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TMI Blog2015 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... BAY High Court] . However, the said decision of the Bombay High Court has been reversed by the Apex Court in the case of Nectar Beverages (P) Ltd. v. Deputy Commissioner of Income Tax, reported in [2009 (7) TMI 5 - SUPREME COURT ], therefore the question raised in this appeal is required to be answered in favour of the assessee and hold that the Tribunal was not right in law in holding that depreciation granted earlier can be withdrawn and taxed as income u/s 41(1) of the Act - Decided in favour of assessee. Enhancement of income - Held that:- Insofar as this question is concerned, in view of the decision of the Apex Court in the case of Micorp Global P. Ltd. v. Commissioner of Income Tax (2009 (2) TMI 5 - SUPREME COURT), the same is also required to be answered in favour of the assessee. - Tax Appeal No. 1113 of 2006 - - - Dated:- 23-12-2014 - KS Jhaveri And K. J. Thaker,JJ. For the Appellant : Mrs Swati Soparkar, Adv. For the Respondent : Mr K M Parikh, Adv. JUDGMENT ( Per : Honourable Mr. Justice KS Jhaveri ) 1. By way of this appeal, the appellant-assessee has challenged the judgment and order passed by the Income Tax Appellate Tribunal, Ahmadabad [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue. 4.2. Insofar as third and last question is concerned, he submitted that if question Nos. 1 and 2 are concluded in favour of the assessee, the third question of law will become academic. However, for question No.3 he has relied on the decision of the Apex Court in the case of Micorp Global P. Ltd. v. Commissioner of Income Tax reported in [2009] 309 ITR 434. 5. On the other hand, learned advocate for the respondent-revenue has supported the impugned order of the Tribunal and submitted that the Tribunal after appreciating the material on record has passed the impugned order, therefore, there is no germane reason to interfere with the impugned order of the Tribunal. He, therefore, urged to dismiss this appeal. 6. We have heard learned advocates appearing for the parties and perused the material on record. Before dealing with the contentions, it would be relevant to reproduce Section 155(4A) of the Income Tax Act, which reads as under:- 155(4A) Where an allowance by way of investment allowance has been made wholly or partly to an assessee in respect of a ship or an aircraft or any machinery or plant in any assessment year under section 32A and subsequently - (a) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new aircraft or new machinery or plant shall have the same meaning as in the (explanation below sub section (2) of section 32A. 7. On plain reading of section 155(4A) of the Income Tax Act, we find substance in the contention of learned senior advocate for the appellant-assessee that the conditions which have been enumerated in clause 4A of Section 155 of the Income Tax Act are not fulfilled by the revenue. Therefore, in our considered opinion the question No.1 raised in this appeal is required to be answered in favour of the assessee and against the revenue. Accordingly, we hold that the tribunal was not right in law in holding that investment allowance granted in A.Y. 1983-84 and adjusted in A.Y. 1990-91 can be withdrawn in the year under consideration.8. Insofar as question No.2 is concerned, it appears from the record that the Tribunal has decided the appeal solely on the basis of the decision of the Bombay High Court in the case of Nectar Beverages (P) Ltd. v. Deputy Commissioner of Income Tax, 267 ITR 385. However, the said decision of the Bombay High Court has been reversed by the Apex Court in the case of Nectar Beverages (P) Ltd. v. Deputy Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, became exigible to capital gains tax under Section 50. 14. Before concluding, it may be pointed out that, in the case of Nector Beverages Pvt. Ltd., assessee has earmarked the sale proceeds from bottles and crates as miscellaneous income and not as profit on sale of assets whereas, in the case of other assessees, including Industrial Oxygen Co. Ltd. (now known as Inox Air Products Ltd.), the said sale proceeds have been earmarked specifically under the Heading Profits from sale of assets . To this limited extent only, we remit the case(s) of Nectar Beverages Pvt. Ltd. [Civil Appeal Nos. 5291/04, 5293/04 and 359-360/06] to the A.O. to go through the computation submitted by Nectar Beverages Pvt. Ltd. and find out whether earmarking profits from sale of assets as miscellaneous income has resulted in the understatement of net profits at the pre-Section 28 stage and taxable profits at post-Section 28 stage. In all other cases, sale proceeds have been earmarked as profits on sale of assets and in those cases, therefore, there is no question of verification by the Assessing Officer. 9. In view of the above, we are of the considered opinion that the question No.2 rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrent findings of fact recorded by the authorities below. We accordingly hold that transaction dated 15.3.1991 is not proved. Therefore, the AO was right in disallowing depreciation amounting to ₹ 30,17,122/-. 12. Before concluding, we may mention that an alternative submission was advanced on behalf of the assessee in the context of the second transaction that, if the said transaction was a financial arrangement, as held by the Department, even then the assessee could be taxed only on Interest embedded in the amount of lease rentals received from the lessee, M/s Aravali Leasing. In this connection, it was submitted that the assessee had earned total income of ₹ 6,33,596/- over a period of 36 months commencing from 15.3.1991 to 14.3.1994. Therefore, the matter should be remitted for recalculation. We do not find any merit in this argument for the simple reason that the concurrent finding shows that transaction dated 15.3.1991 is a sham. The finding shows that the transaction had not been proved by the assessee. In the circumstances, there is no question of the matter being remitted, as prayed for. Consequently, the AO was right in coming to the conclusion that trans ..... 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