9911796707
TMI Blog2011 (9) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 21-9-2011 - MRS.JUSTICE CHITRA VENKATARAMAN, MR.JUSTICE M.JAICHANDREN, JJ. For Appellant: Mr.T.Ravikumar For Respondent: Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar COMMON JUDGMENT CHITRA VENKATARAMAN, J. Following are the questions of law raised in respect of the assessment year 1993-1994: 1. Whether in the facts and circumstances of the case, the Appellate Tribunal was right in holding that the assessee is eligible to claim capital loss on the sale of the foreign cars. 2. Whether in the facts and circumstances of the case, the Tribunal was right in treating the assessee as the owner of foreign motor cars for the purpose of the allowing capital loss. 2. Following are the questions of law ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to the assessment year under consideration, the assessee is stated to have incurred loss on the sale of imported cars which were given on lease to various parties. The Assessing Officer directed the assessee to furnish the basis on which the sale value of the imported cars was fixed for the purpose of arriving at the gain that the assessee had. The Assessing Officer pointed out that the assessee did not file a reply. Thus, the Assessing Officer drew the conclusion that the assessee had created an artificial loss without any basis for fixing sale value and thereby reduced the taxable income by deducting the loss arrived at under the head Long Term Capital Gains. The officer further pointed out that since the cars were also imported ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the ordinary course of the business. 5. To a specific claim of the Revenue that the assessee had quoted such a low price only to get over the difficulty in claiming depreciation, the Commissioner of Income Tax (Appeals) pointed out that if the assessee had been entitled to claim depreciation on the assets, then the sale proceeds would be deducted from the block of assets for depreciation without disturbing the continued deduction of depreciation. The loss had now become deductable since no depreciation was allowed to the assessee. The difference between the cost of acquisition and the consideration for transfer had to be allowed under the head short term capital loss or long term capital loss, as the case may be. Pointing out to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cars which were purchased from the sister concerns were leased out to the lessees. The Revenue does not deny the genuineness of the lease and the terms of lease. As pointed out by the Commissioner of Income Tax (Appeals), when the sale of the cars itself flow from the terms of the lease agreement and the terms of the agreement thus not questioned by the Revenue, the mere fact that the cars were sold at a price so low and that the lessees could subsequently sell the car for a higher price would not defeat the claim of the assessee for capital loss. Thus, the Tribunal and the Commissioner of Income Tax (Appeals) held that there was no material placed before the authorities concerned to question the genuineness of the transaction. Even thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
