9911796707
TMI Blog2015 (2) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assessee-company, which is engaged in the business of leasing, hire purchase and financing, filed its returns of income. Subsequently, there was a survey conducted u/s 133A of the Income-tax Act, 1961[hereinafter referred to as 'the Act'] at the premises of M/s.Bellary Steels & Alloys Ltd., ['BSAL' for short] on 1-8-2000 which revealed that numerous finance companies including the assessee had entered into transactions with BSAL which would enable the assessee to claim 100% depreciation on assets (Rolling mill rollers) which, according to the Department, did not exist at all. In view of the information received from the Deputy Director of Investigation, Hubli, on the findings in the survey, the case was re-opened u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if they are recorded, they are not sufficient to re-open the assessment. The learned Departmental Representative has furnished the assessment records before us and it is seen there-from that the reasons for reopening have been duly recorded and the assessee has not asked for the reasons either at the time of assessment proceedings or during the appellate proceedings. Therefore, we are not inclined to accept the contention of the learned counsel for the assessee that no reasons have been recorded for reopening of the assessment. As regards the sufficiency of reasons for reopening of the assessment also, we find that the assessee has not raised any such ground before the AO or the CIT(A) nor has filed any evidence before us to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test and therefore in view of the provisions of sec.124(3)(a), we are of the opinion that the assessee is not entitled to raise this question at this stage. Therefore, we are not inclined to entertain this argument of the assessee and reject the same. In view of the same, ground No.2 relating to validity of the reopening of the assessment u/s 148 of the Act is rejected. 6. The next ground raised by the assessee is that the notice u/s 143(2) is barred by limitation. In this connection, the learned counsel for the assessee submitted that the assessee has filed its return of income on 11-1-2001 for both the assessment years while the notices u/s 142(1) were issued on 25-1-2001 and notice u/s 143(2) was served on 4-2-2002 i.e. well beyond 12 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid. 7. Having heard both the parties and having considered the rival contentions and the material on record, we find that there is no dispute with regard to the return of income of being filed by the assessee for both the assessment years pursuant to notices u/s 148, on 11-1-2001. As provided under sec.143 of the Act, the notice under sub-sec.(2) thereof has to be served on the assessee within a period of 12 months from the end of the month of filing of the return. The period of 12 months would therefore end on 31-1-2002 and the notices under sec.143(2) dated 4-2-2002 (according to the assessee) and 31-1-2002 (according to the Department) were definitely served on the assessee after expiry of the said period. However, these notices are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL on the other hand were only paper transaction and there was no genuine purchase of lease of assets. By entering into paper transaction, the assessee has benefitted by availing depreciation at the rate of 100% of the value of the assets in question. However, as the assessee has not been able to substantiate or lead any evidence to the effect that assets in question were physically leased to BSAL and there was no physical movement of assets from Mumbai to Bellary. The survey conducted under section 133A of the Act on the premises of BSAL and on verification of records, it was found that all these lease transactions are bogus. The Managing Director of BSAL admitted that the Company is raising lease fiancé in respect of non-existing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the order of the AO while the learned counsel for the assessee placed reliance upon the orders of the CIT(A). 12. We find that the CIT(A) has appreciated the contention of the assessee that leasing is also a part of hiring and therefore there is bound to be higher wear and tear due to rough use and the Hon'ble Madras High Court in the case of CIT vs. Madan & Co.(254 ITR 445) has held that the essence of higher depreciation on assets given on hire is that there is higher wear and tear due to rough use. The Revenue has not been able to present before us any decision to the contrary or any evidence to the contrary. In view of the same, we are not inclined to interfere with the order of the CIT(A). 13. In the result, the revenue's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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