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TMI Blog2011 (3) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... 00, formulated the following substantial question of law: "Whether the Appellate Tribunal is right in law and on facts in allowing, under Explanation 4-A below Section 43(1) of the Income Tax Act, the claim by the assessee amounting to Rs.1,59,13,750/- and the sale and lease-back transaction in the facts and circumstances of the case is liable to be held as dubious?" Facts of the case concisely stated are as under: The respondent-assessee filed return of income on 30th November 1994 for A.Y. 1994-95. During the accounting year, the assessee had acquired the following two machines on hire purchase basis from Gujarat Lease Financing Ltd [GLFL, for short hereinafter]:- 1. Solid State Device for Controlling Motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd as per the agreement. All these transactions took place in March 1994. Both the above machines started functioning in the second half of March 1994 and were eligible for 100% depreciation under the Income Tax Rules. However, since the assets were been put to use for less than six months in the previous year under reference, the respondent-assessee had claimed depreciation at the rate of 50%, i.e. Rs.1,59,13,750/-. The Assessing Officer disallowed the claim of depreciation on the aforesaid two machines applying the ratio laid down by the Supreme Court in the case of Mc. Dowell and Company Limited, 154 ITR 148. The Assessing Officer held that the pre-ordained series of transactions culminating in the leasing of the machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld the view taken by the Commissioner (Appeals) and held that appeal against levy of interest is not maintainable. The Tribunal however held that the assessee would be entitled to consequential relief for computation of interest as a result of its order. Thus the Tribunal partly allowed the appeal. Aggrieved by the above order passed by the Tribunal, the Revenue has preferred the present appeal. We have heard Mr. K.M. Parikh, learned Standing Counsel for the appellant and Mr. S.N. Soparkar, learned senior advocate for the respondent-assessee. An identical question arose in Tax Appeal No. 444 of 2008, and a Division Bench of this Court has held in its judgment and order dated 10th September 2008 as under:- "3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an High Court to be allowable deduction as the transaction is genuine. Correspondingly, in hands of the assessee company, the said lease rental has been taxed as business income and the same has not been disturbed by the Assessing Officer despite having initiated action u/s. 147 of the Act for treating the transaction as a non-genuine transaction. In the aforesaid facts and circumstances of the case whether the transaction of leasing out electrical equipments to Rajasthan Electricity Board is genuine or not is based on appreciation of evidence on record as found by the Tribunal by referring to the various documents like invoice etc. In absence of any evidence to show anything to the contrary no legal infirmity exists in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant-revenue submitted that the Assessing Officer having not processed the claim of depreciation on merits, the Assessing Officer must be directed to grant depreciation on written down value of the assets in question. In light of the aforesaid order dated 10.09.2008 it is held that the transactions were genuine transactions and the Tribunal has not committed any error in allowing claim of depreciation. All the three questions stand answered accordingly. The Assessing Officer shall now process the claim of depreciation in accordance with law. The appeal stands dismissed accordingly with no order as to costs." In the light of the aforesaid two decisions of this court, the question involved in the present appeal stands conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X
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