High Court Of Punjab & Haryana
CIT vs. Bank Of Punjab Ltd.
Sections 143(3), 254(1), 260A, ITAT Rule 29
Asst. Year 1996-97
D.K. Jain, C.J. & Surya Kant, J.
IT Appeal Nos. 39 of 2002 and 84 & 301 of 2004
16th January, 2006
Counsel Appeared
D.S. Patwalia, for the Appellant : Ajay Vohra, for the Respondent
JUDGMENT
D.K. Jain, C.J. :
These three appeals, by the Revenue, under s. 260A of the IT Act, 1961 (for short, ‘the Act’) are directed against the orders passed by the Income-tax Appellate Tribunal, Chandigarh Bench (for short, ‘the Tribunal’) in ITA Nos. 340/Chandi/2001; 646/Chandi/2001 and 321/Chandi/2003, pertaining to the asst. yrs. 1996-97 to 1998-99.
2. Since, in substance, the issues raised in all the three appeals are similar, these are being disposed of by this common order. According to the Revenue, the orders of the Tribunal involve the following substantial questions of law : (Questions proposed in appeal for the asst. yr. 1996-97)
“1. Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law to admit additional evidence and granting relief to the assessee on the basis of this evidence in violation of r. 29 of the IT (Appellate Tribunal) Rules, 1963 ?
Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in holding that sufficient opportunity to cross-examine the evidence relied on by the Revenue had not been granted to the assessee ?
Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in not accepting the plea of the Revenue to determine the WDV of the 100 per cent depreciable assets in question according to Expln. 3 of s. 43(6) of the IT Act, 1961 ?”
3. The respondent-assessee is a banking company, incorporated under the Companies Act, 1956. In the return of income for the relevant assessment years, the assessee claimed depreciation on the assets, leased out by it to the Punjab State Electricity Board (for short, ‘PSEB’); Nagpur Alloys Castings Ltd. (for short, ‘NACAST’) and various other concerns. In the case of PSEB and NACAST, the assets in question were purchased by the assessee from them and leased out on lease rental, as per terms of the lease deeds. However, in relation to other concerns, the assets were purchased from third parties and leased out to the lessees. During the course of assessment proceedings for the said assessment years, the AO held doubts about the genuineness of these transactions. After carrying out some enquiries, he found that the assets were either not in existence or the lease arrangements were nothing but pure financing transactions. Confronting the assessee with the material collected by him, the AO came to the conclusion that transactions of leasing out of assets by the assessee to various concerns were sham and colourable device to evade tax. Accordingly, he disallowed assessee’s claim for depreciation on all the leased out assets.
4. Being aggrieved, the assessee preferred appeals to the CIT(A). Before the CIT(A), the assessee furnished voluminous evidence in support of its claim for depreciation. It was pleaded before the CIT(A) that the assessee had not been allowed an opportunity to cross-examine the persons, who had denied having supplied the equipment to the assessee and whose statements had been relied upon by the AO. The CIT(A) furnished the copies of evidence, so adduced by the assessee to the AO for his comments. However, ultimately assessee’s submissions did not find favour with the CIT (A) and accordingly, he dismissed assessee’s appeals. The assessee carried the matter in further appeals to the Tribunal. By the impugned orders, insofar as the claim of depreciation on the equipment leased out to PSEB and NACAST, is concerned, the Tribunal has directed the AO to allow it but in respect of other assets, it has remanded the matter back to the AO with a direction to reframe the assessment in accordance with law after allowing the assessee an opportunity to cross-examine the persons, on whose statements reliance had been placed. We have heard Mr. D.S. Patwalia, learned counsel for the Revenue and Mr. Ajay Vohra, learned counsel for the assessee. The main thrust of Mr. Patwalia’s arguments is that the Tribunal has erred in entertaining additional evidence, furnished by the assessee before it, without following the procedure laid down in r. 29 of the IT (Appellate Tribunal) Rules, 1963 (for short, ‘the Rules’). It is asserted that the Tribunal has not recorded any reason for admitting the evidence, which had been rejected by the CIT(A). It is also submitted that before the AO, the assessee had never requested for an opportunity to cross-examine the witnesses. Learned counsel has also urged that the Tribunal has ignored the provisions contained in Expln. 3 to s. 43(6) of the Act and has not indicated the value of the assets for calculating the depreciation.
We are of the view that the appeals, preferred by the Revenue, are devoid of any merit. It is manifestly clear from the order of the CIT(A) that the additional evidence, adduced by the assessee before him, was entertained and its copies were given to the AO for his comments though ultimately, the CIT(A) did not find any substance in the appeals. It cannot, therefore, be said that the CIT(A) did not entertain the additional evidence, as is being pleaded now. Instead, he found that the additional evidence also did not advance the case of the assessee. In that view of the matter, furnishing of same evidence before the Tribunal is not tantamount to additional evidence within the meaning of r. 29 of the Rules. Thus, in our opinion, on facts in hand, there has been no violation of the said rule. It is pertinent to note that during the course of hearing of appeals before the Tribunal, no such objection was raised by the Department’s representative. As regards the question, whether in a given case, sufficient opportunity had been granted to an assessee or not is a pure question of fact. In this regard, the Tribunal has noticed that since the assessments were getting barred by limitation by 31st March, asking the assessee to meet the case against them on two dates in the last week of March itself was not sufficient opportunity. The finding of the Tribunal is based on appreciation of the material placed before it and therefore, the question proposed cannot be said to be even a question of law. Turning to the third question, namely, the determination of WDV of the assets in question, in accordance with Expln. 3 to s. 43(6) of the Act, we find that no such plea was raised before the Tribunal. Hence, the question sought to be raised does not arise from the order of the Tribunal. For the foregoing reasons, we are of the opinion that no question of law, much less a substantial question of law, arises from the order of the Tribunal. Accordingly, we decline to entertain the appeals. Dismissed.
[Citation : 286 ITR 630]
