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TMI Blog2015 (9) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... pment leased to Prakash Industries Ltd on the ground that the real nature of the transaction is finance lease and the appellant is not entitled to depreciation - Held that:- The fact that the assessee took the issue before the Arbitration itself goes to prove that the transaction was genuine. From the details as filed by the assessee we find that as a consequence of award of the Arbitration in favour of the assessee, the assessee was able to repossess the equipment and sell the same on as is where is basis. The factual aspect of claim and allowance of depreciation has been held to be in favour of the lessor, by the courts. As the fact that the assessee repossessed the APEC equipment and sell it, goes to prove the genuineness of the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any grounds of appeal during the course of the hearing . 2. Ground no. 1 pertains to the legality for initiation of reassessment proceedings u/s 148. 3. The facts in the proceedings are that the instant proceedings are 2nd round after having been set aside by the order of the ITAT. In the assessment order, the AO mentions that vide ITAT order, the AO was invested with twin jurisdiction, i.e. (i) to consider the submissions of the assessee afresh with regard to reopening of assessment u/s 147 and (ii) to consider the ratio laid down in the case of Asea Brown Boveri Ltd. on the facts of the case. 4. In the instant case, regular assessment was framed u/s 143(3) vide order dated 30.03.1998. In the regular assessment proceedings, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulted in a claim of depreciation of ₹ 1,19,88,000/- of Unichem Lab Ltd. for AY 95-96. The order u/s. 143(3) in this case for AY 95-96 has apparently allowed this claim of depreciation. Now on receipt of this report from DI (Inv) Ludhiana, since there is prima facie reason to believe that depreciation of ₹ 1,19,88,000/- has been wrongly allowed to the assessee on its submission of false particulars of transaction with Prakash Industries, I issue notice u/s. 148 for A. Y. 95-96 to re-assess the escaped income . The AO, therefore, reopened the case on 12.03.1999. 5. As mentioned earlier, the legality and factual issues had earlier reached the ITAT, but were set aside to the AO. The revenue authorities in the instant proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties, the assessee submitted detailed evidence to prove that the transaction in question was an actual transaction and submitted complete details pertaining to acquisition of the asset and supply thereof to PIL at Bilaspur and as to how the assessee claimed depreciation on the equipment. The entire evidence and submissions were rejected by the revenue authorities on the basis of presumed hawala deal and in any case, depreciation was not available, as held in the case of Asea Brown Boveri Ltd. vs IFCI, reported in 322 ITR 381 (Bom). Hence the CIT(A), sustaining the order of the AO, disallowed the claim of depreciation, as made by the assessee. 11. Against this order of the CIT(A), the assessee is in appeal before the ITAT. 12. Before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the lease period, differences arose between the assessee and PIL with regard to payment of lease amount, the issue was taken before the Arbitration, who gave the award in favour of the assessee. As a result, the APCE was repossessed by the assessee on as is where is basis and was sold as scarp for ₹ 3,00,000/- (sale bill at APB 78). 15. The fact that the assessee took the issue before the Arbitration itself goes to prove that the transaction was genuine. From the details as filed by the assessee we find that as a consequence of award of the Arbitration in favour of the assessee, the assessee was able to repossess the equipment and sell the same on as is where is basis. The factual aspect of claim and allowance of depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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