9911796707
TMI Blog2012 (6) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. 3. In the present case, the Commissioner of Income-tax (Appeals) and the Tribunal have held that the assessee was a victim and duped by third parties, namely, M/s. Modern Engineering and Fabricators and M/s. Sears Leasing Industries Limited. The Commissioner of Income-tax (Appeals) has also referred to an FIR which was registered at the instance of the respondent-assessee and the directors/officers of M/s. Sears Leasing Indus- tries Limited were arrested. These are findings of facts. The Commissioner of Income-tax (Appeals) had held as under : "I have considered the facts and circumstances of this case. The facts mentioned by the Assessing Officer in his order are true but they tell only the half story. It is true that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law, it cannot be held that the assessee is entitled for depreciation. Whenever a depreciation is granted whether to the owner and user or to a lessor on account of the passive user by the lessee, the stipulation of law permit the asset must be existed and must be used for the business must be met. The asset in question, gas cylinders did not either exist nor was it used in business by the lessor or the lessee. Therefore, the action of the Assessing Officer in grant- ing the depreciation is justified. The same is, therefore, upheld. 5. In order to appreciate and understand the real nature of contro- versy in this case, it is necessary to reiterate the facts of the case. The facts of the case are as under : 6. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in no way connected with the bogus transactions and fabrication of evidence in this regard. It is submitted that it has been cheated by an unscrupulous persons mainly one Sh. Y. P. Tara who was director, Sears Leasing Industries. The assessee has submitted that the assessee entered into a transaction of leasing. As is the market practice the entire document in respect of the lease were to be furnished by the brokers and the lessee. The documents in the form of purchase bills, excise gate pass transport receipts were sent to it by the broker and the leasing company. It has made the payment to the account of Modern Engg. Co. and it has received the payment of advance lease rent from its lessee, M/s. Sears Leasing Co. Later on it was found tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the claim of depreciations has rightly been disallowed. However, penalty in this regard can be sustained only when it is found that the assessee has not acted in a bona fide manner. The statement of the broker, Deepti Chopra and G. P. Aggarwal and brokers to the transactions corroborated the sub- mission of the assessee that they were the brokers to the transactions and it is they who supplied all the documents in respect of purchase transfer and lease to the assessee. This action is also in consonance with the market practice. The most vital point to decide whether the assessee has acted in the conspiracy or not should be answered from the examination of the facts as to who has enjoyed the financial benefits out of the deal or transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction. The assessee only made its claim of depreciation which was based on the documents supplied by the broker to the transaction and the lessee company. This conclusion has also been arrived at in the appellate order and it is for this reason that in the appellate order the addition of Rs. 13,70,000 made in the assessment year 1991-92 in respect of the money received by the assessee was deleted. At page 12 of the order it has been observed as under : 8. Examination of the bank account does bring to the conclusion that the amount in question have been utilized by some unscrupulous individuals for making unlawful gain by duping taxpayers eager to take the benefit of depreciation of lease and for this purpose they contrived a design to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability and this proposal enabled us to do so, we accepted the proposal and expressed readiness in finance the gas cylinders worth Rs. 7,06,860. Sears agreed to give us a deposit of Rs. 6 lakhs at the first instance saving us the future interest cost. We thus agreed to the financial lease with Sears Leasing even though involved a loss of Rs.1,06,860. We are deeply shocked to note from your office that apparently, the entire transaction is false and our firm has been com- pletely misled by the lessee, M/s Sears Leasing Ind. Ltd. Based on your investigations a legal notice is being issued to the lessee as to why criminal proceedings may not be initiated against them." 11. The findings recorded by the Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
