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TMI Blog2017 (6) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest u/s 234B of the Act. [Ground No. 2(a) to 2(b)]. 3. The ld. CIT(A) erred in law and on facts in levy of interest u/s 220(2) of the Act. 3. Brief facts of the case as emanating from the record of the case are that the assessee filed Nil return of income. The assessment completed under section 143(3) of on 31.03.1997, determining the total income of assessee at Rs. 1,63,88,736/-. The assessing officer disallowed depreciation on leased assets. Aggrieved by the assessment order the assessee filed appeal before the ld. CIT(A) wherein the action of Assessing Officer (AO) was sustained. Further, aggrieved by the order of ld. CIT(A), the assessee filed appeal before the Tribunal. The Tribunal vide order dated 22.12.2005 in ITA No(s) 2937,2959,& 2960/M/2001, restored back the matter to the file of AO with regard to disallowance of depreciation of leased assets. The AO was directed to examine the issue of disallowance of depreciation of leased assets denovo in the light of various judicial precedents by way of speaking order. The AO in set-aside proceeding again disallowed the depreciation in the order passed u/s 143(3) r.w.s. 254 of the Act. Aggrieved by the order AO, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that copies of the cheques were also produced, that the lease transactions were completed as per all legally prescribed procedures, that it was a rightful owner of leased assets that the lessees had confirmed the ownership of assets, that they had not claimed depreciation in their books of account for purchase and lease of assets, that lease rentals earned by the assessee was offered to tax and same was assets by the AO.s in the year under consideration as well as in the subsequent AY.s. Here, we would like to discuss the matter of I.C.D.S Ltd.(supra).In that case the Hon'ble Apex Court has held as under: "The provision on depreciation in the Income-tax Act, 1961, reads that the asset must be "owned, wholly or partly, by the assessee and used for the purposes of the business". Therefore, it imposes a twin requirement of "ownership" and "usage for business" for a successful claim under section 32 of the Act. The section requires that the assessee must use the asset for the "purposes of business". It does not mandate usage of the asset by the assessee itself. As long as the asset is utilized for the purpose of business of the assessee, the requirement of section 32 will stand s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period. The ld. AR of the assessee in support of his submissions relied upon the decisions of Tribunal in Freightship Consultants (P) Ltd. v. ITO (110 ITD 377) (Del), ACIT v. Sallauddin M. Kadri (ITA No. 2426/Ahd/2009) (ITAT Ahmedabad), Modi Industries Ltd. v. CIT, [1995] 216 ITR 759 (C) and decision of Hon'ble Bombay High Court in Cyanamid India Ltd. v. K.N. Anantharama Ayyar (203 ITR 561) (Bom.). On the other hand, ld. DR for the Revenue supported the order of authorities below. 8. We have considered the rival submission of the parties and gone through the order of authorities below. Considering the decision of Delhi Tribunal in Freightship Consultants (P) Ltd.(supra) and decision of Hon'ble Apex Court in Modi Industries Vs CIT [1995]216 ITR 759 (SC), we direct the AO to re-compute the interest in accordance with sub-section 4 of section 234B of the Act up to the date of original order of assessment passed by him and not up to the date of reassessment order passed in pursuance to the direction of the Tribunal. Hence, this ground of appeal raised by assessee is also allowed for statistical purpose. 9. Ground No.3 relates to interest charge u/s 220(2) of the Act. As we have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 220(2) of the Act. In the application the assessee requested that the interest should be charged till the passing of original assessment order dated 31.03.1997 (i.e. from 01.04.1994 to 31.03.1997). The application of assessee was rejected by assessing officer vide order dated 15.03.2007. Aggrieved, by the order of AO, the assessee filed appeal before the ld. CIT(A) but without any success. Thus, further aggrieved by the order of ld. CIT(A) dated 12.08.2010, the present appeal is filed before us. 19. We have heard the ld. AR of the assessee and the ld. DR for the Revenue and perused the material available on record. The ld. AR of the assessee relied upon the decision of CIT v/s Rajesh Kumar Dinesh Kumar (2010) 325 ITR 346 (Raj.), Smt. B. Indira Rani V/s CIT [2004] 271 ITR 0570 and the decision of Hon'ble Apex Court in Vikrant Tyres Ltd. V/s First Income-tax Officer 247 ITR 821 (SC). On the other hand, ld. DR for the Revenue supported the order of authorities below. 20. We have considered the rival submission of the parties and have gone through the order of authorities below. The assessee in Appeal ITA No. 1484/Mum/2012 has challenged the disallowance of depreciation on lease ..... X X X X Extracts X X X X X X X X Extracts X X X X
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