COMMISSIONER OF INCOME-TAX Vs. CANARA BANK

JUDGEMENT

(1.) Mr.K.V.Aravind, learned counsel for the revenue.

(2.) Facts leading to filing of this appeal briefly stated are that the assessee, which is a Nationalized Bank filed its returns of income for Assessment Years 1996-97 and 1997-98 on 29.11.1996 and 28.11.1997, in which total income of Rs.1,92,45,20,300/- and Rs.2,96,99,47,660/- respectively was declared. In the assessments made under Section 143(3) of the Act, the Assessing Officer disallowed the depreciation claimed on the assets leased to M/s Rajender Steels Pvt. Ltd., M/s Kedia Castle Dellon Industries Ltd. and M/s Kedia Mills and Distilleries Ltd. on the ground that the assets were not found to be in existence in a search conducted under Section 132 of the Act by the Department in March 1998 in the premises of Rajender Group and in September 1996 in Kedia Group of Companies. The assessee thereupon filed appeals before the Commissioner of Income Tax (Appeals) for the Assessment Years 1996-97 and 1997-98. The aforesaid appeals were dismissed vide order dated 26.7.1999 and 12.06.2000 respectively. The assessee thereupon approached the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The tribunal vide order dated 12.10.2004 held that Assessing Officer has failed to furnish the copies of the statements recorded during the course of search as well as other material and has also not provided sufficient opportunity to the assessee to cross examine the lessee. The tribunal therefore, remitted the matter to the Assessing Officer with a direction to furnish copies of all the material relied upon by the Assessing Officer and to afford an opportunity to the assessee of cross-examination.

(3.) The Assessing Officer by an order dated 28.12.2006 once again disallowed the depreciation claimed by the assessee in respect of assets leased to M/s Rajender Steels Ltd., M/s Kedia Mills and Distilleries Ltd. and M/s Kedia Castle Dellon Industries Ltd. The assessee thereupon filed appeals before the Commissioner of Income Tax (Appeals), who by an order dated 01.06.2011 inter alia held that the assessee had discharged the onus to prove the genuineness of transaction by furnishing necessary documents viz., copies of sanction letter, lease agreements, invoices, inspection records on various dates and inspection reports pertaining to pre search and post search period in support of its claim and the Assessing Officer did not rebut the corroborative evidence filed by the assessee. Thus, on the basis of meticulous appreciation of evidence on record, the Commissioner of Income Tax (Appeals) held that the assessee has been able to corroborate its claim of existence of leased equipment with incontrovertible evidence and directed the Assessing Officer to allow the depreciation of Rs.1,52,80,650/- and Rs.1,14,60,488/- for Assessment Years 1996-97 and 1997-98 respectively on the assets leased out to M/s.Kedia Castle Dellon Industries Ltd. and M/s. Kedia Mills & Distilleries Ltd. In the result, the appeals were allowed. Being aggrieved, the revenue preferred an appeal before the Income Tax Appellate Tribunal. The tribunal by order date 11.12.2015 affirmed the finding recorded by the Commissioner of Income Tax (Appeals) and dismissed the appeals preferred by the revenue. In the aforesaid factual background, this appeal has been filed.