MARG CONSTRUCTIONS LTD. REP. BY ITS MANAGING DIRECTOR MR. G.R.K. REDDY Vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS appeal by the assessee is directed against the order passed by the Income Tax Appellate Tribunal in ITA No. 237/Mds/2005 dated 24.03.2006, for the assessment year 2001 -2002. The above appeal has been admitted on the following substantial questions of law: - -

(2.) THE assessee filed its return of income on 31.10.2001 declaring total income of Rs. 50,09,340/ -. The return was processed under Section 143(1) of the Income Tax Act (hereinafter referred to as ("the Act"). Thereafter, notices under Sections 143(2) and 142(1) of the Act along with the questionnaire were served on the assessee. The Managing Director, Financial Manager, Senior Executive Accounts were issued notices and in response to that they have filed certain details. The assessee claimed that they have purchased 5000 solar photovoltaic lanterns ("Lanterns") during the last week of March 2001 from M/s. Photon Energy Systems Ltd (hereinafter referred to as the (PHOTON), which is a Hyderabad based company, said to be the manufacturer of non -conventional energy devices. The rate at which the lanterns were purchased is stated to be at Rs. 4260/ - per lantern. The assessee further claimed that these lanterns were leased out to various parties in remote places and they were given on lease to 6 agencies viz., 1) Kizhakethil Agencies, Kerala (2) Sunline Energy Solutions, Hyderabad (3) Energy Management Society, Kerala (4) Catholic Charities, Bihar (5) Bhagalpur Social Service Society, Bhagalpur and (6) Solar Alternatives, Bihar. The assessee capitalized assets (lanterns) worth Rs. 2.13 crores during the financial year 2000 -2001 and claimed depreciation @ 50% of Rs. 1.05 crores in the assessment year 2001 -2002 on the ground that they used the same for less than 180 days.

(3.) THOUGH four questions of law have been framed at the time of admission of the appeal, particularly there are only two issues viz.,