this Tribunal. Therefore, by respectfully following the judgment of the jurisdictional High Court in the case of CIT v. Investment Trust of India Ltd. [2003] 264 ITR 506 (Mad.), we hold that the expenditure incurred by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the learned representative for the assessee, the transaction of leasing is between the assessee and M/s. Western Paques India Ltd. Therefore, M/s. Sandoz India Ltd., Bharuch, Gujarat has no role to play in the transaction between the assessee and M/s. Western Paques India Ltd. According to the learned representative, the first Bio-Gas Generating System was installed by the lessee M/s. Western Paques India Ltd. at Sandoz India Ltd., Bharuch in Gujarat State. After completion of the project, the plant was dismantled and retrieved by M/s. Western Paques India Ltd. The learned representative further submitted that the second Bio-Gas Generating System was proposed to be installed in Rohit Pulp Paper Mills Ltd. at Vapi in the State of Gujarat by the lessor M/s. Western Paques India Ltd. According to the learned representative, these informations were given by M/s. Western Paques India Ltd. which was passed on to the Assessing Officer. The plant which was originally planned to install at M/s. Rohit Pulp Paper Mills Ltd. could not be installed due to technical reason and therefore, subsequently, it was installed at the R D Centre of Western Paques India Ltd., Pune. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d back to M/s. Western Paques India Ltd. The first Bio-Gas Generating System was said to be installed in the premises of M/s. Sandoz India Ltd. in the State of Gujarat. Another equipment was proposed to be installed in the premises Rohit Pulp Paper Mills Ltd., Vapi, Gujarat. However, due to technical reasons M/s. Western Paques India Ltd. could not install the Bio-Gas Generating System in the business premises of M/s. Rohit Pulp Paper Mills Ltd. Therefore, it was installed in the premises of R D Centre of Western Paques India Ltd., Pune. It appeal's the assessee has also filed valuation certificate from the valuer in respect of the abovesaid two Bio-Gas Generating Systems. The claim of depreciation was disallowed only on the ground that the statement of the Senior Manager of M/s. Rohit Pulp Paper Mills Ltd. was not rebutted. The Assessing Officer has not examined anybody from Western Paques India Ltd. The statement recorded by revenue from the Senior Manager of Rohit Pulp Paper Mills Ltd. and another person from M/s. Sandoz India Ltd. may be relevant for the purpose of considering transaction between Western Paques India Ltd. and Rohit Pulp Paper Mills Ltd. on one hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction between the assessee and M/s. Western Paques India Ltd. In view of the above discussion, we do not find any infirmity in the order of the lower authority granting depreciation in respect of two Bio-Gas Generating System for assessment years 1992-93 and 1994-95. Accordingly, we confirm the same. 13. Let us now take ITA No. 123/Mds./99 for the assessment year 1995-96. The first ground of appeal is regarding grant of depreciation on Boiler Ammonia Plant, Solar-Power Rural Radio Telephone System, Waste Heat Recovery Equipment, Wind Electric Generator and Rolling Mills Rolls. Mr. Shaji P. Jacob, the learned D.R. submitted that the assessee claimed 100 per cent depreciation in respect of the abovesaid equipments. According to the learned D.R., the boiler was purchased from M/s. Madras Fertilizers Ltd. for Rs. 1,36,21,088 and the same was claimed to be leased back to the very same company by the assessee. According to the learned DR., the boiler plant which is said to be purchased by the assessee and leased back to M/s. Madras Fertilizers Ltd. was in existence for last few years. According to the learned D.R., the boiler was firmly embedded to earth. Therefore, it is an immo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, according to the learned D.R., the assessee is not entitled to any depreciation as claimed. The learned DR placed his reliance on the decision of the Special Bench of this Tribunal in the case of Mid East Portfolio Management Ltd. v. Dy. CIT [2003] 87 ITD 537 (Mum.). The learned D.R. has also placed his reliance on the judgment of the Delhi High Court in the case of Goyal Gases (P.) Ltd. v. CIT [1997] 227 ITR 536. The learned D.R. again placed his reliance on the judgment of the Karnataka High Court in the case of Avasarala Automation Ltd. v. Jt. CIT [2004] 266 ITR 178. 16. On the contrary, Mr. K.R. Rajagopalakrishnan, the learned representative for the assessee submitted that admittedly, the assessee purchased the asset from the respective companies. The entire documents including the invoices were produced before the lower authorities to show that the entire assets were purchased by the assessee on payment of purchase price. The learned representative for the assessee submitted that after the purchase, the assessee became the owner of the asset. Therefore, in its capacity as the owner of the asset, the same was introduced in the leasing business of the assessee. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction as one of sale and collected the sales tax at the applicable rate on the transaction. Therefore, according to the learned representative, it is not correct to say that the boiler which was purchased by the assessee from M/s. Madras Fertilizers Ltd. is not a movable property. According to the learned representative, boiler is one of the movable properties and the purchaser/assessee was made to pay sales tax at the rate of 8 per cent. According to the learned representative, in this case, the assessee has actually paid the sales tax and the transaction was also subject-matter of assessment under the Sales Tax Act. Therefore, according to the learned representative, the transaction has to be treated as one of sale transaction. The learned representative for the assessee further submitted that the assessee has filed entire details before the Assessing Officer in respect of Rolling Mills Rolls and Waste Recovery Equipment and other machineries. According to the learned representative, when the assessee has produced the materials relevant to the transaction, it cannot be rejected merely because no reply was obtained by the Assessing Officer from the supplier M/s. Somash S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found by the Assessing Officer as financial transaction and not a lease transaction. On appeal by the assessee, the first Appellate authority found that there was a genuine lease transaction and the assessee leased out the machineries in the course of its ordinary business of leasing. Therefore, the assessee is entitled to depreciation as claimed. The main contention of the revenue now before this Tribunal is that there was no lease back transaction and the entire arrangement is only a financial transaction and the assessee claimed as lease-back transaction in order to reduce the tax liability which is a colourable device. 19. We have carefully gone through the entire material available on record in respect of the transaction which is subject-matter of this appeal. Let us first examine the sale and lease back transaction between the assessee and Madras Fertilizers Ltd. The assessee purchased Boiler Ammonia Plant for a sum of Rs. 1,36,21,088. M/s. Madras Fertilizers Ltd. raised proper purchase bill and the sale was also subjected to levy of sales tax at the applicable rate. The sale of boiler was a sale of goods under Sales Tax Act. It is also not in dispute that the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, the first Appellate authority concluded that the arrangement is not a financial transaction. Therefore, the first Appellate authority directed the Assessing Officer to allow the depreciation on the boiler leased to Madras Fertilizers Ltd. 20. The main contention of the learned D.R. before this Tribunal is that the boiler is an immovable asset since it was firmly attached to land. The other contention of the learned D.R. is that the entire sale and lease back transaction is nothing but financial transaction. We have carefully gone through the decision of the Special Bench of this Tribunal in the case of Mid East Portfolio Management Ltd. After analyzing the various case laws on subject, the Special Bench of this Tribunal concluded that all the sale and lease back transactions as such cannot be considered to be dubious or colourable device aimed at tax evasion. According to the Special Bench, the real intention of the parties should be ascertained before concluding whether the transaction was loan transaction or as a lease back transaction. The Special Bench further observed that the genuineness of the sale and lease back transaction should be gathered from the intention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The case before the Special Bench as per the terms of lease, the lessee was under an obligation to purchase the equipment after the period of lease and the lessee has no option to refuse to purchase back the asset. The assessee did not take the insurance policy in respect of asset leased out. In the case before the Special Bench, there was no intention of the parties to hand over or transfer the goods to the other party. In those factual circumstances, the Special Bench found that the transaction was a notional one for the purpose of raising funds, therefore, it is only a financial transaction. The Special Bench further observed that the entire transactions were pre-planned. The Special Bench also found that the lessee company spread over 151 transactions for the purpose of raising funds. In those factual circumstances, it was found that there was no real intention to sell asset to the leasing companies. The Special Bench further found that there was a power of attorney authorizing the lessee company to sell the leased equipment. Therefore, the Special Bench observed that the power of attorney exposes the device adopted by the parties. In the case on our hand, the facts are enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is erroneous and prejudicial to the interest of the revenue. The order of the Commissioner was confirmed by the Income-tax Appellate Tribunal. On appeal by the assessee before the High Court, one of the substantial questions raised before the High Court was whether the sale and lease back agreement is a colourable device. The High Court, after considering various case laws including the judgment of the Supreme Court in the case of McDowell Co. Ltd v. CTO [1985] 154 ITR 148, held that the Commissioner cannot discord the sale and lease back agreement on the ground that the underlying motive of the assessee to enter into the said transaction was to reduce the income-tax liability. The Orissa High Court found that the agreement between the assessee and Orissa State Electricity Board is a genuine sale and lease back transaction. Accordingly, the Orissa High Court upheld the transaction between the assessee and the Orissa State Electricity Board and confirmed the order of the Assessing Officer granting depreciation in respect of the asset which was leased out to Orissa State Electricity Board. In our opinion, this judgment of the Orissa High Court is squarely applicable to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt may not be applicable to the facts of the present case. 24. The next transaction is with regard to leasing of Solar Power Rural Radio Telephone System to M/s. Renewable Energy Systems Ltd. The assessee purchased 370 Nos. Solar Power Rural Radio Telephone System for Rs. 1,00,88,420 at the rate of 27,266 per unit and the same was given back on lease. M/s. Renewable Energy Systems Ltd. in turn sub-leased the Solar Power Rural Radio Telephone System to the Department of Telecommunications. It appears from the order of the Assessing Officer that the invoices and other material relating to transaction were produced before him. The Assessing Officer disallowed the claim of the assessee only on the ground that the machinery was not put to use on or before 31-3-1995. The Assessing Officer observed that the Solar Power Rural Radio Telephone System could have been used only on or after the date on which the lease deed was signed by M/s. Renewable Energy Systems Ltd. with Department of Telecommunications. On appeal by the assessee, the first Appellate authority found that Solar Power Rural Radio Telephone System was put to use in the business of the assessee before 31-3-1995. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Madras Fertilisers Ltd. The agreement entered into between assessee and M/s. Sree Rayalassema Hi-Strength Hypo Ltd. are almost identical. The structural nature of the Waste Heat Recovery Equipment is also similar to one of the ammonia plant. The Valuation Report filed by the assessee clearly identifies the equipment which was leased out. In those factual circumstances and the reasons elaborately discussed in the case of Madras Fertilizers Ltd., we find the assessee is entitled to depreciation as claimed. Therefore, we uphold the order of the lower authority. 26. The next transaction arises for consideration is in respect of Wind Electric Generator with M/s. Prakash Industries Ltd. The Assessing Officer found that the land on which the Wind Electric Generator stands was not registered and no sale of electricity was commenced. The first Appellate authority, however, found that the assessee was in the business of leasing. Therefore, the commencement of commercial production of electricity could not decide the factum of eligibility for grant of depreciation. The fact remains that the assessee has purchased Wind Electric Generator from M/s. Prakash Industries Ltd. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k the same to M/s. Trident Steels Ltd. Merely because the supplier M/s. Somash Steel Manufacturing Pvt. Ltd. and the lessee M/s. Trident Steels Ltd. have not responded to the Assessing Officer that alone cannot be a ground to reject the claim of the assessee when the assessee has produced materials to show the purchase and lease transaction. Transit insurance may not be relevant in view of invoice, lease agreement, delivery challan are the material available on record to show the transaction. Unless and until the Assessing Officer found that the lease transaction was bogus, in our opinion, it cannot be disallowed merely on the ground that the supplier and the lessee have not responded. The assessee has produced invoices, lease agreement and other relevant material before the lower authorities to prove the ownership, existence of the equipment and the lease transaction. In those factual circumstances, the first Appellate authority, in our opinion, has rightly directed the Assessing Officer to grant depreciation. In view of the above discussion and for the reason discussed in the earlier part of this order in the case of M/s. Renewable Energy Systems Ltd., we do not find any infirmit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut I am recording my reasons hereunder for deferring with the view taken by the ld. Brother. 2. I entirely agree with the findings of ld. J.M. with regard to issue relating to valuation of shares of Tata Tea Ltd. in ITA No. 119/99 wherein CIT(A) order is modified to value the shares at Rs. 147 instead of Rs. 320 per share and on another issue of treatment of advertisement expenditure on inviting deposits which is a common issue in ITA Nos. 120, 121 and 122/99 wherein the order of CIT(A) is confirmed. 3. However, I am not able to agree with the findings of the ld. J.M on the issue relating to allowability of depreciation on Bio-Gas Generating System for assessment year 1994-95 in ITA No. 122/99 in ground No. 2.3. Further, the assessee has raised the same ground in ITA No. 120/99 for the assessment year 1993-94. 4. The assessee has purchased two Bio-Gas Generating system from M/s. Western Paques India Ltd. for consideration of Rs. 50 lakhs each and the same was leased back to M/s. WPIL. In the first instance, the assessee claimed that M/s. WPIL has installed the first plant at the premises of M/s. Sandoz, Bharuch, Gujarat and other one was installed at the premises of M/s. Rohi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence. The assessee instead of proving the existence of the assets changed the facts and switched over to new story which is very unfortunate. The assets cannot be installed and put to use without its existence. In the present case the existence of the asset itself is at vacuum. The Assessing Officer has given ample opportunity to the assessee to prove the existence of the assets. 9. The assessee has failed miserably to prove the existence of assets instead the assessee is changing the story often in support of its claim. All the evidence collected by the Department through the Investigation wing was properly placed before the assessee and comments sought for, but the assessee has failed to make use of the opportunity. The mere production of documents which show that a contract was made for purchase of the assets at a certain price does not conclusively establish the correctness of the claim made by the assessee specially where the Assessing Officer is of the opinion that in the deal the assessee has taken resort to a subterfuge or device in order to avoid tax liability which is liable to pay or otherwise has entered into the transaction which is illusory or colourable device. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax but he was also of the opinion that the Boiler is an integral part of whole manufacturing process and cannot be hived off without shutting down the plant for a considerable period and at a huge cost to the production processes and this was working round the clock and was embedded to the earth and it is an immovable asset and not severed from the earth before sale and the particular Boiler sold to the assessee-company is not clearly identifiable out of all the Boilers in the Ammonia Plant and sale invoice and Lease Deed do not clearly identify any particular Boiler sold to the assessee out of all the existing Boilers and all these reasons given by Assessing Officer were in cumulative in nature and are operative simultaneously. The CIT(A) has only considered the particular piece of findings of Assessing Officer and concluded the case. It is just like a blind person narrating the elephant. The Boiler plant in a Fertilizer company is just like a heart in a human body. If a person produces a sale invoice for sale of his heart and claim that he has sold his heart, nobody can believe it as it cannot be removed from a person when he is alive. Similarly, by merely producing a sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any material to show that the Boiler is not attached to earth. From this point of view also, I have to hold that Boiler is only immovable asset as being attached to land and there is no materials to show that seller intend to detach from land before sale. Being immovable asset, it does not fit into the definition of 'Goods' as in Sale of Goods Act. The intention of parties is only to arrange financial transaction and not that of effecting actual sale of Boiler. The verification of the intentions of the parties at the touch stone of the human probabilities shows a different picture. No document has been produced by the assessee to show that M/s. Madras Fertilizer Ltd. was intent to deliver the Boiler after' expiry of lease period. The Assessing Officer has clearly mentioned in Page 4 of assessment order that the particular Boiler which is said to be sold to the assessee is not clearly identifiable out of all the Boilers in the Ammonia Plant at the premises of M/s. Madras Fertilisers Ltd. and without identification of Boiler the sale cannot be made and thereby no lease also. Without D prejudice to the above, the assessee has never produced the depreciated value of the assets and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly the order of CIT(A) is reversed on this issue and order of Assessing Officer is restored. 13. Regarding allowability of depreciation on Solar Power Rural Radio Telephone System sale and leased back to M/s. Renewable Energy System Ltd., I am agreeing with the findings of the Ld. J.M. 14. Next issue relates claim of depreciation on Waste Heat Recovery Equipment which is sale and lease back transaction with M/s. Sree Rayalaseema Hi-Strength. The Assessing Officer disallowed the depreciation on this equipment on the same reason as in the case of Boiler, as the sale and lease back transaction with M/s. Madras Fertilizer Ltd. In this case, the Waste Heat Recovery Equipment was embedded to earth and land was not sold to the assessee and as such the system is immovable asset not fit into the definition of "Goods" as defined in Sale of Goods Act. In this case, on identical facts and circumstances, my finding is similar to that I have held in the case of Boiler sale and lease back transaction with M/s. Madras Fertilizer Ltd. and, hence, the assessee is not entitled for depreciation on this equipment. 15. The next issue is with regard to claim of depreciation on Wind Electric Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paques India Ltd. is proved by the documentary evidence produced before the lower authorities, whether the claim of depreciation could be rejected on the ground that the machinery was not put to use by the lessee? (2) Whether in the facts and circumstances of the case, when the assessee furnished the details of installation, bio-gas generating systems to the Assessing Officer as per the information furnished by M/s. Western Paques India Ltd., can the statement recorded from the personnel of M/s. Sandoz India Ltd. and M/s. Rohit Pulp and Papers Ltd. be relied upon without examining anybody from M/s. Western Paques India Ltd. for doubting the existence of the machinery especially when the explanation of the assessee to the show-cause notice was not controverted or found to be false? (3) Whether in the facts and circumstances of the case, for grant of depreciation to the assessee in respect of transaction of lease between the assessee and M/s. Western Paques India Ltd., the proof of transaction between M/s. Western Paques India Ltd. and Sandoz India Ltd. or M/s. Rohit Pulp Paper Mills Ltd. are relevant especially when both the Members agreed that the Tribunal was not concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Special Bench of this Tribunal (statutory authority)? (8) Whether in the facts and circumstances of the case, the decision of the Special Bench of the Tribunal in the case of Mid East Portfolio Management Ltd. is distinguishable? (9) Whether in the facts and circumstances of the case, there was a genuine lease transaction between the assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd. in respect of Waste Heat Recovery Equipment? (10) Whether in the facts and circumstances of the case, the registration of land is a condition precedent for grant of depreciation in respect of lease transaction between the assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd.? (11) Whether in the facts and circumstances of the case, in view of the specific agreement between the parties to redeliver Waste Heat Recovery Equipment to the assessee after the expiry of lease period and there was no obligation on the part of the assessee to resell the same to the lessee, can it be said that there was no intention to sell Waste Heat Recovery Equipment? (12) Whether in the facts and circumstances of the case, there was a genuine sale and lease back of Wind Electric Generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on between M/s. Western Paques India Ltd. and Sandoz India Ltd. or M/s. Rohit Pulp Paper Mills Ltd. are relevant especially when both the Members agreed that the Tribunal was not concerned with the subsequent transaction in the very same older while dealing with Solar Power Radio Telephone System, the lease transaction between the assessee and M/s. Renewable Energy Systems Ltd.? (4) Whether the Assessing Officer is justified in disallowing the claim of depreciation for the assessment year 1993-94 in a proceeding under section 154 in view of the debatable nature of issue? Questions in ITA No. 123 (Mds.)/1999:- (1) Whether in the facts and circumstances of the case, there was genuine sale and lease back transaction of boiler between the assessee and M/s. Madras Fertilizers Ltd.? (2) When the sale of boiler was subjected to sales tax and it was treated as sale of goods under the Sales Tax Act, can the sale of said boiler be doubted in the income-tax proceeding especially when the jurisdictional High Court in the case of Anandha Metal Corporation held that the return accepted by commercial tax department is binding on the income-tax authorities? (3) When admittedly the boil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ste Heat Recovery Equipment? (12) Whether in the facts and circumstances of the case, there was a genuine sale and lease back of Wind Electric Generator between the assessee and M/s. Prakash Industries Ltd.? (13) in the facts and circumstances of the case, when the assessee, a leasing company introduced the Wind Electric Generator in the leasing business, whether the commercial production of electricity by the lessee is a pre-condition for grant of depreciation to the assessee in respect of leasing transaction? (14) In the facts and circumstances of the case whether there was a genuine lease transaction between the assessee and M/s. Trident Steels Ltd. with regard to Rolling Mills Rolls? (15) When the assessee has produced sufficient material to prove the purchase and lease back of Rolling Mills Rolls to M/s. Trident Steels Ltd., can the claim of the assessee be rejected merely because the supplier M/s. Somash Steel Manufacturing Pvt. Ltd. and the lessee M/s. Trident Steels Ltd. have not responded to the Assessing Officer? In regard to ITA Nos. 119 122/(Mds.)/1999 there is no disagreement between the Learned Members. Hence reference in respect of these appeals appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 154 is also stands covered by the decision of the Apex Court rendered in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50. In this case the Hon'ble Supreme Court has held that a mistake apparent on the record must be an obvious and patent mistake and not something which can lie established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. The issue involved in the present appeal is a debatable issue. As such it cannot be rectified by resorting to section 154. I concur with the decision of the learned Judicial Member in this regard. 6. ITA No. 123(Mds.)/1999 (Assessment year: 1995-96):- The first issue relates to the allowability of depreciation on Boiler-Ammonia Plant in respect of the sale and lease hack transaction with M/s. Madras Fertilizers Ltd. 7. I have considered the rival submissions in the light of material placed before me and the precedents relied upon. The learned Accountant Member was of the opinion that the transaction was in the nature of a financial transaction and as such the assessee was not entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are valid and must be upheld. We therefore hold that the assets (Air pollution equipment in the case of Mid East Portfolio Management Ltd. and boilers in the case of ICICI Ltd.) are movable assets and that is how the cases have proceeded so far. In this view of the matter it is not necessary to discuss the authorities cited by both sides on the point." The boiler was held to be movable asset. No other decision of binding nature was brought before me in this regard. Respectfully following the precedent I agree with the view taken by the learned Judicial Member in this respect. Question Nos. 1 to 8 in ITA No. 123/Mds./1999 stand decided accordingly. 9. The next issue contained in question Nos. 9 to 11 relates to the genuineness of the sale and lease back transaction between the assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd. in respect of waste heat recovery equipment. The only objection raised by the revenue in this regard was that the land on which the equipment was fixed was not transferred to the assessee. The learned Accountant Member held that as it does not fit into the definition of goods as defined in the Sale of Goods Act, depreciation was rightly denied by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponse to the letters issued. The details of transit insurance were not given. The learned Accountant Member set aside the matter to the Assessing Officer for verification. Both the parties agreed that the issue may be examined with reference to the direction of the learned Accountant Member. Ex consequenti I agree with the decision of the learned Accountant Member in this regard. 14. The matter will now go before the Regular Bench for deciding the appeals in accordance with majority Per Chandra Poojari, Accountant Member. - As the learned Members differed in their opinion on the point in adjudication in the cases in ITA Nos. 120, 122 123/Mds./99, after due deliberations between them, the Hon'ble President of the Tribunal, on a reference to him, the Point of Difference, appointed a Third Member to hear the case and give his opinion. Accordingly, the Third Member heard these cases and gave his opinion. In ITA Nos. 119 121/Mds./99, there is no difference of opinion. However, they were referred by mistake to the learned Third Member. 2. I.T.A. Nos. 120 to 122/Mds./1999 : In these two appeals, the learned Third Member, by his order dated 6-4-2006, has concurred with the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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