TMI Blog2012 (9) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... tenable in law - in favour of assessee. Disallowance of claim of depreciation - sale and a lease back transaction - IATA allowed it - Held that:- As the assessee has submitted the necessary evidence for the purchase and use of the machineries during the year the lease transactions were genuine and that the Department failed to adduce any evidence to prove that the transaction was not genuine or was a sham no disallowance can be warranted - the contention of Revenue that the Tribunal blindly followed the decision in Unimed Technologies Ltd. Versus Deputy Commissioner Of Income-Tax [1999 (4) TMI 104 - ITAT AHMEDABAD-A] in spite of the facts being different, would not be tenable - in favour of assessee. - Tax Appeal No.2317 of 2009 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation claimed in both the years. After VDIS declaration, the assessee offered to tax only the interest component and not the lease rentals. The assessee's claim was that by making VDIS disclosure, the assessee had converted the amount invested in Plant and Machinery into loans. The assessee prayed that considering the disclosure under VDIS Scheme, the amount which had become irrecoverable be allowed as a bad debt. 3. The Assessing Officer disallowed the claim of the assessee on the following grounds:- (a) The assessee has not given any loan to the parties concerned, but had only leased the machinery to them; (b) The assessee company failed to prove that any loan was given to the parties by account payee cheque or crossed DD; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is justified in law in holding that to allow the claim of bad debts u/s.36(1)(vii) of the Act only on the ground that the amount had been written off in the books of accounts of the assessee without fulfilling the obligation to prove that the debt had become bad as is the requirement of Section 36(1)(vii)?" (B) "Whether on the facts and in the circumstances of the case the Appellate Tribunal is justified in law in holding that the claim of depreciation is allowable following the case of M/s. Unimed Technologies Ltd. though in that case material facts were different, that is the seller and lessee were Electricity Board, Public Sector unit and other party to the transactions that the lessor was finalized after following the public notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's declaration under VDIS. The Tribunal also recorded a finding that the certificate accepting the VDIS declaration was issued by the Commissioner after consultation with the Central Board of Direct Taxes and, therefore, the contention on behalf of the Revenue that assessee is not entitled to rely on VDIS declaration would not be tenable in law. The Tribunal found that the condition of the debt having been bad on account of dishonour of cheques from the concerned parties proved that the debt, as a matter of fact, had become bad. We do not find any infirmity in the order of the Tribunal so far as this issue is concerned. We rely on the following observations made by the apex Court in the case of TRF Limited Vs. Commissioner of Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e equipments were not dismantled for delivery to the assessee. The same continued to be used by Kalyani Seamless Tubes and the assets were shown as leased to Kalyani Seamless Tubes by the assessee. According to the Revenue, this was a sale and a lease back transaction. The Assessing Officer disallowed the claim of depreciation at the rate of 100% on the following grounds:- (a) The assessee never became the owner of these assets as these were not installed in its premises. (b) The machinery and equipment purchased by the assesee was in the nature of immovable property and the assessee has not purchased the property through a registered purchase/sale deed. (c) Since on these assets, depreciation at the rate of 100% was already allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions entered into by the assessee are not the sham transactions. The assesee has submitted the necessary evidence for the purchase and use of the machineries during the year. The list of the evidences produced by the assessee supporting the transactions entered into are enumerated at page 13 of the order. Even the lessor of the assets is entitled for the deduction of the depreciation in view of the decision of the Hon'ble Supreme Court in the case of CIT v. Shaan Finance (P) Ltd. (1998) 231 ITR 308 (SC). The objection raised by the AO has been exhaustively dealt with by the CIT(A) as has been reproduced in the preceding paragraphs from the order of the CIT(A). The CIT(A) has given factual findings on each of the issues raised by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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