9911796707
TMI Blog2011 (3) TMI 1447X X X X Extracts X X X X X X X X Extracts X X X X ..... he Interest Tax Act, amount is retained by the assessee over which nobody has a claim, it has to be treated as income, appeal on this ground is accordingly dismissed. Disallowance of depreciation on the value of machinery leased out - depreciation claimed is on the entire value of machinery that is, Rs. 1,00,57,225/- on the ground that the item leased out is air pollution control equipment which is entitled for 100% depreciation – Held that:- when the lessor claims depreciation in respect of an item of machinery with reference to its use which is only made by the lessee, necessarily the lessee has to put to use the machinery for the purposes stated in the depreciation schedule to entitle it for the rate of depreciation provided therein. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lection. The Assessing Officer noticed that excess collection of interest tax forms part of income of assessee and so much so the same has to be assessed as income. This view is upheld by the two appellate authorities including the Tribunal against which the assessee has come up in appeal before us. Senior counsel appearing for the appellant assessee contended that the excess interest tax collection is to be remitted to the fund constituted by the Government in terms of the direction issued by the Hon'ble Supreme Court in the case of Indian Banks Association v. Devkala Consultancy Services [2004] 267 I.T.R 179/137 Taxman 69 (SC). There can be no doubt that if the amount is contributed by the assessee to the fund constituted by the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, the assessee itself felt that the claim of depreciation of Rs.99,69.006/-could not be established and therefore the claim was withdrawn. So far as the depreciation claimed on the lease made to M/s. Metal Point, Chennai is concerned, the claim is for Rs.28 lakhs. Even though the claim is pressed before us, what we find from the finding of the Assessing Officer confirmed by the Tribunal is that the claim, on enquiry is found to be bogus because the lessee M/s. Metal Point, Chennai was functioning in a small room and on detailed enquiry was made by the department, it was seen that that organisation was closed and was not functioning at all. Similarly, enquiry was conducted about the whereabouts of the supplier of the machinery to M/s. Met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal's order, we find that the department conducted a detailed enquiry with the lessees' premises and found that that as on the last date of the previous year, that is 30.3.1996, the company received the pollution control equipments in sealed crates. The department's findings is based on the "materials receipt report" of the Store Manager dated 30.3.1996. The assessee also admits that lessee had only taken supplies of the machinery and the same was obviously and admittedly not put to use in the previous year for eligibility for depreciation. However, assessee's counsel heavily relied on the decision of the Bombay High Court in the case of CIT v. v. Kotax Mahindra Finance Ltd. [2009] 317 ITR 236/[2010] 191 Taxman 280 (Bom.) where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claiming depreciation on an item of machinery but the depreciation claimed is in respect of pollution control equipment which identify at least the equipments has to assume at the end of the previous year. Therefore, in our view, at least assembling and commissioning of the system to get the identity with reference to the use of the machinery by the lessee is a mandatory requirement for eligibility for depreciation claimed by the lessor. We do not think the decision of the Bombay High Court applies in the case of claim of depreciation by lessor in respect of pollution control equipments in this case because, several items of machinery purchased and delivered on the last day of the previous year have not even attained the identity of pollu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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