TMI Blog2003 (3) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... w, the same are being decided by this common judgment. These appeals are directed against the judgment and order of the Income tax Appellate Tribunal, Jaipur Bench, Jaipur (for short "the Tribunal"), dated November 27, 2000. The appeals were admitted in terms of the following questions: "1. Whether the Appellate Tribunal was justified in upholding the view of the learned Commissioner of Income-tax (Appeals) and the Assessing Officer that additions could be made on estimation or presumption and by rejecting the documentary evidences produced by the assessee in contradiction of the judgment of the apex court in CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349? 2. Whether the Income-tax Appellate Tribunal was justified it bifurcating the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement handling works. The appellant-firm has entered into a lease agreement with Key Leasing and Finance Ltd., for taking on lease 15 trucks on April 25, 1990. The relevant assessment years are 1991-92, 1992-93 and 1993-94. In 1991-92 in the income-tax return the assessee declared loss of Rs. 1,33,687, for the assessment year 1992-93 the assessee has shown income of Rs. 1,05,177 and in the third assessment year, i.e., 1993-94, the assessee has shown income of Rs. 7,199. The Income-tax Officer noticed that the assessee had claimed lease rent as revenue expenditure. Considering the contents of the agreement with Key Leasing and Finance Ltd., the Income-tax Officer was of the view that the trucks were not taken on lease but it was a sale. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the assessee to allow the lease amount paid as revenue expenditure. On the other hand, Ms. Parinitoo Jain, learned counsel appearing for the Department, submits that when under the agreement there is a clause that after completion of lease period, if one per cent. of the total consideration of the trucks is paid, the lessee will be the owner of those trucks. Whether the assessee is the owner of the trucks or the trucks were taken on lease for three years, that has to be considered in the facts and circumstances of the case, i.e., taking into account the terms and conditions of the agreement and also the contents of the letter which reveal the intention of the assessee. The Assessing Officer after considering the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able, will lessee attempt to capitalise leased assets on lessee's balance-sheet. As per clause 8 it has been agreed that the ownership of the said assets during the tenure of lease and inclusive of any renewal options that the lessor may concur indisputably rests with the lessor. So in clear terms, the agreement provides that during the lease period, only the lessor shall be treated as the owner of the trucks and not the lessee. Clause 11 of the agreement further provides that the lessee when it is not the owner of the machinery has no right and shall not sell, hypothecate, mortgage, pledge, assign, let or otherwise encumber or suffer a lien upon and/or deal with or part with possession of the said machinery, i.e., the trucks, without the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after the expiry of the lease period, the trucks will be transferred in favour of the assessee. For that also, he has referred the fact which has been mentioned in Schedule A enclosed to the agreement. It is true that there was a clause that the assessee had an option to purchase the trucks on payment of one per cent. of the lease money on termination of the lease period and the lessee can become the owner of the truck but we are concerned with the lease period and terms of the lease. As we have referred above, in the terms and conditions of the agreement, when Key Leasing and Finance Ltd., both the parties agreed that during the lease period, the lessor, Key Leasing and Finance Ltd., shall be the owner of the trucks and the lessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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