9911796707
TMI Blog2006 (11) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... long acted under a bona fide belief in the matter. He further failed to appreciate that the penalty proceedings are separate than the regular assessment proceedings. The reasons assigned by him for upholding the penalty are wrong." 3. The Assessing Officer has imposed the penalty under section 271(1)(c) of the Act by observing and holding as under: "Original assessment in this case was completed under section 143(3) of the Income-tax Act on 24-9-1997 on a total income of Rs. 3,98,52,530. In this order the assessee's claim for depreciation amounting to Rs. 69,49,010 was allowed which includes half the depreciation of Rs. 50 lakhs on forging rolls worth Rs. one crore as the same has been used for a period of less than 180 days during the year under consideration. Balance depreciation has been claimed in assessment year 1995-96. During the course of assessment proceeding for assessment year 1995-96, it was found by the Assessing Officer that assessee's claim for depreciation on forging rolls is not genuine. The Assessing Officer found that forging rolls have been purchased by the assessee from M/s. Prakash Industries Ltd. and has been given back on lease to the same party. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2000. The assessee has claimed that its claim for depreciation has erroneously been not allowed. The assessee has claimed that it has purchased forging rolls from M/s. Prakash Industries Ltd. on 21-3-1994 and given the same to the same company on lease. The assessee has claimed that in original assessment proceeding his claim for depreciation was accepted under section 143(3) of the Income-tax Act, therefore, the matter has obtained finality. The assessee has further submitted that though the Assessing Officer has referred the matter to DDIT(Inv.), Jabalpur for inquiry about the possession and actual use of rolls but the assessee claimed that DDIT(Inv.), Jabalpur only forwarded a copy of the enquiry conducted by him in another case who has also entered into similar transaction with RPG Telecom Ltd. and not in the case of assessee. The assessee claimed that the Assessing Officer simply employed same yardstick in its case. The assessee claimed that its claim for depreciation has not been allowed only on the ground that transaction is not genuine and assessee could not prove the identity of the assets. The assessee has submitted that the transaction in question has been treated as sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Limited and company has lost nearly Rs. 34 lakhs in the transaction as full rental has not been paid by that party. The assessee has claimed that in view of this fact no penalty can be leviable. I have considered the submissions of the assessee. The assessee has made claim for depreciation of Rs. 50 lakhs in the return of income furnished on 30-11-1994. This depreciation claim was 50 per cent of the value of heavy structural rolling mill rolls claimed to have been purchased by the assessee on 21-3-1994 for a sum of Rs. one crore. However, the claim of the assessee was rejected in assessment year 1995-96. In that year though assessee has filed appeal but the same was not contested as the assessee has availed the benefit of KVSS scheme. The issue could not be finally settled in that year. Even in this year though the assessee has filed appeal against orders passed under section 143(3) read with section 147 on 30-9-1999 but the same has been withdrawn. Even the assessee's application for revision under section 264 has been rejected by CIT-I, Pune vide order dated 4-5-2000. In this case it is found that the assessee's claim of purchase of forging rolls is not evidenced either by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer simply used a survey report against him, which has been carried out by DDIT, Jabalpur in other case has no basis because though the survey was carried out in other cases but the intention of the survey party was to look into the genuineness of all sale and lease back transaction carried out by M/s. Prakash Industries Limited. This will cover the case of the assessee also. Further though forging rolls are eligible for depreciation separately as per provisions of Income-tax Act, it is found that M/s. Prakash Industries Ltd. has not purchased these assets separately. These assets which has been claimed to have been purchased by the assessee forms part of heavy structural mill equipment purchased by M/s. Prakash Industries Ltd. for a sum of Rs. 2,08,00,000 on 31-3-1993. Once the purchase has been made by any party consisting of many items that are necessary for production, the assessee cannot split these assets and claim depreciation on each asset separately unless the owner has physically separated these assets and used it at different places. Therefore, by purchasing a part of heavy structural mills equipments the assessee has become a fractional owner of the structural mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as share capital. This issue was mainly for expansion of company's facilities, administrative buildings etc. Since the proposed plans were going to take some time. It was thought prudent that the funds be used in the meanwhile in best possible manner to generate further revenues. One of the ways thought was the investment in lease financing, which will also offer certain tax shield to the company. M/s. Tata Finance Ltd., with whom the company had some earlier dealings in the fields of bills discounting etc. and a reputed organization in the field of financing, suggested the proposal of Prakash Industries Ltd. for a sale and lease back transaction of Rolling Mill Rolls for Rs. 100 lakhs, the said rolls carry 100 per cent depreciation under the Income-tax Rules, the proposal envisaged a sale and lease back of the rolls from Prakash Industries for Rs. 100 lakhs for a period of 5 years. Praj was to get Rs. 134 lakhs as lease rentals in the period of 5 years. After considering the tax advantages, the average annual return worked out to be about 16.50 per cent after tax. The Board considered the proposal in its meeting dated 28-2-1994, and approved the same. .... Prakash Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment remained unchallenged. As regards Assessing Officer's contention that the transaction is a sham one, we submit that the conclusion of the Assessing Officer is without any basis. As has been stated earlier, outside parties such as Tata Finance, Chartered Engineer, Chartered Accountant, Insurance Company etc. were involved in the transaction. The assessee has also obtained original transportation challans from Prakash Industries for purchase of Heavy Structural Rolling Mill Equipment with accessories from M/s. TISCO, Jamshedpur...... The value for 65 rolls was stated to be Rs. 100 lakhs by Prakash Industries which was got valued by the assessee through an independent Chartered Engineer (annexure '9') and only then proceeded in the matter.... The assessee purchased the rolls from Prakash Industries vide their invoice No. PIL/SID/P&M/93-94, dated 23-1-1994 for Rs. 100 lakhs (annexure '4'). The assessee also settled the amount of Rs. 100 lakhs with Prakash Industries through cheques/DD (annexure '5'). The physical delivery to Pune and back to Champa in M.P. was not found practically feasible in view of the huge weight of the assets (about 400 tons) and high transportation costs. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Following further arguments were made by the assessee during the appellate proceedings before the CIT(A), which are stated by the CIT(A) in para 7 of his order: "7. During the appellate proceedings, the following arguments were made:- (a) In such a situation, it is difficult to term the transaction as a non-genuine one, especially when third party institutions like Tata Finance, New India Insurance, Chartered Engineer etc. are involved. (b) The Assessing Officer should have appreciated that physical delivery was not practical and mode of delivery, whether actual or constructive, is not a deciding factor in determining whether sale is genuine or not. In fact, section 33 of the Sale of Goods Act postulates that the delivery of goods may be made by doing anything which the buyer and seller agree to treat as delivery. The Assessing Officer's contention, therefore, that there should have been actual delivery is wholly irrelevant in the context. Moreover, the Assessing Officer in the assessment proceedings for assessment year 1995-96 has stated that the assessee has taken constructive possession, which comments are repeated by the Assessing Officer in the order under section 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nized as such by the Act. He failed to appreciate that as far as the assessee's claim is concerned, it is in respect of 65 rolls worth Rs. 100 lakhs, which are separate assets in itself, and these 65 rolls are owned fully by the assessee, and not fractionally." 7. After considering the submissions of the assessee and the facts and circumstances of the case, the CIT(A) sustained the penalty by the Assessing Officer by saying as under: "8. I have considered rival submissions. In the first place it must be observed that the appellant's contention that it had purchased assets and leased them out and, therefore, it was nothing but financing the leasing business, is a contention far from reality. There has to be a difference between financing leasing activity or 'lease financing' and 'leasing finance'. In the prior case, a concern purchases an asset as a genuine purchase and leases it out to a third party earning the income from lease rent necessarily whether with or without the benefit of incremental gain by way of higher claim of depreciation. Usually, such cases are of the nature of purchase of vehicles, heavy duty vehicles used for commercial purposes or otherwise, purchases on pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . One of the ways through was the investment in lease financing, which will also offer certain tax shield to the company, M/s. Tata Finance Ltd., with whom the company had some earlier dealings in the fields of bills discounting etc. and a reputed organization in the field of financing, suggested the proposal of Prakash Industries Ltd. for a sale and lease back transaction of Rolling Mill Rolls for Rs. 100 lakhs, the said rolls carry 100 per cent depreciation under the I.T. Rules, the proposal envisaged a sale and lease back of the Rolls from Prakash Industries for Rs. 100 lakhs for a period of 5 years. Praj was to get Rs. 134 lakhs as lease rentals in the period of 5 years. After considering the tax advantages, the average annual return worked out to be about 16.50 per cent after tax. The Board considered the proposal in its meeting dated 28-2-1994, and approved the same. Prakash Industries Ltd. already had purchased Heavy Structural Rolling Mill Equipment with accessories from M/s. TISCO, Jamshedpur. The assessee had obtained a copy of invoice by TISCO to Prakash along with relevant transportation vouchers, a copy of which is already placed on record with the Assessing Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company etc. were involved in the transaction. The assessee has also obtained original transportation challans from Prakash Industries for purchase of Heavy Structural Rolling Mill Equipment with accessories from M/s. TISCO, Jamshedpur. The value for 65 rolls was stated to be Rs. 100 lakhs by Prakash Industries which was got valued by the assessee through an independent Chartered Engineer (annexure '9') and only then proceeded in the matter. The assessee purchased the rolls from Prakash Industries vide their invoice No. PIL/SID/P&M/93-94, dated 23-1-1994 for Rs. 100 lakhs (annexure '4'). The assessee also settled the amount of Rs. 100 lakhs with Prakash Industries through cheques/DD) (annexure '5'). The physical delivery to Pune and back to Champa in M.P. was not found practically feasible in view of the huge weight of the assets (about 400 tons) and high transportation costs. However, a confirmatory letter from Prakash Industries that they have sold the assets and taken back the same from Praj on lease is already on record of the department (annexures '6' and '6A'). Moreover, the assets were insured with The New India Assurance Co. Ltd. with specific mention of assessee's name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or inference on a given set of facts, it is incumbent upon the appellant to clearly state the facts in the return of income or in the statements accompanying the return of income or even during the assessment proceedings while making a claim of depreciation. It is not the case of the appellant that even where the appellant is leasing finance and not plant and machinery, the appellant is still entitled to 100 per cent depreciation. In other words, while claiming 100 per cent depreciation on the value of plant and machinery, the appellant has to clearly state the facts and then only draw inference as it chooses. In the instant case, the appellant has only made a claim of 100 per cent depreciation without stating the facts. 10. As far as necessity of identifying the rolls actually purchased by the appellant is concerned, the Assessing Officer has addressed this issue from three different angles viz.:- (i) the purchases of the appellant were effected only on paper, (ii) the quantity purchased by the appellant was not identified, (iii) the appellant could not prove the use of the actual assets claimed to have been purchased. It would be understood clearly from the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation. The appellant instead contested its stand that its claim was correct in the re-assessment and, on its disallowance, the appellant filed an appeal before the C.I.T. (Appeals). The appellant has chosen to withdraw such appeal and filed a revision petition instead before the C.I.T. such revision petition has been dismissed on merit and, therefore, it has now become final that the appellant's claim of depreciation was incorrect ab initio. 13. From the foregoing facts, it is clear that the appellant has wilfully made wrong ab initio which could not factually be substantiated and it is found logically, not tenable. The appellant also produced during the re-assessment proceedings for the first time and the certificates so as to prove that the rolling rolls were actually identified by the appellant before its purchase. Its bluff has been exposed during the re-assessment proceedings when the Chartered Accountant certifying the physical identification of such rolls admitted before the Assessing Officer that these rolls were not capable o[ being identified. Further, the appellant claimed in the proceedings that it is obvious that the rolls have been used and their total life was for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed. Appeal is dismissed". 8. Still aggrieved, the assessee is in appeal before us. 9. The ld. authorised representative for the assessee, in the course of his arguments, has invited our attention to the various documents and papers placed in the paper book containing 144 pages. He has reiterated the contentions and submissions that were made before the CIT(A), and in connection thereto, he invited our attention to the various submissions and contentions that were incorporated in the written submissions filed before the CIT(A). This written submission filed by the assessee before the CIT(A) is placed at pages 11 to 17 of the paper book. The contentions and submissions that were made by the assessee in his written submissions filed before the CIT(A) were emphatically emphasized and highlighted by the ld. counsel for the assessee at the time of hearing of this appeal. All those facts and contentions highlighted by the ld. counsel for the assessee in the written submissions along with the various documents in support thereof have been taken note of very carefully by us. The assessee's written submission made before the CIT(A) has already been quoted hereinabove, and as such, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Bharose [1987] 165 ITR 14 (SC), (3) CIT v. K.R. Sadayappan [1990] 185 ITR 49 (SC), (4) Addl. CIT v. Jeevan Lal Sah [1994] 205 ITR 244 (SC), (5) K.P. Madhusudanan v. CIT [2001] 251 ITR 99 (SC) and (6) Raghuvir Soni v. Asstt. CIT [2002] 258 ITR 239 (Raj.), has concluded and summarized the scope and effect of section 271(1)(c) read with Explanation 1 thereto as under: "3.20 On careful reading of the aforesaid provisions of section 271(1)(c) read with Explanation 1 thereto and in the light of judicial precedents discussed above, the law on the subject of penalty imposable under section 271(1)(c) read with Explanation thereto can be spelt out in the prepositions as under:- (i) Wherever there is a difference between the returned and assessed income, there is an inference of concealment, as a rule of law as would be clear from Explanation 1 to section 271 (1)(c) of the Act. However, the Explanation 1 to section 271 (1)(c) raises only a presumption that can be rebutted by the assessee with reference to the facts of the case. (ii) The responsibility for rebutting such inference of concealment drawn under Explanation 1 to section 271 (1)(c) is squarely on the assessee. (iii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee offers an explanation, which is not found to be false, he can save himself from penalty even if he were not able to substantiate his case as long as the explanation of the assessee is bona fide and as long as he places all the relevant facts material to the computation of his total income irrespective of the fact that the same explanation was not accepted for the purpose of assessment." 13. Having noticed above the scope and effect of the provisions of section 271 (1)(c) read with Explanation 1 thereto, we shall now revert to the facts of the present case to ascertain as to whether the assessee's explanation in support of the claim of depreciation on alleged forging rolls is found to be false by the Assessing Officer, and whether the assessee's explanation was bona fide and the assessee had disclosed all material facts and information relating to the claim of depreciation on forging rolls. 14. In this case, the original assessment for the assessment year 1994-95 under consideration was initially completed under section 143(3) on 24-9-1997, where the claim of depreciation to the extent of 50 per cent on forging rolls was allowed, inasmuch as it was claimed that the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions contained in section 271(1)(c) read with Explanation 1 thereto. However, this presumption of concealment drawn from the language of section 271 (1)(c) read with Explanation 1 thereto can be rebutted by the assessee with reference to the facts of each case. It is also well-settled that the responsibility for rebutting such inference of concealment drawn under section 271 (1)(c) read with Explanation 1 thereto is squarely on the assessee. Thus, in the present case, the assessee is required to offer an explanation with regard to its claim of depreciation on the alleged forging rolls. The explanation offered by the assessee should not be found to be false for the purpose of not levying the penalty. In other words, the explanation of the assessee if found to be false, that would attract penalty as envisaged in clause (A) of Explanation 1 to section 271 (1)(c) of the Act. It is also clear that merely because the assessee has not been able to substantiate his explanation, penalty would not automatically be attracted, if the explanation so offered by the assessee is not found to be false but is bona fide, and all the facts relating and material to the computation of the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; paper book 1. Invoice dated 23-1-1994 of Prakash Industries in favour of the assessee. 26 2. Payment of the sale consideration made by the assessee to Prakash Industries. 27-28 3. Confirmatory letter from Prakash Industries dated 28-4-1998. 29-30 4. Letter from M/s. Prakash Industries dated 17-2-1994. 31 5. Insurance Policy. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rakash Industries Ltd. were existed at the business premises of M/s. Prakash Industries Ltd., and the assessee has not given any conclusive evidence to show that the assessee had actually purchased any forging roll. The department's further contention is that the assessee has not been able to identify those 65 rolls claimed to have been purchased from M/s. Prakash Industries Ltd., at the factory premises of M/s. Prakash Industries Ltd. In support of the department's case, the department has laid emphasis on the following facts: (i) The purchase bill of the assessee does not identify which forging rolls were purchased by the assessee from M/s. Prakash Industries Ltd. (ii) The assessee's claim that its Chartered Accountant Shri S.R. Salvekar had actually identified the assets on 23-1-1998 is not correct, in the light of the fact that during the course of assessment proceedings for the assessment year 1995-96 Shri S.R. Salvekar has specifically stated before the Assessing Officer that his employee Mr. Prashant Deshmukh could not identify the rolls. (iii) In the light of the enquiry conducted by the DDIT (Inv.), Jabalpur, forging rolls alleged to have been installed at M/s. Prakash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that "heavy structural mills equipment with its available accessories" were delivered by M/s. TISCO to M/s. Prakash Industries Ltd. by road, in support of which the assessee has relied on aforesaid transport consignments dated 28-7-1992. It is further pertinent to note that from the details of delivery challans relating to the purchase of Heavy Structural Equipments supplied by M/s. TISCO to M/s. Prakash Industries Ltd., filed before the Additional Director of Income-tax, Range 1, Raipur, M.P., it was revealed that all these Heavy Structural Mill equipments with its available accessories were delivered by M/s. TISCO up to the month of September, 1992 itself. At the same time, the assessee has also relied upon a confirmatory letter dated 28-4-1998 given by M/s. Prakash Industries Ltd., which is placed at pages 29 and 30 of the paper book. In this confirmatory letter given by M/s. Prakash Industries Ltd., they have confirmed that heavy structural rolling mill Rolls, 65 Nos. sold by them to M/s. Praj Industries Ltd., were purchased by them from M/s. TISCO vide invoice dated 31-3-1993 with reference to the purchase order dated 16-7-1991 and they were transported by M/s. TISCO through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this letter that the Steel Structural Rolling Mills Rolls, in respect of which the proposal for lease finance of Rs. 1,00,36,149 was made with M/s. Praj Industries Ltd., were procured by M/s. Prakash Industries Ltd. in the month of May, 1993, though, on the other hand, in their letter dated 28-4-1998 they have stated that heavy structural mill equipment with its available accessories purchased from M/s. TISCO vide invoice dated 31-3-1993 were transported by TISCO through Dharam Roadways by road, the transport consignments of Dharam Roadways filed by the assessee are all of dated 28-7-1992 meaning thereby that the alleged heavy structural equipments with its available accessories claimed to have been purchased by M/s. Prakash Industries Ltd. from M/s. TISCO were transported to the assessee's site vide transport consignments dated 28-7-1992 of Dharam Roadways. This gives a total conflicting stand as to the procuring of the steel structural rolling mill rolls by M/s. Prakash Industries Ltd. Further, the invoice of M/s. TISCO raising the bill of Rs. 2 crore does not give any details as to how the sum of Rs. 2 crore has been quantified with reference to each and every item alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCO, we fail to understand as to this stand of the assessee that 50 per cent of Rs. 2 crore being the sale consideration of heavy Structural Mill Equipment with its available accessories allegedly purchased by M/s. Prakash Industries Ltd. from M/s. TISCO was financed by the assessee by way of sale and lease back transaction. The alleged sale and lease back transaction has been claimed to be entered into on 2-2-1994 only and the question of financing towards the sale consideration of Heavy Structural Mill Equipment with its available accessories, which were already purchased by M/s. Prakash Industries Ltd. from M/s. TISCO vide invoice dated 31-3-1993 and delivery of which were already obtained in or about July, 1992 could not arise at all. In this regard, we may, therefore, say that the assessee has not come forward with clean hands to claim the depreciation on the alleged forging rolls. Therefore, it is not clear as to whether the heavy structural mill equipment with its available accessories had actually included the heavy structural rolling mills rolls alleged to have been sold by M/s. Prakash Industries Ltd. to the present assessee, and whether, they were actually available at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng M/s. Praj Industries Ltd., 1216/6, Furgusson College Road, Post Box No. 831, Pune-411 004 have no charge of bank and, or any financial institution. For R.D. Garg & Associates Chartered Accountants Sd/- Place: Delhi Proprietor Dated: 17-2-1994." On perusal of the aforesaid certificate, it is seen that M/s. R.D. Garg & Associates, CA has given a certificate to the effect that the Heavy Structural Rolling Mill Rolls detailed in invoice No. PIL/SID/P&M/93-94, dated 24-8-1993 of M/s. Prakash Industries Ltd. for Rs. 1,00,36,149 favouring M/s. Praj Industries Ltd., have no charge of bank and/or any financial institution. The CA has given this certificate with reference to invoice dated 24-8-1993 for Rs. 1,00,36,149 of M/s. Prakash Industries Ltd. favouring the present assessee. It is not the assessee's case that they purchased any rolls from M/s. Prakash Industries Ltd. vide invoice dated 24-8-1993 for Rs. 1,00,36,149 and had entered into the sale and lease back transaction in respect of the assets purchased vide invoice dated 24-8-1993. The assessee's case is only with reference to invoice dated 23-1-1994 for Rs. one crore only and not with reference to invoice dated 24-8-1993 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee's C.A. Mr. S.R. Salvekar. From this certificate, it is clear that the physical verification was not claimed to be conducted by Mr. Salvekar himself, but by his representative Shri Prashant Deshpande. During the course of the assessment proceedings for the assessment year 1995-96, when this lease transaction entered into between the assessee and M/s. Prakash Industries Ltd. was first examined and investigated by the Assessing Officer, Shri S.R. Salvekar, C.A. had categorically stated that his employee Shri Prashant Deshpande could not identify the assets. In the statement made before the Assessing Officer, the assessee's C.A. Shri S.R. Salvekar had confirmed that it was not possible to identify the very rolls the assessee had purchased and which were actually utilized for the purpose of business in the mill of M/s. Prakash Industries Ltd. From this, it is thus clear that the certificate given by the Chartered Accountant Shri Salvekar was not a true and correct one as the C.A. himself had admitted before the Assessing Officer in the course of the statement that his employee could not identify the very rolls the assessee had purchased and given them back on lease to M/s. Prakash In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vail the services any more of the said C.A. that would not by itself be sufficient to prove that whatever stated by the C.A. before the Assessing Officer was false and not correct one. The assessee has not produced any iota of evidence to say that whatever stated by the C.A. in his statement before the Assessing Officer as to the fact of identification of the alleged rolls was not true state of affairs and what was stated by him in his certificate was only correct and true one. In this connection, it is submitted by the assessee that the statement of the C.A. stating that the assets could not be identified had remained unchallenged because of availing K.V.S.S benefit in the assessment year 1995-96 and because the assessee went in for relief under section 264 in the assessment year 1994-95. But the well-settled position of law is that the assessment proceedings and penalty proceedings are independent and separate one, and thus, the assessee could have at least produced in the penalty proceedings some evidences or materials to rebut the aforesaid statement of its C.A. made before the Assessing Officer. No such evidences or materials have been brought to light in these penalty proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent, sufficient and adequate documents or materials, is in itself not sufficient to say that merely because the transactions were entered into after the same was referred to by Tata Finance Ltd., is a transaction of sale and lease back transaction and not of a mere financial transactions. M/s. Tata Finance Ltd. has not given any certificate or confirmatory letter nor any physical verification was made by M/s. Tata Finance Ltd. that the rolling mill rolls were actually in existence at the factory premises of M/s. Prakash Industries Ltd. and were distinctly identifiable. Merely because finance given by the assessee to M/s. Prakash Industries Ltd. were liaisoned by Tata Finance is by itself not sufficient to say that the transaction in question was of a sale and lease back transaction. This contention of the assessee, therefore, does' not support the assessee's case in any manner, inasmuch as, in the present case, it is otherwise found that the transaction entered into by the assessee has not been proved and established to be a genuine transaction of sale and lease back transaction, in the light of the various documents, papers and the evidences referred to by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations and to carryon any other business (except banking and the issuing of policies of assurance on human life) which may seem to be capable of being conveniently carried on in connection with any of these objects or calculated directly or indirectly, to enhance the value of, or facilitate the realisation of, or render profitable, any of the Company's property or rights, and also as given in sub-clause (25) of Clause III(c) of the Memorandum of Association; namely to carryon and undertake the business of leasing and to finance lease operations of all kinds." The second resolution dated 28-1-1994 reads as under:- "The Chairman placed before the Board the proposal of sale and lease back received from Tata Finance Limited for Rs. 10,000,000. The proposal envisages the purchasing of Steel Rolling Mill's Rolls from Prakash Industries Limited, New Delhi (a 100 per cent depreciable asset under Income-tax Act, 1961) and the same will be in turn leased out to Prakash Industries Limited. The Balance Sheet of the aforesaid Company was placed before the Board together with proposal papers received from Tata Finance Limited. After thorough discussion the Board felt that though the idea of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was accepted in original assessment for relevant assessment year, it does not preclude the Assessing Officer to reopen the assessment of that year on the basis of his findings of fact made on the basis of fresh materials in the course of assessment of the next assessment year. In the present case before us, the assessee's claim of depreciation on forging rolls were not found to be correct on the basis of fresh materials brought on record in the course of assessment of assessment year 1995-96, and thus, the acceptance of assessee's claim in original assessment of assessment year 1994-95, without considering the facts and materials which were unearthed and revealed later during the assessment proceedings for the assessment year 1995-96 is not sufficient in itself to treat the assessee's claim as bona fide and genuine one. We further observe that where the transaction itself, on the basis of subsequent information, is found to be a bogus transaction, mere disclosure of that transaction at the time of original assessment proceedings cannot be said to be a disclosure of the full facts in the case. The present case is not a case of change of opinions. It is not a case whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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