(Per : HONOURABLE MS JUSTICE SONIA GOKANI) In this Tax Appeal, challenge is to the order of the Tribunal dated 30th July 2010 proposing following questions for our consideration :
"A. Whether on the facts and in the circumstances of the case and in law the Appellate Tribunal has erred in holding that the depreciation of Rs.1,33,34,400/0- was allowable on Plant and Machinery in sale and lease back transaction which was in the nature of merely a financing transaction ?
B. Whether on the facts and in the circumstances of the case and in law the Appellate Tribunal has erred in holding that the deprecation was allowable on motor buses leased out to Ahmedabad Municipal Transport Services @ 40% as against @ 20% allowed by the Assessing Officer and thereby erred in deleting the disallowance of depreciation of Rs.11,553/- ?"
It is candidly pointed out by the learned counsel for the appellant that as far as first question is concerned, this Court in Tax Appeal No.242 of 2010 has decided the issue in favour of the assessee and against the Revenue. It would be apt to reproduce the findings :
"5.1 Taking firstly issue No.1 of depreciation and the lease out to RSEB and disallowance of claim of the assessee by the Assessing Officer, what emerges from the record is that the addition made of the sum of Rs.1,77,79,202/- has been deleted not only by the CIT(Appeals) but also by the Tribunal. They both concurrently held in favour of the assessee-respondent by its detailed reasonings.
5.2 It would be apt to mention, at this stage, that this Court in the case of CIT vs. Gujarat Gas Company Limited rejected the appeal of the Revenue on 10.9.2008 deciding this very issue against the Revenue. In the case of Commissioner of Income Tax vs. Sandesh Limited, this Bench in Tax Appeal No.1615 of 2009 vide order dated 15.3.2011, on the grounds of the facts being similar, held the said issue in favour of the assessee-respondent and against the Revenue. It would be apt to reproduce the relevant portion of the said order hereunder:-
" With respect to Question No.1, the facts are that during the assessment year under consideration, the assessee had entered into sale and lease back transaction with Rajasthan State Electricity Board in respect of Gas Booster Compressors & Fuel Oil Handling System and had claimed depreciation on the above sum of Rs. 1,00,00,801/=. The Assessing Officer, after detailed discussion in the assessment order, had treated the said transaction in the nature of hire-purchase and not as a lease agreement; as stated by the assessee, and had accordingly, disallowed the depreciation claim of the assessee. The issue was carried in Appeal by the assessee. CIT [A], by Order dated 25th March 2008 ruled in favour of the assessee. Revenue carried the matter in appeal before the Tribunal. The Tribunal, by impugned order dated 9th January 2009, dismissed the appeal relying on the previous decision of the Tribunal in the matter of Unimed Technologies Limited vs. DCIT [(2008) 73 ITD 150]. The decision of the Tribunal is under challenge before us in appeal.
Counsel for the revenue, while taking us to the record, sought to make distinction in the present case as compared to the facts in the case of Unimed Technoligies Limited [Supra]. We are, however, of the opinion that we need not go in such niceties. This Court, in the case of CIT vs. Gujarat Gas Company Limited, by its judgment dated 10th September 2008, rejected the appeal of the revenue on similar grounds, by making following observations :-
"6. With reference to decision of Rajasthan High Court as appearing in the order of Tribunal, the same relates to the decision reported in (2006)204 CTR (Raj) 415 in the case of CIT Vs. Rajasthan State Electricity Board. The question before the Rajasthan High Court was in relation to disallowance of payment of lease rentals on the transaction of sale-cum-lease back agreement and Rajasthan High Court has found that the Tribunal had rightly appreciated the facts and correctly found the transaction to be genuine and such a finding could not be treated to be perverse.
7. Admittedly, the transaction in question which the High Court of Rajasthan was called upon to deal with is the same transaction which has been found to be genuine by the Tribunal in the present case. The lease rental paid by Rajasthan State Electricity Board has been found by Rajasthan High Court to be allowable deduction as the transaction is genuine. Correspondingly, in hands of the assessee company, the said lease rental has been taxed as business income and the same has not been disturbed by the Assessing Officer despite having initiated action u/s. 147 of the Act for treating the transaction as a non-genuine transaction.
8. In the aforesaid facts and circumstances of the case whether the transaction of leasing out electrical equipments to Rajasthan Electricity Board is genuine or not is based on appreciation of evidence on record as found by the Tribunal by referring to the various documents like invoice etc. In absence of any evidence to show anything to the contrary no legal infirmity exists in the impugned order of the Tribunal so as to give rise to any question of law, much less a substantial question of law, as proposed or otherwise. The Appeal is accordingly dismissed.
Facts being similar, we see no reason to interfere in the present petition in so far as Question No. 1 is concerned."
6. In the aforementioned background, in present Tax Appeal also this issue needs to be held in favour of the assessee and against the Revenue."
Without recording separate independent reasons, this issue is to be held in favour of the assessee.
As far as second question is concerned, in view of smallness of the amount being a sum of Rs.11,553/-, this question is not gone into in this Tax Appeal.
Since no question of law much less substantial question law is arising, this Tax Appeal is dismissed.
(Akil Kureshi J.) (Ms.Sonia Gokani, J.) (vjn) Top