Income Tax Appellate Tribunal - Amritsar
Libra Finance & Carriers P.Ltd,, Jammu vs Department Of Income Tax on 28 June, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
AND SH. B.P. JAIN, ACCOUNTANT MEMBER
I.T.A. No.163 (Asr)/2001
Assessment year: 1997-98
PAN: 12-P
M/s. Punjab Kashmir Finance Vs. Joint Commissioner of
Pvt. Ltd., G.T. Road, Jalandhar Income Tax, Special Range,
Jalandhar City
(Appellant) (Respondent)
I.T.A. No.159 (Asr)/2003
Assessment year: 1998-99
PAN:
M/s P.K.F. Finance Limited Vs. Assistant Commissioner of
Namdev Chowk, Income Tax, Range-III,
Jalandhar City Jalandhar City
(Appellant) (Respondent)
I.T.A. No.115 (Asr)/2000
Assessment year: 1996-97
PAN:
The Reliable Agro Engg. Vs. Joint Commissioner of
Services Pvt. Ltd., Income Tax, Special Range
Jalandhar City Jalandhar City
(Appellant) (Respondent)
Assessee by: Sh. Sandeep Vijh, CA
Department by: Sh. Tarsem Lal, DR
2
I.T.A. No.286, 287 & 288(Asr)/2009
Assessment year: 1997-98, 1998-99,1999-2000
PAN: AAACL2360F
M/s Libra Capital (P) Ltd. Vs. Income Tax Officer-IV(2),
Now Libra Automobiles Ltd., Ludhiyana
1031 Gopal Nagar, Patel Chowk,
Jalandhar
(Appellant) (Respondent)
I.T.A. No.385(Asr)/2004
Assessment year: 1997-98
PAN: 5-L
Libra Auto & General Finance Vs. Joint Commissioner of
Ltd. 1031, Gopal Nagar, Income Tax, Spl. Range,
Jalandhar Jalandhar
(Appellant) (Respondent)
I.T.A. No.140(Asr)/2011
Assessment year: 2004-05
PAN: AAACL2361E
Libra Auto & General Finance Vs. Astt. Commissioner of
Ltd. 1031, Gopal Nagar, Income Tax, Range-IV,
Jalandhar Jalandhar
(Appellant) (Respondent)
I.T.A. No.73(Asr)/2004
Assessment year: 1999-2000
PAN: 5-L
Libra Auto & General Finance Vs. Income Tax Officer,
Ltd. 1031, Gopal Nagar, IV(2), Jalandhar
Jalandhar
(Appellant) (Respondent
I.T.A. No.329(Asr)/2002
Assessment year: 1995-96
PAN:
M/s Libra Finance & Carriers Vs. Deputy Commissioner of
3
Pvt. Ltd, 1031- Gopal Nagar, Income Tax, Spl. Range,
Patel Chowk. Jalandhar
(Appellant) (Respondent
I.T.A. Nos.130 & 129(Asr)/2003
Assessment years: 1996-97, 1997-98
PAN: AAACL2397J
M/s Libra Finance & Carriers Vs. Deputy Commissioner of
Pvt. Ltd, 1031- Gopal Nagar, Income Tax, Range-IV,
Jalandhar. Jalandhar
(Appellant) (Respondent
I.T.A. No.119(Asr)/2002
Assessment year: 1998-99
PAN:
Deputy Commissioner of Vs. M/s Libra Finance & Carriers
Income Tax, Range-IV, Pvt. Ltd, 1031- Gopal Nagar,
Jalandhar. Jalandhar
(Appellant) (Respondent
I.T.A. No.289(Asr)/2009
Assessment year: 2001-02
PAN:
M/s Libra Finance & Carriers Vs. Deputy Commissioner of
Pvt. Ltd, 1031- Gopal Nagar, Income Tax, Range-IV,
Patel Chowk, Jalandhar. Jalandhar
(Appellant) (Respondent
Assessee by: Sh. Prem Singh, Advocate and Gunjit Singh, ITP
Department by: Sh. Tarsem Lal, DR
I.T.A. No.309(Asr)/2011
Assessment year: 2002-03
PAN: AAACL2397J
Libra Finance & Carriers Vs. Asstt. Commissioner of
Pvt. Ltd, 1031 Gopal Nagar, Income Tax, Range-IV,
Jalandhar. Jalandhar
(Appellant) (Respondent
4
I.T.A. No.484(Asr)/2010
Assessment year: 2005-06
PAN: AAACL2397J
Libra Finance & Carriers Vs. Asstt. Commissioner of
Pvt. Ltd, 1031 Gopal Nagar, Income Tax, Range-IV,
Jalandhar. Jalandhar
(Appellant) (Respondent)
I.T.A. No.40(Asr)/2012
Assessment year: 2004-05
PAN: AAACL2397J
Asstt. Commissioner of Vs. M/s Libra Finance & Carriers
Income Tax, Circle-IV, Pvt. Ltd, 1031 Gopal Nagar,
Jalandhar. Jalandhar
(Appellant) (Respondent
I.T.A. No.47(Asr)/2012
Assessment year: 2004-05
PAN: AAACL2397J
Libra Finance & Carriers Vs. Joint Commissioner of
Pvt. Ltd, 1031 Gopal Nagar, Income Tax, Range-IV,
Jalandhar. Jalandhar
(Appellant) (Respondent
Assessee by: Sh. J.S Bhasin, Advocate
Department by: Sh. Tarsem Lal, DR
Date of hearing: 28/06/2013
Date of pronouncement: 17/07/2013
ORDER
PER BENCH 5 These eighteen appeals of the different assessees and Revenue arise from different orders of CIT(A), Jalandhar, as per details given below:
S. ITA No. Name of the Asstt. Year CIT(A) Date of No. party order
1. 163/Asr/01 Punjab Kashmir 1997-98 Jalandhar 15.03.2001 Finance Pv.Ltd.
2. 159/Asr/03 P.K.F.Finance 1998-99 -do 27.03.03 Ltd.
3 115(Asr/2k Reliabale Agro 1996-97 -do- 10.01.2000
Engg. Service
Pvt. Ltd.
4. 286/Asr/09 Libra Capital P. 1997-98 -do- 04.02.09
Ltd. Now Libra
Automobiles
Ltd.
5. 287/Asr/09 -do- 1998-99 -do- -do-
6. 288/Asr/09 -do- 1999-2k -do- -do-
7. 385/Asr/04 Libra Auto & 1997-98 -do- 05.05.2004
General Finance
Ltd.
8. 140/Asr/11 -do- 2004-05 -do- 31.01.11
9. 73/Asr/04 -do- 1999-2000 -do- 29.12.03
10. 329/Asr/02 Libra Finance & 1995-96 -do- 26.8.02
Carriers P. Ltd.
11. 130/Asr/03 -do- 1996-97 -do- 30.1.03
12. 129/Asr/-03 -do- 1997-98 -do- 30.1.2003
13. 119/Asr/02 Revenue 1998-98 -do- 16.1.2002
6
14. 289/Asr/09 Libra Finance & 2001-02 -do- 04.02.09
Carriers P. Ltd.
15. 309/Asr/11 -do- 2002-03 -do- 25.2.2011
16. 484/Asr/10 -do- 2005-06 -do- 29.9.2010
17. 40/Asr/12 Revenue 2004-05 -do- 25.11.11
18. 47/Asr/12 Libra Finance & 2004-05 -do- -do-
Carriers P. Ltd.
2. The issues in all the appeals are identical and therefore, all the appeals are being taken up by this consolidated order.
3. First of all, we will take up appeal of the assessee in the case of M/s.
Punjab Kashmir Finance P. Ltd; Jalandhar for the assessment year 1997-98 in ITA No.163(Asr)/2001, where the following grounds of appeal have been taken by the assessee, which are reproduced as under:
"1. That on the facts and in the circumstances of the case, the ld. CIT(A), has erred in holding that appellant was not carrying lease business and thus could not give vehicles on lease during the assessment year under appeal and this finding is not based on any material brought on record. The CIT(A) has merely relied upon the finding given in the earlier year in the case of sister concerns.
2. That on the facts and in the circumstances of the case, the ld. CIT(A), has erred in sustaining the disallowance of depreciation on vehicle given on lease during the year under appeal on the same set of material and documents which had been executed in earlier years when depreciation has been allowed in the past.
3. That on the facts and in the circumstances of the case, the appellant fulfilled the requirement of section 32 of the Act and had rightly claimed depreciation on lease assets."7
4. The brief facts as arising out of AO's order are reproduced for the sake of convenience as under:
"It was seen from the computation of income that assessee claimed depreciation as per Income tax of Rs.1.64 crores and included therein was depreciation on account of leased vehicles of Rs.1.58 crore. The said claim was for the vehicles purchased by the assessee during the year and earlier year for its head office as well as for its branches at Delhi and Nawanshahar. The issue of allowability/disallowability of depreciation has already been considered in this case in the earlier year and when asked A.R. explained that nature of transactions effected by the assessee during the year are similar to the earlier year including the accounting entries passed for purchase of vehicles from outside parties, entries passed while leasing out the said vehicles, other documentary evidence like registration of the vehicle, insurance etc. Therefore, A.R. was asked as to why the similar conclusion of earlier year be not applied to this year, facts being similar. It is seen from the appellate order for the assessment year 1996-97 in case of assessee that Ld. CIT(A) based on the appellate order in the case of M/s. PKF Finance Limited, associate concern of the assessee, concluded that the company was not owner of the vehicles ( claimed to have been leased out) in the eyes of Motor Vehicle Authority, insurance company, suppliers and its customers. So just by making entries in the books of accounts or entering into printed lease agreements it cannot become owner. Accordingly, it was held that company is not owner of the vehicles and accordingly was not carrying out any lease transactions as far as the trucks are concerned and that it was merely advancing money purely for finance purposes. Therefore, following the analogy as per decision of Hon'ble Supreme Court in the case of Sundram Finance vs. State of Kerala - AIR - (1996) 1178 Ld. CIT(A) concluded that assessee was not entitled to any depreciation. But at the same time directed that where ownership is not the dispute assesse will be entitled to depreciation on the WDV value of the assets reflected as opening WDV as on 1.4.1996. At the same time Ld. CIT(A) accepted the assessee's claim that the capital component embedded in the lease capital be segregated and accordingly it was directed that only interest component included in the lease charges, therefore, be treated as income of the assessee rather than treating the entire lease charges as income.8
Based on the directions above and facts being similar in this case as in case of associate concern, A.R. was asked to submit the working of the depreciation by excluding the depreciation on leased vehicles purchased during the assessment year 1996-97 and 1997-98 and also to furnish break up of the lease rental in each case under the head lease interest and segregate it from the capital component embedded in the overall lease charges in each case. It is seen from the working that allowable portion of depreciation out of the overall depreciation claim stand at Rs.50,47,286/- while lease capital embedded in the lease rental is of RS.98,58,978/-. Therefore, for the year based on the discussion above and after discussion with the A.R. similar finding will be applicable to the facts of the relevant year that the assessee in fact entered into finance transactions as against so claimed lease transactions. Facts revolving around ownership point of vehicles, claimed to have been leased out are similar as in assessment year 1996-97, therefore, for transaction effected relevant previous year, similar conclusion are drawn as A.R. has not submitted any new arguments against said conclusion. Therefore, based on working provided by the A.R. and after discussion, the variation which will be effected to the returned income is worked out as under:
Depreciation as per Income -tax Chart for the A.Y.1997-98 16475883 Less; Depreciation on leased vehicles: 15828033 647850 Add depreciation on vehicles purchased upto 31.3.95 Jalandhar: 8218474 Delhi: 9028392 Nawanshahar 1084119 18330985 Depreciation @ 40% for A.Y.1996-97 7332394 10998591 9 Depreciation @ 40% for A.Y.1997-98 4399436 4399436 5047286 Depreciation as claimed 16475883 Allowable 5047286 as above. 11428587 Less: Lease capital component 9858978 Lease charges Amount to be added 1569619"
5. The Ld. CIT(A) confirmed the action of the A.O. since similar additions were upheld in various appellate orders in various assessees of the same group referred to in para 1.1 in CIT(A)'s order.
6. The Ld. counsel for the assessee Sh. Sandeep Vijh, CA submitted and argued that it was earlier held that the lease rent transactions were in the nature of finance transactions and thereby the addition of lease rent to chargeable interest was confirmed by the CIT(A). The present position is that lease transactions have been treated as genuine lease transactions and depreciation on the vehicles given on lease has been allowed. The Jurisdictional High Court has in the case of PKF Finance Ltd. for the Assessment Year 1995-96 decided the issue in favour of the assessee and following this decision various other group cases have been decided in 10 favour of the assessee group in the hearing fixed for 14.06.2013. In view of the decision of the Jurisdictional High Court which is enclosed at page no. 38 to 44 and which is based on the decision of the Supreme Court, the lease rent charges which are for the vehicles given on rent for which depreciation on vehicles has also been allowed, cannot be treated as finance transactions.
7. The Ld. DR, Mr. Tarsem, relied upon the orders of both the authorities below.
8. We have heard the rival contentions and perused the facts of the case. It is pertinent to mention that on identical issue in the case of M/s. P.K.F. Finance Ltd. vs. CIT, the matter has traveled before the Jurisdictional High Court of Punjab & Haryana where the assessee has raised a substantial question of law "whether the Tribunal was justified in concurring with the findings of the authorities below that the appellant is not entitled for a depreciation under section 32 of the Income Tax Act, 1961 being a leasing company and holding the company as a financier". In the said case, the assessee claimed that the vehicles were given on lease and the same were assets for the business of the assessee and as such the assessee is entitled to depreciation. The AO found that the assessee was not doing leasing business at all. The AO disallowed claim of depreciation which was confirmed by the ld. CIT(A) holding that the transactions should be treated as finance 11 transactions and not as lease transactions, as claimed by the assessee. The Tribunal in the said case gave finding that the assessee was not owner of the vehicle and that mere possession under the term of an agreement to purchase, shall not entitle the assessee to depreciation.. The Hon'ble Jurisdictional High Court of Punjab & Haryana following the decision of Hon'ble Supreme Court in the case of I.C.D.S. Ltd. vs. Commissioner of Income Tax (2013) 3 SCC 541 held the vehicles leased by the assessee are the assets of the assessee used during the course of business and thus entitled for depreciation under section 32 of the Act and accordingly first question of law answered in favour of the assessee and against the Revenue. The jurisdictional High Court in the case f M/s. PKF Finance Ltd. vide order dated 13.05.2013 in ITA No.158 of 2002 (O&M) alongwith other connected matters has decided the issue which for the sake of clarity, is reproduced as under:
"The present appeal under Section 260A of the Act arises out of an order passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short 'the Tribunal) on 29.04.2002 in respect of assessment year 1995-96. The assessee has claimed the following substantial questions of law:
"1. That whether under the facts and circumstances of the case and true interpretation of the lease agreement and various other documents, the Hon'ble Tribunal was justified in concurring with the findings of the authorities below that the 12 appellant is not entitled for a depreciation u/s 32 of the Income Tax Act amounting to Rs.17,92,860/- being a leasing company and holding the appellant only as a financier?
Alternatively and wit out conceding in case the Hon'ble Court concurs with the findings of the Hon'ble Tribunal that the appellant is not eligible to get the depreciation on the leased assets-the other Substantial Question of Law be formulated.
2. That whether the Hon'ble Tribunal and the authorities below are not justified in not adjudicating on the issue of taxing only the interest income in the hands of the appellant and not then total amount of realisation as lease rental which have the component of capital receipt also?"
The aforesaid questions of law in the present appeal arise out of the fact that the assessee has filed its return of income from the business of hire purchase & financing of vehicles etc. The assessee claimed that the vehicles i.e trucks were given on lease, therefore, the same are assets for the business of the assessee and, thus, the assessee is entitled to depreciation. The Assessing Officer found that the assessee was not doing leasing business at all. After disallowing the claim of depreciation, the taxable income of Rs.15,54,330/- was assessed as income of the assesse. An appeal against the said 13 order was dismissed by the Commissioner of Income Tax (Appeals), Jalandhar on 18.08.1999 holding that transactions should be treated as finance transactions and not as lease transactions, as claimed by the assessee nor the hire purchase transactions, as held by the Assessing Officer.
In further appeal before the Tribunal, a finding was returned that the assessee was not owner of the vehicle and that mere possession under the term of an agreement to purchase, all not entitle the assessee to depreciation. The Tribunal noticed that in the Registration Certificate, the so called lessor was shown to be the owner of the vehicle and that the insurance has been obtained by individual customers. It has also been noticed that the assessee has carried out the activities of business of financing/ hire purchase. Reference was made to definition of 'Owner' contained in Section 2(3) of the Motor Vehicle Act, 1988. The agreement produced by the assessee was held to be document executed to give security to the assessee for re-payment of the loan amount. It was also held that though the agreement prohibits the lessee from making any 14 alterations/additions or improvement to the chasis, but since the chasis cannot be put to use for any purpose, therefore, when the goods to be leased out must be in a position to put to some purpose before depreciation is allowed. Considering the another clause of the agreement that lessee would be entitled to full depreciation in case of theft and loss of vehicle, it was held that the assessee is in the business of financing and not leasing. In view of the said findings, the assessee as claimed the aforesaid questions of law. In a recent judgment reported as I.C.D.S Ltd. vs. Commissioner of Income Tax, (2013) 3 SCC 541, the Hon'ble Supreme Court as examined the question as to whether the assessee is owner of the vehicle, which are leased out and is entitled to depreciation on the vehicles leased out by him on the ground that they were hired out to customers. It was held after examining the definition of 'Owner' given in the Motor vehicle Act, 1988 that the assessee is owner of the vehicle and that the assessee did use the trucks in business. The assessee satisfied the condition that it must use the asset for the purposes of business. It does not mandate usage of the asset 15 by the assessee itself. As long as the asset is utilized for the purpose of business of the assessee, the requirement of Section 32 would stand satisfied. The Supreme Court held to the following effect.
"15. We would like to dispose of the second contention before considering the first. Revenue argued that since the lessees were actually using the vehicles, they were the ones entitled to claim depreciation, and not the assessee. We are not persuaded to agree with the argument. 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 satisfied, notwithstanding non-usage of the asset itself by the assessee. In the present case before us, the assessee is a leasing company which leases out trucks that it purchases. Therefore, on a combined reading of Section 2(13) and Section 2(24) of the Act, the income derived from leasing of the trucks would be business income, or income derived in the course of business, and as been so assessed. Hence, it fulfills the aforesaid second requirement of Section 32 of the Act viz. that the asset must be used in the course of business.
xxx xxx xxx
25. The general opening words of the Section say that the owner of a motor vehicle is the one in whose name it is registered, which, in the present case, is the lessee. The subsequent specific statement on leasing agreements states that in respect of a vehicle given on lease, the lessee who is in possession shall be the owner. The Revenue thus, argued that in case of ownership of vehicles, the test of ownership is the registration and certification. Since the certificates were in the name of the lessee, they would be the legal owners of the vehicles and the ones entitled to claim depreciation. Therefore, the general and specific statements on 16 ownership construe ownership in favour of the lessee, and hence, are in favour of the Revenue.
26. We do not find merit in the Revenue's argument for more than one reason: (i) Section 2(30) is a deeming provision that creates a legal fiction of ownership in favour of lessee only for the purpose of the MV Act. It defines ownership for the subsequent provisions of the MV Act, not for the purpose of law in general. It serves more as a guide to what terms in the MV Act mean. Therefore, if t e MV Act at any point uses the term owner in any Section, it means the one in whose name the vehicle is registered and in the case of a lease agreement, the lessee. That is all. It is not a statement of law on ownership in general. Perhaps, the repository of a general statement of law on ownership may be the Sale of Goods Act;
(ii) Section 2(30) of the MV Act must be read in consonance with sub-sections (4) and (5) of Section 51 of the MV Act, which were referred to by Mr. S. Ganesh, learned senior counsel for the assessee. Therefore, the MV Act mandates that during the period of lease, the vehicle be registered, in the certificate of registration, in the name of the lessee and, on conclusion of the lease period, the vehicle be registered in the name of lessor as owner. The Section leaves no choice to the lessor but to allow the vehicle to be registered in the name of the lessee.Thus, no inference can be drawn from the registration certificate as to ownership of the legal title of the vehicle; and (iii) if the lessee was in fact the owner, he would have claimed depreciation on the vehicles, which, as specifically recorded in the order of the Appellate Tribunal, was not done. It would be a strange situation to have no claim of depreciation in case of a particular depreciable asset due to a vacuum of ownership. As afore-
noted, the entire lease rent received by the assessee is assessed as business income in its ands and the entire lease rent paid by the lessee as been treated as deductible revenue expenditure in the ands of the lessee. This reaffirms the position that the assessee is in fact the owner of the vehicle, in so far as Section 32 of the Act is concerned.
xxx xxx xxx 17
29. Therefore, in the facts of the present case, we hold that the lessor i.e. the assessee is the owner of the vehicles. As the owner, it used the assets in the course of its business, satisfying both requirements of Section 32 of the Act and hence, is entitled to claim depreciation in respect of additions made to the trucks, which were leased out."
In view of the aforesaid judgment , the vehicles leased by the assessee are the assets of the assessee used during the course of its business and thus, entitled to depreciation under Section 32 of the Act. Accordingly, the first question of law is answered in favour of the assessee and against the Revenue."
9. Since the issue in the present appeal is identical where the assessee has claimed a depreciation of Rs.1,58,28,033/- on the leased vehicles which has been disallowed by the A.O. and the action of the A.O. has been confirmed by the ld. CIT(A). Since the issue is identical in the present appeal with the issue in the case of M/s. PKF Finance Ltd. (supra) where the jurisdictional High Court has decided the issue in favour of the assessee and against the revenue. Thus, respectfully following the decision of the Jurisdictional High Court in the case of M/s. PKF Ltd. (supra) alongwith connected matters mentioned hereinabove, the vehicles leased by the assessee are assets of the assessee used during the course of his business and 18 thus entitled to depreciations u/s 32 of the Act. Therefore, the AO is directed to allow the claim of the assessee. Accordingly, order of the Ld. CIT(A) is reversed and grounds No. 1, 2 & 3 of the assessee are allowed.
10. In the result, the appeal of the assessee in ITA No.163(Asr)/2001 is allowed.
11. Now, we take up the appeal of the assessee in the case of M/s. P.K.F. Finance Ltd. for the assessment year 1998-99 in ITA no.159(Asr)/2003. The assessee has raised following grounds of appeal:
"1. That on the facts and in the circumstances of the case, the ld. CIT(A), has erred in holding that appellant was not carrying lease business and thus could not give vehicles on lease during the assessment year under appeal and this finding is not based on any material brought on record. The CIT(A) has merely relied upon the finding given in the earlier year in the case of sister concerns.
2. That on the facts and in the circumstances of the case, the ld. CIT(A), has erred in sustaining the disallowance of Rs.30,96,955/- in respect of depreciation on vehicle given on lease during the year under appeal on the same set of material and documents which had been executed in earlier years when depreciation has been allowed in the past. Reliance on decision of earlier years without appreciating the submissions made was not justified.
3. That on the facts and in the circumstances of the case, the appellant fulfilled the requirement of section 32 of the Act and had rightly claimed depreciation on lease assets.
4. That on the facts and in the circumstances of the case of Ld. CIT(A) has erred in sustaining the disallowance of Rs.40,000 in respect of proposed enhancement of capital through public issue which did not materialize."19
12. Grounds No. 1 to 3 relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case amounting to Rs.30,96,955/-. Since the issue in the present appeal in grounds No.1,2 & 3 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd. (supra) is identically applicable in the present appeal. Accordingly grounds No. 1, 2 & 3 of the assessee are allowed.
13. As regards ground No.4, the same is not pressed by the ld. counsel for the assessee and accordingly the same is dismissed as not pressed/withdrawn. Thus, the appeal of the assessee in ITA No.159(Asr)/03 is partly allowed.
14. Now, we take up appeal of the assessee in ITA No.115(Asr)/2000 for the assessment year 1996-97 in the case of M/s. The Reliable Agro Engg. Service P. Ltd. Jalandhar, where the assessee has raised following grounds of appeal:
20
"1. That on the facts and in the circumstances of the case, the ld. CIT(A), has erred in holding that appellant was not carrying lease business and thus could not give vehicles on lease during the assessment year under appeal and this finding is not based on any material brought on record.
2. That on the facts and in the circumstances of the case, the ld. CIT(A), has erred in sustaining the disallowance of depreciation on vehicle given on lease during the year under appeal on the same set of material and documents which had been executed in earlier years when depreciation has been allowed in the past. Reliance on decision of earlier years without appreciating the submissions made was not justified.
3. That on the facts and in the circumstances of the case, the appellant fulfilled the requirement of section 32 of the Act and had rightly claimed depreciation on lease assets.
4. That the Ld. CIT(A), ought to have appreciate that bifurcation of lease rent into interest component and return of capital had been given in view of findings of CIT(Appeals), in the case of PKF Finance Ltd. in the immediate earlier year.
5. That on the facts and in the circumstances of the case of Ld. CIT(A) is not justified in holding that some of customers did not exist and no further evidence was furnished and thus denying the benefit of deduction of part return of capital out of lease rent.
6. That on the facts and in the circumstances of the case of Ld. CIT(A) is not justified in sustaining the disallowance of Rs.15,000 from out of car expenses and depreciation on account of personal use by the directors.
15. Grounds No. 1 to 5 relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was 21 disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No.1to 5 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 1 to 5 of the assessee are allowed.
16. As regards ground No.6, the same is not pressed by the ld. counsel for the assessee and accordingly the same is dismissed as not pressed/withdrawn. Thus, the appeal of the assessee in ITA No.115(Asr)/2000 is partly allowed.
17. Now, we take up the appeal of the assessee in ITA No.286/Asr/-2009 for the A.Y. 1997-98 in the case of M/s. Libra Capital (P) Ltd. now Libra Automobiles Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the Ld. CIT(A) has erred in sustaining the action of the A.O. for initiating proceedings u/s 147 for reopening of assessment.
2. That there was no justification for reopening of assessment the case in the said circumstances.
3. That the Ld. CIT(A) has erred in ignoring jurisdictional Hon'ble High Court judgment supplemented by Hon'ble 22 Supreme Court. He has erred in holding that the A.O. was justified in considering issues other than the matters connected with alleged re-opening of assessment.
4. That the appellant was justified in claiming higher rate of depreciation by fulfilling the requisite conditions.
5. That at any rate the matter of allowing depreciation at higher rate of 40% should have been considered properly by appreciating the facts and circumstances of the case and judgments of various Hon'ble courts.
6. That the Ld. CIT(A) has erred in sustaining the action of the A.O. in disallowing depreciation on the vehicles leased out to various parties in the year under consideration.
7. That rejection of claim of depreciation of Rs.11,47,728/- was wrong in law and facts of the case without rebuttal of ownership in law.
8. That there was no justification in disallowing depreciation on vehicles which were purchased during the year.
9. That facts mentioned in orders passed by the authorities below are contested.
10. That there was no justification in disallowing depreciation in regard to the assets acquired/leased during the yea.
11. That the depreciation on such assets should have been allowed in full under law.
12. That at any rate, without admitting the plea of the department the income shown from lease should have been adjudicated.
13. That the observations made by the ld. CIT(A) on various points are challenge.
14. That the ld. AO should have passed the speaking order in regard to the interest u/s 234A, 234B and 234C. No such interest was chargeable under law.
15. That the order is against law and facts of the case.
16. Any other ground pressed at the time of hearing with the kind permission."
18. As regard grounds No.1 to 3, 13, 15 & 16, the same are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
23
19. Grounds No. 4 to 12, the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 4 to 12 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 4 to 12 of the assessee are allowed.
20. Ground No.14, relates to charging of interest under section 234A, 234B & 234C of the Act. The same is mandatory and consequential in nature . Accordingly, the appeal of the assessee in ITA No.286(Asr)/2009 is partly allowed.
21. Now, we take up the appeal of the assessee in ITA No.287/Asr/-2009 for the A.Y. 1998-99 in the case of M/s. Libra Capital (P) Ltd. now Libra Automobiles Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
24
"1. That the Ld. CIT(A) has erred in sustaining the action of the A.O. for initiating proceedings u/s 147 for reopening of assessment.
2. That there was no justification for reopening of assessment the case in the said circumstances.
3. That the Ld. CIT(A) has erred in ignoring jurisdictional Hon'ble High Court judgment supplemented by Hon'ble Supreme Court. He has erred in holding that the A.O. was justified in considering issues other than the matters connected with alleged re-opening of assessment.
4. That the appellant was justified in claiming higher rate of depreciation by fulfilling the requisite conditions.
5. That at any rate the matter of allowing depreciation at higher rate of 40% should have been considered properly by appreciating the facts and circumstances of the case and judgments of various Hon'ble courts.
6. That the Ld. CIT(A) has erred in sustaining the action of the A.O. in disallowing depreciation on the vehicles leased out to various parties in the year under consideration.
7. That rejection of claim of depreciation of Rs.18,23,133/- was wrong in law and facts of the case without rebuttal of ownership in law.
8. That there was no justification in disallowing depreciation on vehicles which were purchased during the year.
9. That the calculation of capital/principal recovery has wrongly been taken into consideration.
10.That facts mentioned in orders passed by the authorities below are contested.
11.That there was no justification in disallowing depreciation in regard to the assets acquired/leased during the yea.
12.That the depreciation on such assets should have been allowed in full under law.
13.That at any rate, without admitting the plea of the department the income shown from lease should have been adjudicated.
14.That the observations made by the ld. CIT(A) on various points are challenged.
15.That the ld. AO should have passed the speaking order in regard to the interest u/s 234A, 234B and 234C. No such interest was chargeable under law.25
16.That the order is against law and facts of the case.
17.Any other ground pressed at the time of hearing with the kind permission."
22. As regard grounds No.1 to 3, the same are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
23. Grounds No. 4 to 13, the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 4 to 13 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 4 to 13 of the assessee are allowed.
24. Ground Nos. 14, 16 & 17 are general in nature and therefore, do no require any adjudication.
25.. Ground No.15, relates to charging of interest under section 234A, 234B & 234C of the Act. The same is mandatory and consequential in 26 nature . Accordingly, the appeal of the assessee in ITA No.287(Asr)/2009 is partly allowed.
26. Now, we take up the appeal of the assessee in ITA No.288/Asr/-2009 for the A.Y. 1999-2000 in the case of M/s. Libra Capitla (P) Ltd. now Libra Automobiles Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the Ld. CIT(A) has erred in sustaining the action of the A.O. for initiating proceedings u/s 147 for reopening of assessment.
2 That there was no justification for reopening of assessment the case in the said circumstances.
3 That the Ld. CIT(A) has erred in ignoring jurisdictional Hon'ble High Court judgment supplemented by Hon'ble Supreme Court. He has erred in holding that the A.O. was justified in considering issues other than the matters connected with alleged re- opening of assessment.
4 That the appellant was justified in claiming higher rate of depreciation by fulfilling the requisite conditions. 5 That at any rate the matter of allowing depreciation at higher rate of 40% should have been considered properly by appreciating the facts and circumstances of the case and judgments of various Hon'ble courts.
6 That the Ld. CIT(A) has erred in sustaining the action of the A.O. in disallowing depreciation on the vehicles leased out to various parties in the year under consideration.
7 That rejection of claim of depreciation of Rs.11,47,728/- was wrong in law and facts of the case without rebuttal of ownership in law.
8 That there was no justification in disallowing depreciation on vehicles which were purchased during the year. 9 That facts mentioned in orders passed by the authorities below are contested.27
10 That there was no justification in disallowing depreciation in regard to the assets acquired/leased during the yea. 11 That the depreciation on such assets should have been allowed in full under law.
12 That at any rate, without admitting the plea of the department the income shown from lease should have been adjudicated. 13 That the observations made by the ld. CIT(A) on various points are challenge.
14 That the ld. AO should have passed the speaking order in regard to the interest u/s 234A, 234B and 234C. No such interest was chargeable under law.
15 That the order is against law and facts of the case. 16 Any other ground pressed at the time of hearing with the kind permission."
27. As regard grounds No.1 to 3 the same are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
28. Grounds No. 4 to 12, the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 4 to 12 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision 28 in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 4 to 12 of the assessee are allowed.
29. Ground Nos. 13, 15 & 16 are general in nature and therefore, do no require any adjudication.
30. Ground No.14, relates to charging of interest under section 234A, 234B & 234C of the Act. The same is mandatory and consequential in nature . Accordingly, the appeal of the assessee in ITA No.288(Asr)/2009 is partly allowed.
31. Now, we take up the appeal of the assessee in ITA No.385(Asr)/2004 for the assessment year 1997-98 in the case of M/s/ Libira Auto & General Finance Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the learned CIT(A) has gone wrong in holding that the appellant company was not the owner of leased vehicles and as such was not entitled to claim of depreciation.
2. That the learned CIT(A) has erred in holding that the learned counsel of the appellant had admitted that the appellant company was not the owner of vehicles. The learned CIT(A) should appreciate that mere mentioned of name of the lessee on invoice would not make him owner of the vehicles when name of lessor has been clearly exhibited on the invoice.29
3. That the authority below had illegally held that the appellant company was not carrying out lease business.
4. That undertaking of finance business would not debar the appellant company to undertake the lease business. That reliance of M/s.
Sundram Finance case was totally misplaced and illogical.
5. That the learned CIT(A) has failed to consider that Cargo Motors Ltd.
and Dada Motors Ltd. issued the sale vouchers in the name of respective customers on the directions of the appellant company and as such mere issue of invoice would not make the lessee owner of the vehicles.
6. That the authority below has further failed to consider that legal concept of lessor and lessee which was not rebutted by the learned Assessing Officer and as such the documents indicating the relationship of lessor and the lessee should not be ignored. The lessee should not have been treated as owner of vehicles in view of his status. The facts and circumstances of PKF Finance Ltd. should not have been applied in the case of appellant company.
7. That the learned CIT(A) has quoted various case laws which were not relevant to the case.30
8. That the authority below has gone wrong in not allowing depreciation on account of the fact that the appellant company had failed to prove two basic conditions i.e. ownership of the vehicles and utilization of the vehicles for business purposes. The allegation is totally baseless and erroneous.
9. That there was no iota of evidence available which could rebut the claim of appellant company as owner of the vehicles.
10.That the learned CIT(A) has erred in confirming the addition of Rs.
30,120/- in Fee & Taxes account without any justification.
11.That enhancement of income to the tune of Rs. 31,23,666/- made by the learned CIT(A) is wrong, illegal and erroneous.
12.That facts and circumstances of the case have not been properly considered.
13.That submissions made by the appellant should have been properly appreciated.
14.That there is no legal justification and authorization on the facts and in the circumstances of the case to enhance the income of appellant company by Rs. 31,23,666/-. The depreciation has wrongly been allowed @ 25% instead of 40%.31
15.That the facts and observations made in the whole order of CIT(A) are challenged.
16.That order is against law and facts of the case.
17.Any other grounds pressed at the time of hearing."
32. As regard grounds No.10 the same is not pressed by the ld. counsel for the assessee and accordingly the same is dismissed as not pressed/withdrawn.
33. Grounds No. 1 to 9, 11 and 14, the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 1 to 9 & 14 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 1 to 9, 11 & 14 of the assessee are allowed.
32
34. Ground Nos. 12, 13, 15,16 & 17 are general in nature and therefore, do no require any adjudication.. Accordingly, the appeal of the assessee in ITA No.385(Asr)/2004 is partly allowed.
35. Now, we take up the appeal of the assessee in ITA No.140(Asr)/2011 for the assessment year 2004-05 in the case of M/s/ Libira Auto & General Finance Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the learned CIT(A) has wrongly upheld the assessment order passed by A.O. u/s 144 of the Income Tax Act.
2 That the learned CIT(A) has wrongly confirmed the addition of Rs.
2,08,770/- on account of depreciation on leased vehicles.
3 That while determining the leased income the learned CIT(A) has gone wrong in not allowing the alleged capital recover, which was allowed in the past.
4 That the addition of Rs. 2,84,117/- on account of bad debts has wrongly been sustained without any justification.
5 That the addition of Rs. 5,00,000/- on account of office repair and maintenance has wrongly been confirmed.33
6 That the synopsis filed by the appellant should have been considered in proper context.
7 That there is no justification for confirming the aforesaid additions.
8 That proper opportunity should have been allowed.
9 That the order is against law and facts of the case.
10 Any other ground pressed at the time of hearing.
36. As regard grounds No.1, 3, 4 & 5, the same are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
37. Grounds No. 2(a) & (b), the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 2(a) & (b) is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 2(a) & (b) of the assessee are allowed.
34
38. Ground Nos. 6, 7, 8 & 9 are general in nature and therefore, do no require any adjudication.. Accordingly, the appeal of the assessee in ITA No.140(Asr)/2011 is partly allowed.
39. Now, we take up the appeal of the assessee in ITA No.73(Asr)/2004 for the assessment year 1999-2000 in the case of M/s/ Libira Auto & General Finance Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the learned CIT(A) has erred in disallowing the claim of depreciation to the tune of Rs. 2,76,59,115/- without any justification.
a. That the learned CIT(A) has not passed speaking order while disallowing the depreciation.
b. That facts and circumstances of the case have not been properly appreciated.
c. That claim of depreciation for this year should have been taken into consideration independently.
d. That the explanations and judgments quoted by the appellant should not have been ignored.
2. That add back of Rs. 6,10,709/- on account of bad doubtful debts have wrongly been confirmed.
(a) That the nature of the claim should have been taken into consideration. Mere the word "Provision" would not be make the claim admissible.35
(b) That the guidelines and norms of Reserve Bank of Indian should have been properly interpreted.
3 That the addition of Rs. 25,000/- on account of festival expenses should not have been sustained.
4 That the interest charged by the A.O. has wrongly been sustained. 5 That the order is against law and facts of the case. 6 Any other ground pressed at the time of hearing."
40. As regard grounds No. 2(a), (b) & 3, the same are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
41. Grounds No. 1 (a), (b), (c) & (d), the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 1(a),
(b),(c) & (d) is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by 36 us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 1 (a), (b), (c) & (d) of the assessee are allowed.
42. Ground Nos. 4, 5 & 6 are general in nature and therefore, do no require any adjudication.. Accordingly, the appeal of the assessee in ITA No.73(Asr)/2004 is partly allowed.
43. Now, we take up the appeal of the assessee in ITA No.329(Asr)/2002 for the assessment year 1995-96 in the case of M/s/ Libira Finance & Carriers (P) Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That learned CIT(A) has erred in enhancing the income of appellant by Rs. 20,65,144/-.
2. That there was no justification in enhancing the income.
3. That learned CIT(A) was not authorized to enhance the income in the circumstances of the case and in the absence of any evidence.
4. That there is no justification in restricting the depreciation @ 25% as against 40% claimed by the appellant.
5. That it is wrong to hold that assessee was not running trucks for carry on goods on hire.
6. That case law quoted by the appellant should have been considered properly.37
7. That the addition of Rs. 28,800/- has wrongly been confirmed on account of Car and scooter maintenance expenses.
8. That there is no justification in sustaining the addition of Rs. 5,000/-
under the head rebate & discount.
9. That grounds regarding depreciation/unabsorbed depreciation and opportunity should have been properly disposed off.
10.That order is against law and facts of the case.
11.Any other ground pressed at the time of hearing."
44. As regard grounds No. 7 & 8, the same are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
45. Grounds No. 1 to 6 , the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 1 to 6 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the 38 assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 1 to 6 of the assessee are allowed.
46. Ground Nos. 9, 10 & 11 are general in nature and therefore, do no require any adjudication.. Accordingly, the appeal of the assessee in ITA No.329(Asr)/2002 is partly allowed.
47. Now, we take up the appeal of the assessee in ITA No.130(Asr)/2003 for the assessment year 1996-97 in the case of M/s/ Libira Finance & Carriers (P) Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the learned CIT(A) has erred in sustaining the action of the learned A.O. for initiating proceedings u/s 147 for reopening of assessment.
2. That there was no justification for reopening of the case in these circumstances.
3. That the learned CIT(A) has erred in ignoring jurisdictional High Court judgment supplemented by Supreme Court judgment. He has erred in holding that the A.O. was justified in considering other issues than the matters connected with the alleged reopening of assessment.
4. That the appellant was justified in claiming higher rate of depreciation by fulfilling all the conditions.39
5. That any rate of matter of allowed depreciation at higher rate of 40% should have been considered properly by appreciating the facts and circumstances of the case and judgments by various courts.
6. That the learned CIT(A) has erred in sustaining action of learned A.O. in disallowing depreciation on the vehicles leased out to various parties in this year.
7. That disallowance of Rs. 1,16,81,806/-/- as depreciation was wrong in law and facts of the case without legal rebuttal of ownership.
8. That there was no justification in disallowing depreciation even in the cases in which vehicles were purchased during the year.
9. That facts mentioned in the order passed by authority below are wrong and contested.
10. That there was no justification in disallowing depreciation in regard to the assets acquired during the year.
11. That the depreciation on such assets should have been allowed in full.
12. That at any rate without admitting the plea of the department the income shown from lease should have been deducted.
13. That it is wrong to hold that the position regarding unabsorbed depreciation was not explained.
14. That the observations on various points made by the learned CIT(A) are challenged
15. That the assessing officer should have passed the speaking order in regard to the interest under section 234A, 234B and 234C. No interest was chargeable.
16. That order is against law and facts of the case.
17. Any other ground passed at the time of hearing."40
48. Grounds No. 1 to 3 are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
49. As regards grounds No. 4 to 13 , the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 4 to 13 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 4 to 13 of the assessee are allowed.
50. Ground Nos. 14, 16 & 17 are general in nature and therefore, do no require any adjudication.
51. Ground No.15, relates to charging of interest under sections 234A, 234B & 234C of the Act. The same is mandatory and consequential in nature . Accordingly, the appeal of the assessee in ITA No.130(Asr)/2003 is partly allowed.
41
52. Now, we take up the appeal of the assessee in ITA No.129(Asr)/2003 for the assessment year 1997-98 in the case of M/s/ Libira Finance & Carriers (P) Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That the learned CIT(A) has erred in sustaining the action of the learned A.O. for initiating proceedings u/s 147 for reopening of assessment.
2. That there was no justification for reopening of the case in these circumstances.
3. That the learned CIT(A) has erred in ignoring jurisdictional High Court judgment supplemented by Supreme Court judgment. He has erred in holding that the A.O. was justified in considering other issues than the matters connected with the alleged reopening of assessment.
4. That the appellant was justified in claiming higher rate of depreciation by fulfilling all the conditions.
5. That any rate of matter of allowed depreciation at higher rate of 40% should have been considered properly by appreciating the facts and circumstances of the case and judgments by various courts.
6. That the learned CIT(A) has erred in sustaining action of learned A.O. in disallowing depreciation on the vehicles leased out to various parties in this year.
7. That disallowance of Rs. 1,16,81,806/-/- as depreciation was wrong in law and facts of the case without legal rebuttal of ownership.
8. That there was no justification in disallowing depreciation even in the cases in which vehicles were purchased during the year.42
9. That facts mentioned in the order passed by authority below are wrong and contested.
10. That there was no justification in disallowing depreciation in regard to the assets acquired during the year.
11. That the depreciation on such assets should have been allowed in full.
12. That at any rate without admitting the plea of the department the income shown from lease should have been deducted.
13. That it is wrong to hold that the position regarding unabsorbed depreciation was not explained.
14. That the observations on various points made by the learned CIT(A) are challenged
15. That the assessing officer should have passed the speaking order in regard to the interest under section 234A, 234B and 234C. No interest was chargeable.
16. That order is against law and facts of the case.
17. Any other ground passed at the time of hearing."
53. Grounds No. 1 to 3 are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
54. As regards grounds No. 4 to 13 , the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the 43 present case. Since the issue in the present appeal in grounds No. 4 to 13 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 4 to 13 of the assessee are allowed.
55. Ground Nos. 14, 16 & 17 are general in nature and therefore, do no require any adjudication.
56. Ground No.15, relates to charging of interest under sections 234A, 234B & 234C of the Act. The same is mandatory and consequential in nature . Accordingly, the appeal of the assessee in ITA No.129(Asr)/2003 is partly allowed.
57. Now, we take up appeal of the Revenue in ITA No.119(Asr)/2002 for the assessment year 1998-99, in the case of Libra Finance & Carriers (P) Ltd; Jalandhar, where the revenue has raised following grounds of appeal:
"1. That learned CIT(A) was not justified in allowing the claim of depreciation on so called leased vehicles.
2. That the learned CIT(A) has erred in holding that such claim was being allowed to the assessee in earlier years whereas the additions on similar ground had been made in the assessment year 1996-97 & 1997-98.44
3. That it is prayed that the order of the learned CIT(A) be set- aside and that of the Assessing Officer be restored.
4. That the appellant requests for leave to add or amend or alter the grounds of appeal is heard and disposed off."
58. The facts in the grounds of the revenue are identical as decided by us in the case M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 for the assessment year 1997-98. Accordingly, the learned CIT(A) has allowed the claim of the assessee. We also find no infirmity in the order of the ld. CIT(A) and accordingly, the appeal of the revenue in ITA No.119(Asr)/2002 is dismissed.
59. Now, we take up the appeal of the assessee in ITA No.289(Asr)/2009 for the assessment year 2001-02 in the case of M/s/ Libira Finance & Carriers (P) Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. (a) That the learned CIT(A) has erred in sustaining the action of the learned A.O. for initiating proceedings u/s 147 for reopening of assessment.
(b) That there was no justification for reopening of the case in these circumstances.
2. That the learned CIT(A) has erred in ignoring jurisdictional High Court judgment supplemented by Supreme Court. He has erred in holding that the A.O. was justified in considering other issues than the matters connected with the alleged reopening of assessment.45
3. (a) That the appellant was justified in claiming higher rate of depreciation by fulfilling all the conditions.
(b) That any rate of matter of allowed depreciation at higher rate of 40% should have been considered properly by appreciating the facts and circumstances of the case and judgments by various courts. )
4. That disallowance of Rs. 2,42,25,419/- as depreciation was wrong in law and facts of the case without legal rebuttal of ownership.
4. (a) That capital/Principal recovered from lease rental income amounting to Rs. 2,42,25,419/- is challenged.
5. That the learned CIT(A) has erred in sustaining action of learned A.O. in disallowing depreciation on the vehicles leased out to various parties in this year.
6. That there was no justification in disallowing depreciation in the cases in which vehicles were purchased during the year.
7. That facts mentioned in the order passed by authority below are wrong and contested.
8. That there was no justification in disallowing depreciation in regard to the assets acquired during the year.
9. That the depreciation on such assets should have been allowed in full.
10. That at any rate without admitting the plea of the department the income shown from lease should have been determined.
11. That the observation regarding unabsorbed depreciation is contested.
12. That the findings on various points made by the learned CIT(a) are challenged legally and factually.
46
13. That the assessing officer should have passed the speaking order in regard to the interest under section 234A, 234B and 234C. No interest was chargeable.
14. That the action of the learned CIT(A) in regard to interest u/s 234A, 234B and 234C was wrong in law.
15. That order is against law and facts of the case.
16. Any other ground passed at the time of hearing."
60. Grounds No. 1(a), (b) to 2 are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
61. As regards grounds No. 3 to 11 , the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 3 to 11 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd (supra) is identically applicable in the present appeal. Accordingly grounds No. 3 to 11 of the assessee are allowed.
47
62. Ground Nos. 12, 15 & 16 are general in nature and therefore, do no require any adjudication.
63. Ground No.13 & 14, relate to charging of interest under sections 234A, 234B & 234C of the Act. The same is mandatory and consequential in nature . Accordingly, the appeal of the assessee in ITA No.289(Asr)/2009 is partly allowed.
64. Now, we take up the appeal of the assessee in ITA No.309(Asr)/2011 for the assessment year 2002-03 in the case of M/s/ Libira Finance & Carriers (P) Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That learned CIT(A) has wrongly confirmed the A.O.'s assessment order passed u/s 144 of Income Tax Act, 1961 is challenged.
2.a. That the appellant was justified in claiming higher rate of deprecation by fulfilling all the conditions.
(b) That at any rate the matter of allowing depreciation @ 40% should have been considered properly by appreciating the facts and circumstances of the case.
3. That disallowance of Rs. 14,90,009/- was wrong in law and facts of the case without any legal rebuttal of ownership.
4. That capital/principal recovered from lease rental income amounting to Ra. 1,50,00,000/- is challenged.48
5. That the learned CIT(A) has erred in sustaining action of the A.O. in disallowing the depreciation on the vehicles leased out to various parties in this year.
6. That facts mentioned in order passed by the authority below were wrong and contested.
7. That there was no justification in disallowing depreciation in regard to assets required/leased during the year.
8. That depreciation on such assets should have been allowed.
9. That the authority below has no justification in confirming the administrative expenses amounting to Rs. 5,00,000/-
10. That the income returned by the appellant should have been determined.
11. That the written submission should have been considered in proper context.
12. That proper opportunity should have been allowed.
13. That the order is against law and facts of the case.
14. Any other ground pressed at the time of hearing."
65. Grounds No. 1 & 9 are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
66. As regards grounds No. 2 to 8, the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO 49 was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 2 to 8 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd. (supra) is identically applicable in the present appeal. Accordingly grounds No. 2 to 8 of the assessee are allowed.
67. Ground Nos. 10 to 14 are general in nature and therefore, do no require any adjudication. Accordingly, the appeal of the assessee in ITA No.309(Asr)/2011 is partly allowed.
68. Now we take up the appeal of the assessee in ITA No.484(Asr)/2010 for the assessment year 2005-06 in the case of M/s. Libra Finance & Carriers Pvt. Ltd. Jalandhar, where the assessee has raised following grounds of appeal:
"A. Disallowance of Rs. 25,24,787/- of Insurance Charges of Vehicles.
1. That the learned CIT(Appeals) have erred in law by summarily rejecting the Appeal for deleting the disallowance of Insurance Charges by not passing Speaking Order without considering the facts of the case and by merely stating in its Order that Grounds No. 2,3,6,7 and 8 of Appeal are therefore rejected.
2. That the Learned CIT(Appeals) have further erred in Law by disallowing the appeal for claim of Insurance Expenses of Rs. 25,24,787/- on the analogy that the Assets are not owned by the Appellant by equating the same with the Depreciation Allowance which is allowable to the owner of the Asset whereas for claiming 50 Insurance Expenses irrespective of ownership the Asset should have been used for the purpose of Business.
3. That the learned CIT(Appeals) further erred in appreciating the facts such as Insurance cover notes in the name of the Appellant, the payment of insurance having been made by the Appellant by issuing account payee cheques, Hire Purchase Agreements of the Appellant with other Financiers and the fact that the motive of the Lesser to protect its Customers base from going to other Financers and to protect its money invested in the vehicles which will earn back the income to it and which clearly shows that insurance expenses have been incurred by the Appellant for its Business and keeping in mind the commercial expediency.
B. Addition of Rs. 2,61,000/- on Account of Payment of HRA to Managing Director
1. That the Addition of Rs. 2,61,000 made by the Learned Assessing Officer is not correct in facts as the case have not been properly argued at Assessing Officer's stage as well as at Learned CIT(Appeals) stage by the Authorized Representative of the Appellant by explaining the office rent as HRA whereas the amount paid is Office Rent and has been reflected in the Profit & Loss Account as House Rent and not as a part of Salary paid as well as the Form No. 16 also substantiate the TDS made @ 20% u/s 194 J of the Act.
2. That the fact of the case that in the previous year also the Office Rent shown as such in Profit & Loss Account and backed by the TDS Certificate in Form No. 16A have been allowed as an expenses by the Department have been ignored and therefore, the disallowance is not justified.
C. Disallowance of Rs. 2,04,91,753/- of Depreciation claimed on Leased Vehicles.
1. The learned CIT(Appeals) erred in Law by not deleting the disallowance of Depreciation of Rs. 2,04,91,753/- made by 51 the Learned ACIT Range-IV, Jalandhar, ignoring the facts of the Case that the Assets are owned by the Appellant and used for Business and that the Provision of Law as on date were fulfilled by the Appellant.
2. The learned CIT(Appeals) further erred in passing the Order rejecting the Appeal making base the facts the cases of PKF Group as the deciding factor whereas the facts of the Appellant's case and the Law in force as on date, should have been considered by the Learned CIT(Appeals) while passing the Order. None of the facts such as the Registration Certificates, Insurance Cover Notes and the copies of the Hire purchase agreements of the Appellant with other Financiers and Lease Agreements etc. have been considered and deliberated upon by the Learned CIT(Appeals) in its Order rejecting the Appeal and no speaking order have been passed whereas the Appellant have raised this specific Ground of Appeal as Appeal No. 7(a).
3. The Learned CIT(Appeals) further erred in Law and Facts to appreciate that the Assessing Officer also have not passed speaking order as during the course of Assessment he have not at all perused these documents regarding ownership of vehicles and nowhere mentioned in his Order about so and also nowhere noted in his order denying that these documents does not prove the ownership of the Vehicles by the Appellant.
4. The Learned CIT(Appeals) further erred in Law by not at all commenting upon in its Order on any of the ratios are not applicable in the case whereas these ratios substantiates the claim of the Appellant and therefore the Order is bad in Law.
D. The Learned CIT (Appeals) erred in Law as the Ground of Appeals numbering 2,3,4,7 and 8 have been summarily rejected without speaking any word of them in its Order. So order is bad in law as the learned CIT(Appeals) is required to pass the speaking Order after considering the Grounds of Appeal.52
E. Prayer to amend Grounds of Appeal.
1. The appellant craves leave to amend, alter or delete any of the above Grounds of Appeal at time of hearing by Your Honour.
69. Grounds No. 'D' & 'E' are general in nature, therefore, do not require any adjudication.
70. As regards ground No. 'A', the brief facts as arising from the order of the A.O. at page 2 para 4 are reproduced for the sake of convenience as under:
"4. The assessee has claimed depreciation on leased vehicles amounting to Rs. 2,04,91,753/-. During assessment proceeding the assessee was asked to explain why the claim of depreciation on leased vehicles may not be disallowed as has been done in the past years also. In response the assessee has stated as under:
"It is submitted that the depreciation was claimed as the vehicles were owned by us. The registration certificates of leased vehicles were in our name. The Insurance was also in our name. It is wrong to hold that the same were not owned by us as owner the vehicles were purchased and registered in our name as such these were owned by us. The depreciation may kindly be allowed under the law. In the past the depreciation was not allowed by the department which was disputed in the appeal".
However, since in a similar case i.e. of M/s PKF Group of Companies, disallowance of depreciation on lease vehicles was made and the same has been confirmed by the CIT Appeal, Jalandhar and the Hon'ble I.T.A.T., Amritsar as also the disallowance made in the 53 case of the assessee in earlier years has been upheld by the Appellate Authorities, the claim of the assessee as stated above is rejected and depreciation claimed on leased vehicles is disallowed. On the same analogy claim of insurance on leased vehicles amounting to Rs. 25,24,787/- is disallowed . Penalty proceedings un/s 271(1)(c) for claim of wrong depreciation and Insurance on lease Vehicles have been initiated separately."
71. The Ld. CIT(A) confirmed the action of the Assessing Officer.
72. We have heard the rival contentions and perused the facts of the case. In the present case, Insurance claim was disallowed solely for the reasons that in a similar case i.e. M/s. PKF Group of Companies, disallowance of depreciation on leased vehicles was made and the same has been confirmed by the ld. CIT(A) and the ITAT, Amritsar Bench, Amritsar and depreciation on leased vehicles was disallowed. The AO has clearly mentioned in his order as reproduced hereinabove that on the same analogy claim of Insurance of leased vehicles amounting to Rs.25,24,787/- is disallowed. But the fact in the present case is that once the issue of vehicles leased by the assessee have been held to be assets of assessee by the Jurisdictional High Court of Punjab & Haryana in the case of M/s. PKF Finance Ltd. vs. CIT in ITA No.158 of 2002 (O&M) dated 13.05.2013 referred to in the appeal of M/s. PKF Finanace Limited vs. ACIT, R-III, Jalandhar, in ITA No.159(Asr)/2003 and in ground No.'C' hereinbelow, where the Hon'ble Jurisdictional High Court has held that vehicles leased by the assessee are 54 the assets of the assessee used during the course of its business and thus, entitled to depreciation u/s 32 of the Act. Accordingly, first question of law was answered in favour of the assessee and against the Revenue in the said appeal in ITA No.158 of 2002 in its order dated 13.05.2013 by the Hon'ble Punjab & Haryana High Court referred hereinabove. Therefore, on the same analogy, as claimed by the A.O., the Insurance on these vehicles has to be allowed as an expense as claimed by the assessee. Accordingly, the order of the ld. CIT(A) is reversed and the A.O. is directed to allow the claim of the assessee. Thus, ground No. 'A' of the assessee is allowed.
73. As regards ground No. 'B' with regard to addition of Rs.2,61,000/- on account of payment of HRA to Managing Director, the brief facts are that as per AO's order in para 5 at page 2 & 3 which are reproduced for the sake of convenience as under:
"The Assessee has filed particulars of payments made to persons specified u/s 40 A(2)(b) of the income Tax Act for the year ending on 31.03.2005. As per this, the payments made are as under:-
Salary Paid to Smt. Amarpal Kaur (Director) :150000.00 Sh. Manreet Singh (Managing Director) :495000.00 H.R.A. Paid to Smt. Amarpal Kaur :30000.00 55 Sh. Manreet Singh (Managing Director) :360000.00 From the above it is evident that the assessee has made excessive payment of house rent allowance to Sh. Manreet Singh, its Managing Director. The payment of house rent allowance and dearness allowance is of compensatory nature and is always made at some fixed percentage and not at the whims of the assessee. The payment made to Smt. Amarpal Kaur is 20% of the salary which appears to be reasonable. 20% of salary of Sh. Manreet Singh comes to Rs. 99000/-. The excessive payment of Rs. 261000/- paid to Sh. Manreet Singh as H.R.A. is disallowed under the provision of section 40A(2)(b) of the I.T. Act. Penalty proceedings u/s 271(1)(c) of the Act for claim of excessive HRA have been initiated separately."
74. The Ld. CIT(A) confirmed the action of the Assessing Officer.
75. We have heard the rival contentions and perused the facts of the case. In the present case, the AO has considered Rs.2,61,000/- as excessive payment paid to Sh. Manreet Singh, Managing Director of the Company as HRA and disallowed under section 40A(2)(b) of the I.T.Act. The arguments made by the ld. counsel for the assessee, Mr. J.S.Bhasin, Advocate, is found to be convincing since M.D. is wholly responsible for looking after financial affairs and all other affairs of the company. The salary package paid was reasonable as compared to the package offered in next year. The A.O. has not brought on record fair market value of services rendered by a person in the similar set of facts and circumstances in the present case and has reached to a conclusion that salary/remuneration paid to Sh. Manreet Singh 56 is excessive. Therefore, in the absence of any material on record against the assessee and in the absence of any fair market value which can prove that remuneration paid is excessive to Sh. Manreet Singh and in view of the decisions relied upon by the ld. counsel for the assessee available at page 3 of CIT(A)'s order, we are of the view that the AO is not justified in disallowing the claim of the assessee. The order of the ld. CIT(A) is, therefore, directed to be reversed and the A.O. is directed to allow the claim of the assessee. Thus, ground 'B' of the assessee is allowed. 75-A. As regarding ground No. 'C', the same relates to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 2 to 8 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd. (supra) is identically applicable in the present appeal. Hence, Ground No. 57 'C' of the assessee is allowed. Accordingly, the appeal of the assessee in ITA No.484(Asr)/2010 for the A.Y. 2005-06 is allowed.
76. Now, we take up the appeal of the Revenue in ITA No.40(Asr)/2012 for the assessment year 2004-05 in the case of M/s. Libra Finance & Carriers (P) Ltd. Jalandhar, where the assessee has raised following grounds of appeal:-
"1. That on the facts and in the circumstances or the case the learned Commissioner of Income Tax (Appeals) has erred in allowing relief in respect of capital portion of the leased rental receipts amounting to Rs. 73,00,000/-
2. While allowing the relief in respect of the capital portion of the leased Rental receipts, learned CIT(A) has failed to appreciate that the assessment in this case was framed u/s 144 of the Income Tax Act, 1961 and this action of the A.O. has been confirmed by the learned CIT(A)
3. It is prayed that the order of the learned Commissioner of Income Tax (Appeals) be set-aside and that of the Assessing Officer restored.
4. The appellant requests for leave to add or amend or alter the grounds of appeal before the appeal is heard and disposed of."
77. The brief facts in the grounds of the Revenue are that in the order passed under section 144 of the Income Tax Act, 1961 dated 28.12.2006, the assessee has claimed depreciation to the tune of Rs.1,28,01,266/- which was disallowed by the A.O. On appeal, the ld. CIT(A) allowed a relief in respect of capital portion of the leased rental receipts amounting to Rs.73,00,000/-. 58
78. After hearing both the parties, we find that the ld. CIT(A) was justified in allowing aforesaid relief to the assessee. We do not find any infirmity in the order of the ld. CIT(A) and the same is upheld. Accordingly, the grounds raised by the Revenue are dismissed and the appeal of the Revenue in ITA No.40(Asr)/2012 is dismissed.
79. Now, we take up the appeal of the assessee in ITA No.47(Asr)/2012 for the assessment year 2004-05 in the case of M/s/ Libira Finance & Carriers (P) Ltd; Jalandhar, where the assessee has raised following grounds of appeal:
"1. That in the facts and circumstances of the case and the law in force, the learned CIT(A) erred in upholding the framing of impugned assessment u/s 144 by the learned A.O.
2. That in the facts and circumstances of the case the learned CIT (A) was not justified in ignoring the assessee's application filed under rule 46A(1), supported by sworn affidavit of assessee, by making vague observations, thereby denying the benefit of most relevant and cogent 'additional evidence' in the shape of 'books of account', insurance cover notes, ownership evidence of vehicles etc., sought to be relied upon by the assessee, in appellate proceedings.
3. That in the given facts of the case and to dispense justice, the learned CIT(A) ought to have invoked jurisdiction u/s 250(4) to make further investigations of his own, to adjudicate upon the controversies brought before him.
4 That the learned CIT(A) was not justified in taking cognizance of the submissions made by the first counsel, detrimental to assessee, when the services of said counsel were discontinued and 59 substituted by another counsel, well before the closure of appellate proceedings.
5. That the learned CIT(A) grossly erred in confirming the disallowance of Insurance Expenses of Rs. 15,04,000/- by wrongly disbelieving the documentary evidence, more so, when the certified copies of Insurance Cover Notes, placed as additional evidence, were held by him, to be confirmatory of the evidences already filed before the A.O.
6. That while confirming the disallowance of Insurance charges, the learned CIT(A) further erred in doubting the source of its payments, for non-production of Books of Account before the A.O., without confronting the assessee on this standpoint, especially when no such observation was made by the A.O.
7. The learned CIT(A) erred both in law and facts in confirming the disallowance of Depreciation of Rs. 1,28,01,266/- made by the learned A.O. simply swayed by the decision of Hon'ble I.T.A.T. in the case of PKF, when the facts, as brought on record, with documentary evidence, were at total variance with that of the cases of PKF.
8. That while confirming the disallowance of depreciation, the learned CIT(A) grossly erred in misreading the relevant documents, to infer that Operating Lease was no different from Financial lease.
9. The Learned CIT(Appeals) erred in confirming the ad-hoc disallowance of Rs. 5 lacs out of current liabilities, ignoring the Audited Annual Accounts already placed on case file. Even otherwise, there was no basis for such an arbitrary disallowance.
10.That the learned CIT(A) ought to have allowed adequate opportunity to assessee, to explain its stand, on all his doubts which heavily operated against the assessee, while adjudicating the issues in dispute. His failure to do so, vitiates the order under appeal.
11.That the order under appeal is wholly against law and facts of the case and deserves not to be sustained.
12.The Appellant craves leave to amend, alter or delete any of the above Grounds of Appeal at time of hearing by the Hon'ble Bench."60
80. Grounds No. 1, 2, 3, 4 & 9 are not pressed by the ld. counsel for the assessee and accordingly the same are dismissed as not pressed/withdrawn.
81. As regards grounds No. 7 & 8, the same relate to the identical issue as in the case of M/s. Punjab Kashmir Finance P. Ltd; in ITA No. 163(Asr)/2001 with regard to the assessee as claim of vehicles given on lease as the asset of the business of the assessee and the assessee is entitled to depreciation which was disallowed by the A.O. and the action of the AO was confirmed by the ld. CIT(A) except the amount of depreciation in the present case. Since the issue in the present appeal in grounds No. 7 & 8 is identical to the issue in the case of M/s. Punjab Kashmir Pvt. Ltd. in ITA No.163(Asr)/2001 for the assessment year 1997-98 decided by us hereinabove, therefore, our decision in M/s. Punjab Kashmir Pvt. Ltd. (supra) is identically applicable in the present appeal. Accordingly grounds No. 7 & 8 of the assessee are allowed.
82. As regards grounds. No.5 & 6, the AO disallowed the Insurance expenses amounting to Rs.15,04,000/- which action of the A.O. was confirmed by the ld. CIT(A).
83. After hearing both the parties, we are of the view that the facts of the grounds are identical to the facts in assessee's own case for the assessment year 2005-06 in ground (a) in that appeal decided by us in ITA 61 No.484(Asr)/2010 hereinabove in favour of the assessee and A.O. has been directed to allow the claim of Insurance Expenses of Rs.15,04,000/- in that appeal. Since the issue in the present appeal is identical to the grounds of appeal of the assessee for the assessment year 2005-06, therefore, our decision is identically applicable in the present grounds of appeal i.e. ground No. 5 & 6. Accordingly, we allow grounds No. 5 & 6 of the assessee. Accordingly, the appeal of the assessee in ITA No.47(Asr)/2012 is partly allowed.
84. In the result, the appeals of different assessees in ITA No.163(Asr)/01 is allowed and in ITA Nos. 159(Asr)/03, 115(Asr)/2000, 286 to 288(Asr)/2009, 385(Asr)/2004, 140(Asr)/2011, 73(Asr)/2004, 329(Asr)/2002, 130 & 129(Asr)/2003, 289(Asr)/2009, 309(Asr)/2011, 484(Asr)/2012, 47(Asr)/2012 are partly allowed and appeals of Revenue in ITA No.119(Asr)/2002 & 40(Asr)/2012 are dismissed.
Order pronounced in the open court on 17th July, 2013.
Sd/- Sd/-
(H.S. SIDHU) (B.P. JAIN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 17th July, 2013
/RK/
Copy of the order forwarded to:
1. The Assessees:
2. The ACITJt. CIT/DCIT Jalandhar,
3. The CIT(A), Jalandhar.
4. The CIT, Jalandhar 5.The SR DR, I.T.A.T., Asr.