TMI Blog2015 (7) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaining to assessment year 1996-97. 2. The sole grievance of the assessee reads as under: On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the LAO by mainly referring to instances before the set aside order by the Hon ble ITAT and without providing cross examination of Mr. D. Shiramalu and Mr. D.K. Sanghvi as directed by the Hon ble Mumbai appellate Tribunal in the order passed on 7.3.2006. The appellate order passed by the Ld. CIT(A) being bad in law, the same needs to be quashed and the claim of depreciation of the appellant needs to be allowed. 3. The roots of this appeal lie in the assessment order made u/s. 143(3) of the Act dt. 26.3.1999. While scrutinizing the return of income, the Assessing Officer found that the assessee has leased asset to Madras Oxygen Accetelyene Ltd., Protech Circuit Breakers Ltd. In the case of Madras Oxygen Accetelyene Ltd., the assessee has leased 1700 Nos of High Pressure Seamless Gas cylinder having water capacity as 49 litres amounting to ₹ 91.80 lakhs on which the assessee claimed 100% depreciation. On the basis of the enquires conducted by the Office of the JDIT (Inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in support of the insurance taken, in support of the installation and the Chartered Accountant's Certificate should blindly be accepted by the revenue authorities. After all, the burden of proof is still upon the assessee to show that it had purchased the assets and such assets were leased out to the lessees from whom it claimed to have collected lease rental In a situation of this nature, it is always supported by certain basic documentary evidence If the revenue were only to look into those documents and decide the issue, perhaps the commercial realities of the transactions will have to be ignored. The revenue has unearthed several cases wherein the socalled lease transactions have come for a close scrutiny and found that they were all bogus transactions or merely finance transactions. It has been done admittedly to claim hundred per cent depreciation on the eligible assets The provisions of relief have been seen to have resulted in miscarriage. But we are unable to say that the facts of this case are one such nature without the assessee being given full opportunity of crossexamination of the director of PSGL who has .stated that / the entire transactions are bogus and me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eakers Ltd., , Adi Dhabase Taluka, Padra Baroda. Asstt. DIT (Inv)-I, Baroda The Addl.CIT, Coimbatore had served the summons on one Mr.P.Sriramalu on 12.07.2010. In response to the said summons, Shri P.Sriramulu, vide his letter dated 17.07.2010 has stated as under (copy enclosed): 1. As mentioned in your letter I am not a Director in Madan Oxygen Acetylene Co. Ltd., I was only an employee of the company. . 2. The company was closed from May 2000 onwards and all the employees had to leave and settle down elsewhere. 3. I also left company 4. During the search and seizure during 1995-96 Asst. year al/ the records for the year and previous year were taken by the Department and either me or the company do not have any records. 5. During the search and seizure and subsequent Block Assessment Proceedings, the Dept. has taken statements from concerned persons and on the basis the Assessment was completed as Block Assessment. 6. Moreover I am now 65 years old and a diabetic and BP patient. I can not take traveling since I gel frequent giddiness. 7. I humbly request your good selves to take the statements given to the Investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction with the above referred parties is actual and withdraw the disallowance made in the income tax order and also drop the demand accordingly. The CIT(A) may, therefore, decide the issue on merits. 6. The Ld. CIT(A) gave copy of the remand report to the assessee. The assessee filed a detailed reply to the remand report. The reply of the assessee has been incorporated by the Ld. CIT(A) at para-4 of his order. After considering the remand report of the AO and the submissions made by the assessee, the Ld. CIT(A) finally concluded as under: a) All out efforts were made to allow cross examination but the directors the company never came of forward to conduct cross examination of Shri Sriramulu, finance Manager of M/s. Madras oxygen Acetylene Limited, Coimbatore and Shri D.V.Sanghvi, Director of M/s. Protech Circuitbreakers ltd., (b) The evidences collected by the Income Tax Department were made available to the appellant at various stages and adequate opportunity was given to rebut the claim in course of assessment proceedings and subsequent appeal proceedings and principles of natural justice have been fully adhered as analyzed in the article of Shri H P Ranina, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have given a thoughtful consideration to the orders of the authorities below. We have also carefully considered the decisions relied upon by the Ld. Counsel. We have also gone through the orders made at the time of first round of litigation. 10.1. The undisputed fact is that the assessment order made u/s. 143(3) of the Act dt. 31.3.1996 and subsequent First Appellate Authority order dt. 12.3.2004 has been merged with the order of the Tribunal dt. 7.3.2006. Therefore, the issue before us is to decide whether the Ld. CIT(A) has followed the directions of the Tribunal in letter and spirit and whether the additions can be sustained. As mentioned elsewhere, the decision of the Tribunal in the first round of litigation was pronounced on 7.3.2006. The Ld. CIT(A) issued letter to the AO to give opportunity to the assessee for cross examination on 25.6.2010. We failed to understand why the Ld. CIT(A) took more than 4 years to direct the AO to do the needful. Although the Ld. CIT(A) took more than 4 years, the AO in less than 2 months i.e. on 18.8.2010 submitted the report. We once again failed to understand why the AO was in such a hurry when the Ld. CIT(A) took so many years. 10.2. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertifying that assets are installed (25 Nos) 8. Copy of letter dated 30.09.95 from PCBL certifying that assets are installed (5 Nos) 9. Copy of letter dated 30.09.95 from PCBL confirming receipt of assets (25 Nos.) 10. Copy of letter dated 30.09.95 from PCBL confirming receipt of assets 25 Nos.) 11. Copy of Certificate from Chartered Accountant, V.M Bhasker dated 30.09.95 for eligibility of depreciation on assets (25 Nos.) 12. Copy of Certificate from Chartered Accountant, V.M Bhasker dated 30.09.95 for eligibility of depreciation on assets (25 Nos.) 13. Copy of letter dated 08.10.95 from PCBL to United Insurance to amend policy 14. Copy of United Insurance Policy dated 18.09.95 15. Copy of letter dated 15.03.96 from PCBL confirming that assets are working satisfactorily 16. Copy of certificate from Chartered Engineer dated 29.03.96 valuing asst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.09.95 of SPEC 7. Copy of Invoice No.3569 dated 21.09.95 of SPEC 8. Copy of Criminal complaint against MOAL dated 01.10.99 10.5. At this juncture, it would not be out of place to consider the following observations made by the Hon ble Karnataka High Court in the case of Karnataka Wakf Board Vs State of Karnataka AIR 1996 Kar. 55 at pages 63 64. Where the party had an opportunity of adducing evidence in the case but with open eyes failed to adduce that evidence, the case should not be remanded to give a second chance to the party to adduce that evidence. The policy of the law is that once that matter has been fairly tried between the parties, it should not, except in special circumstances, be reopened and retired. In a recent decision their Lordships of the Supreme Court laid down that power to order retrial after remand, where there has already been a trial on evidence before the court of first instance, cannot be exercised merely because the Appellate Court is of the view that the parties who could lead better evidence in the Court of first instance have failed to do so. ..... 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