TMI Blog2006 (11) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... ital expenditure treated by the AO. 3. Regarding the purchase of 32 steel rollers from M/s S.P. Engineering Works (SPEW), Bakura Howrah, the briefly stated facts are that the assessee purchased these rollers for a sum of ₹ 25,62,000. These rollers were leased out to M/s Usha Rectifiers Corpn. (India) Ltd., Gauriganj (Usha Rectifiers) Sultanpur, UP. During the course of assessment proceedings the AO inquired into the genuineness of the purchases of rollers. The AO summarized the results of his inquiry that Mrs. Sarmishta Ganguli, proprietor of M/s SPEW is a housewife. M/s SPEW do not have a sales-tax number/Central Sales-tax number. The suppliers of the rollers to M/s SPEW also do not have ST/CST numbers. Inquiries were also made fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that Mani Management Consultant (P) Ltd., 306, Churchgate Chambers, Bombay, vide their letter dt. 28th July, 1988 to the assessee company introduced themselves and offered that it should be possible for us to submit lease proposals to you on a regular basis from well reputed public limited companies. The assets acquired under lease are plant and machinery eligible for normal depreciation and even depreciation @ 100 per cent in the very first year of installation. The lease period is normally for five years. At present, we shall be in a position to offer you lease proposals for the acquisition of plant and machinery eligible for 100 per cent depreciation in the very first year from M/s Tata Chemicals Ltd. as well as Mangalam Cement L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of rollers at the premises of Usha Rectifiers and other details were available to the AO. Attention of the CIT(A) was also drawn on the letter dt. 24th March, 1992 filed before the AO. After considering the details and remand report, the CIT(A) found that there was no justification in not allowing the claim of the assessee. The CIT(A) has discussed the issue in detail and then found that the purchases made by the assessee were genuine and, therefore, depreciation claimed on account of leased out the assets to Usha Rectifiers is allowable. Accordingly, he allowed the claim of the assessee. 3.1 The learned Departmental Representative, who appeared before the Tribunal, firstly, placed reliance on the order of the CIT(A). It was further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctifiers from whom the rollers were purchased and were leased out, respectively. It was further submitted that all the details in regard to purchase and leased out of assets were filed before the AO as well as before the CIT(A). The purchaser from whom the material is purchased is assessed to tax regularly and the payments Were made through broker, It was further submitted that on a later stage these assets have been sold and they have been disclosed in the books of account. Attention of the Bench was drawn on p. 54 of the paper book where copy of sale bill is placed. It was further submitted that the assets were identified and the delivered to Usha Rectifiers. Copy of the delivery certificate, is also placed on record. 4. After consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought on record on behalf of the Department. Without bringing any positive evidence claim of the assessee cannot be disallowed. We further noted that no enquiry was made by the AO either from M/s SPEW or Usha Rectifiers who have used the assets and they paid the monthly leased rent regularly. No prudent businessman will enter into an agreement on monthly rent. If the transactions are of colourable device then the lease rent always is paid in advance or after claiming the deduction, In the present case, the monthly rent is paid even after two years, which shows that the leased assets were genuine. In view of the above facts and the circumstances of the case, and in view of the reasoning given by the CIT(A), we confirm his order in, this r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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