TMI Blog2015 (6) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the Assessing Officer had proceeded on the basis of a presumption that the cost of each windmill is inflated by ₹ 1 crore and it had not been proved by documentary evidence that such money came back to the assessee from the concern to whom commission was paid, namely M/s. Suhani Traders. The Assessing Officer has not disputed the fact that the assessee paid lease rent of ₹ 5,51,788/- to Weizmann group Ltd. on account of the windmills taken on lease and the contention of the Assessing Officer that lease rents were unreasonable was not based on any cogent material but only based on assumption and presumption. In fact, the lease rents were fixed in accordance with the formula provided by Indian Renewable Energy Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se rentals on the basis of inflated cost of windmills ? 2. These three identical questions pertain to assessment years 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07. In Income Tax Appeal No.1515/13 and 1713/13, these three questions are common. There is however, an additional question which is common in appeal Nos. ITXA Nos.1713/13 1511/13 which is reproduced below: D. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the payments made for sharing of utilities do not attract section 194C of the Income Tax Act and, therefore, disallowance made by the Assessing Officer under section 40(a)(ia) is to be deleted ? 3. It will be necessary to advert to a few facts before dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complicity in the transactions with NEG Micon was gathered. It was also noticed that the assessment order did not indicate that the assessee had paid a higher price for the purchase of windmills. Apropos, the lease rentals, the Commissioner of Income Tax (Appeals) deleted the disallowance. All payments were made by crossed account payee cheques and it was fully accounted for in the books of account. The Commissioner of Income Tax (Appeals) further held that since there was nothing on record to prove that there was excessive payment on account of lease rent, there was no question of adopting a different figure for the purchase price in respect of leased windmills. 6. Being aggrieved by the order, the Revenue filed an appeal before the ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Mr. Mistri, the contention of the revenue is that subsequent transactions have been put into place all of which enure to benefit of the Weizmann group is incorrect. It is the revenue's contention that the commission involved in the deal has been indirectly handed back to the Weizmann group. According to Mr. Mistri, these contentions are misconceived. He supported the order of the Commissioner of Income Tax (Appeals) as well as the ITAT and contended that no question of law would arise in these appeals. 9. On the additional question in ITXA Nos.1511/13 and 1713/013, Mr. Mistri submitted that no substantial question arises in the facts of the case and that disallowance made by the Assessing Officer was under section 40A(2)(b) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent as well as Precot Mills Ltd. claiming difference in prices of windmills pegged at about ₹ 98 lacs. However, comparison with companies like Rajasthan State Power Corporation Ltd. reveals that the price is easily justifiable given the difference in specifications. It is necessary to mention that in the course of the comparison provided between the price paid by Weizmann and Savita Chemicals Ltd. and the assessee, it revealed that Savita Chemicals purchased similar windmills at price of ₹ 405.00 lacs as against ₹ 360.64 lacs in the case of the assessee. The performance, specifications and type of requirements were very similar in these cases. 13. Accordingly, the Tribunal considered the statement of comparab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricity Project. 15. The Tribunal found that the Commissioner of Income Tax (Appeals) was justified in holding that there is nothing on record to prove the excessive amount of lease rent was paid. The said issue is identical in all appeals and the appeals came to be rejected while upholding the orders of the Commissioner of Income Tax (Appeals). The appeals filed for the year 2002-03 and 2005-06 were also dismissed. The cross objections filed by the assessee for the year 2002-03 were also rejected. 16. In the circumstances, having considered the finding of the two fact finding authorities, namely the Commissioner of Income Tax (Appeals) and the Tribunal, both of whom have come to an identical findings, we find no reason to interfere in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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