TMI Blog2018 (5) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions other than Nath Pulp & Paper Mills Ltd. To put an end to the litigation in this case as the matter is very old and relates to the A.Ys. 1996-97, we sustain the order of the CIT(A) partly as indicated above and the claim of the assessee is directed to be allowed as per the observations of the Ld.CIT(A) without any further verification by the Assessing Officer. - ITA.No. 4430/MUM/2016, CO.No. 48/MUM/2018 - - - Dated:- 23-4-2018 - Shri C. N. Prasad, Hon'ble Judicial Member And Shri Rajesh Kumar, Hon'ble Accountant Member Assessee by : Shri N. R. Agarwal Revenue by : Shri M. C. Omi Ningshen ORDER Per C. N. Prasad ( JM ) 1. This appeal and cross objection filed by the Revenue and assessee are against the order of the Ld. Commissioner of Income Tax (Appeals)- 2, Mumbai dated 01.03.2016 for the A.Y. 1996-97. 2. The Revenue in its appeal has raised the following grounds: - 1. Whether on facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the Assessing Officer to verify each claim of the assessee, therefore, to satisfy that the supplier and lessee should not be one and the same, as the Ld.C1T(A), u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase for the Assessment Year 1995-96 in ITA.No. 2151/Mum/2000 dated 09.01.2004 which is put on record. The Ld. Courses for the assessee further contended that the issue involved in the present appeal stands covered by the decision of the Special Bench in the case of Mid-East Portfolio Management Ltd. v. DCIT [87 ITD 537 (Mum.) (SB)]. The Ld. Counsel for the assessee contended that as the issue involved in the instant appeal is identical to the issue raised on the appeal relation to Assessment Year 1995-96 (supra) following the decision of Special Bench matter may be set aside to the file of the Assessing Officer as the preceding year. 3. After hearing both the parties we in the interest of justice restore the matter to the file of the Assessing Officer with the direction to decide the matter afresh keeping in view the decision of ITA.No., (SB) (supra) as well as decision of this Tribunal in ITA.No. 2151/Mum/2000 dated 09.01.2000 after giving fair and reasonable opportunity of being heard to the assessee. 6. However, the Assessing Officer without examining the issue in the light of the decision of the Special Bench repeated the disallowance in the set-aside assessment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e file of A O. for deciding the same afresh after examining all the relevant aspects of the matter in accordance with law. It is, needless to observe that the A O shall afford sufficient opportunity of being heard to the assessee and shall pass a well discussed and well-reasoned order. 7. The Assessing Officer completed the assessment on 21.10.2010 u/s.143(3) r.w.s. 254 of the Act treating all the lease transactions as financial transactions and the principle element of the transaction was excluded and only interest portion from such lease transactions was brought to tax, apart from sustaining the disallowance of depreciation once again on leased transaction. In other words, alternative contention of the assessee that, if the transactions are treated as financial transactions then only the interest element has to be brought to tax. 8. Regarding depreciation on leased transactions the Assessing Office has simply stated that assessee furnished old details once again without any fresh supporting or explanations and therefore under the circumstances assessee has nothing more to explain or submit and accordingly depreciation on leased transactions was denied. The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the alternative contention of the assessee that, if the transactions are treated as simple financial transactions, only interest portion should be brought to tax. The Assessing Officer never examined the lease agreements and tried to find out the real nature of the transactions. Though the matter was restored twice to examine the said transactions with proper perspective, there is complete failure on the part of the Assessing Officer to examine the transactions though the Tribunal set-aside the matter for examining the transactions vis- -vis the applicability of the decision of the Special Bench to the said transactions. Therefore, since the Assessing Officer miserably failed to examine the lease transactions with reference to the agreements vis- -vis applicability of the decision of the Special Bench in the case of Mid-East Portfolio Management Ltd. v. DCIT (supra) on this ground alone the addition is liable to be deleted. 11. Before us, Ld. Counsel for the assessee submitted that all the details in respect of the transactions were submitted before the Ld. CIT(A) and the Ld. CIT(A) though examined all the details again restored the matter to the file of the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'APSEB' for short) vide sale deed dated 29.09.1995 which as per the appellant, was given to the APSEB itself on lease. All the authorities below have found, as a fact, that there was no such purchase of machinery and the transaction in question is sham. On that basis, it was concluded that since the machinery was not purchased by the appellant, it never became the owner of the machinery and therefore, could not claim any depreciation thereof. These are pure findings of facts recorded by the authorities below. No question of law arises. The appeal is, accordingly, dismissed. So considering the above submissions and legal decision relied by the appellant as well as the revenue, I am of the considered opinion that the appellant company is entitled to claim depreciation on the leased assets except for Nath Pulp Paper Mills Ltd. Though the AR of the appellant vehemently argues that the confirmation from Nath Pulp Paper Mills Ltd. has not claimed depreciation on the leased assets. I am not convinced by the above information having the supplier and the lessee found to be the same entity, the ratio followed in M/s. Avasarala Technologies Ltd Vs Jt. CIT, Spl. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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