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TMI Blog2004 (9) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard the rival submissions and carefully perused the orders of the authorities below and the documents placed on record. 3. With respect to ground Nos. 1 (a) and (b) it is noticed from the record that the Assessing Officer has made an addition of Rs. 50,65,200 on account of lease rental received on Steel Cops and of Rs. 31,12,525 on account of lease rental received on aircraft. In this regard the learned counsel for the assessee has submitted that the assessee has filed its return on 29-11-1998 declaring a total income at nil. The assessee later on filed the revised return on 25-6-1998 and added back the entire depreciation claimed by it amounting to Rs. 63,47,016 on aircraft and steel cops and declared income at Rs. 14,66,630. Though the Assessing Officer has treated this revised return as non est because it was filed after the expiry of the time prescribed under section 139(4) of the Act, but in the assessment order she has started computing the income as per computation filed along with the revised return on 25-6-1998. In other words, the assessee did not claim depreciation on aircraft and steel cops, which has been accepted by the Assessing Officer. In its revised comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d withdrawal of claim of depreciation was approved by the Revenue, the Revenue cannot treat these rentals receipts as an income of the assessee. Only the finance charges can only be added to the income of the assessee and the same has already been offered to tax by the assessee in its revised return. The Commissioner of Income-tax (Appeals) examined the whole issue in detail and arrived at a conclusion that even if the entire sum is received as lease rentals the facts very clearly show that it also included the cost of the assets and that only a sum of Rs. 10,45,200 represented the interest out of the total lease rentals of Rs. 50,65,200. He accordingly hold that out of total lease rentals of Rs. 50,65,200 received on cops, a sum of Rs. 10,45,200 represented the interest, meaning thereby the balance amount of Rs. 40,20,000 represented the cost of the asset which can never be taxed if the transaction is treated as that of loans and advances. The CIT (Appeals) accordingly held that the Assessing Officer was not correct in adding Rs. 50,65,200 to the total income of Rs. 14,66,631 whereas the finance charges of Rs. 10,45,200 has already been included in the computation of income by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 27,02,610 paid to M/s. Olympic Management & Financial Services Ltd. [hereinafter referred to as M/s. OMFSL] on the last day of the accounting year i.e. 31-3-1996, which was a Sunday and a holiday. The Assessing Officer has disallowed these service charges for the reasons that the assessee could not prove the services rendered by M/s. OMFSL for the assessee. 8. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals) with a plea that there is no bar that the SEBI registered financial management company cannot render the services of the custom clearance. In fact most of the financial companies have entered into various other activities to survive and the Assessing Officer without conducting any enquiry and bringing any evidence on record came to the conclusion that this company has not rendered any services for the assessee. With respect to the debit note prepared on 31-3-1996 it was also contended that if the contention of the Assessing Officer is to be accepted then the balance sheet of all the companies which were made on 31-3-1996 could not have been prepared as this day was a Sunday. During the course of hearing the assessee has filed a detailed n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gus and nothing on record to show that the payment to M/s. Olympic Management & Financial Services Ltd. has been shown to evade taxes. The company is a widely held public limited company and unless it is proved otherwise expenditure and receipt both have to be accepted as the genuine. The transactions are through banks and there is no relationship between the management of these three companies to suggest any collusive arrangement for the evasion of tax. The document submitted in pages 187 to 192 of the Paper Book is a part of the books of account maintained by the appellant. It was submitted that had the Assessing Officer asked for these details, it could have been submitted before her also. Therefore, under the circumstances, these pages have to be admitted as evidence. On a consideration of all these facts and circumstances I am of the opinion that the payment to M/s. Olympic Management to the extent of Rs. 27,02,610 was genuine and is allowable under section 37(1) of the Act and the Assessing Officer is, therefore, directed to allow the same." 9. Aggrieved, the Revenue has preferred an appeal before the Tribunal and placed heavy reliance upon the order of the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L cannot be disallowed. 11. Having heard the rival submissions and from a careful perusal of the record, we find that the assessee has entered into a contract with some of the parties like HMG Financial Service Co. Pvt. Ltd., G.K. Dhanuka and JCT Ltd. to render services of clearance, transportation, loading and unloading of various consignments of equipments booked by these parties and for these services the assessee has received a sum of Rs. 1,50,04,828.62p. and this receipt was not disputed by the Revenue. The assessee instead of rendering the services itself for these principals, has engaged some other parties like Mr. Manhar Bhagat and M/s. OMSFL to perform the services as agreed by it with its principals and the assessee has made the payment of Rs. 27,02,610 to M/s. OMSFL for rendering the aforesaid agreed services of clearance, transportation, loading and un-loading of various consignments of equipments booked by the principals of the assessee. It is also an admitted fact that the assessee has not booked any other expenditure for rendering the aforesaid services to its principals. From the details of service charges received and paid by the assessee, we find that the assesse ..... 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