Ita/1019/2008 Of The Commissioner Of Income Tax v. M/S Mittal Steels Ltd

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATBD THIS THR 13[th]DAY OF OCTOBER, 2014 PRESENT THR HON' BLE MR. JUSTICK N.KUMAR ANT) THR HON' BLE MR. JUSTICK B. MANOHAR Income Tax Appeal No.1019/2008 BETWEEN: 1.THB COMMISSIONER OF INCOME TAXCHRNTRAL CIRCLECR BUILDINGQUEENS ROAD.BANGALORE 2 THR DBPUTY COMMISSIONBR OF INCOME TAXCIRCLE-2(2)C.R. BUILDING|QUEENS ROADBANGALORE _. APPBRLLANTS (BY SRI JEEVAN J. NEERALGI, ADVOCATE) AND:M/S MITTAL STEELS LTD.,.WHITEFIELD ROAD, MAHADEVAPU RABANGALORE. —. RBSPONDBENT (BY SRI S PARTHASARATHI, ADVOCATE A/W JINITA.CHATTERJEE AND SRI V.K. GURUNATHAN, ADVOCATES) This Income Tax Appeal is filed under Section|260-A of Income Tax Act, 1961 praying to formulate the substantial questions of law and to allow theappeal and set aside the Order dated 11-06-2008passed by the ITAT, Bangalore in IIT(SS)JA No.12/Bang/2007 and confirm the order passed by theDeputy Commissioner of Income Tax , Circle-2(2),.Bangalore. _ This Income Tax Appeal coming on for Hearingthis day, N. Kumar J., delivered the following: JUDGMENT The revenue has preferred this appeal challengingthe order passed by the Tribunal. 2. This appeal is admitted to consider the following substantial questions of law: “1. Whether the Appellate Authorities were|correct in reversing the finding of theAssessingOfficerthattheleaserentals was claimed on bogus assets|and was a mere finance transactionwithout taking into consideration thematerial/ statements relied on by theAssessing Officer and consequently|recorded a perverse finding?correct in reversing the finding of theAssessingOfficerthattheleaserentals was claimed on bogus assets|and was a mere finance transactionwithout taking into consideration thematerial/ statements relied on by theAssessing Officer and consequently|recorded a perverse finding? 2.Whether the Appellate Authorities werecorrect in reversing the finding of theAssessing Officer that the lease rentalscorrect in reversing the finding of theAssessing Officer that the lease rentals was claimed on bogus assets andconsequentlyTLodepreciation1S|allowable on these assets?”| 3. We have gone through the order passedbytheAssessingAuthority, FRirstAppellateAuthority and the Tribunal. — 4. The assessee challenged the order passed by the Assessing Authority who held that theclaim of lease rentals is bogus and the claim ofdepreciation of machinery is also bogus as nomachinery exists. In appeal, the First AppellateAuthority sought for remand report. Not one butfour reports were submitted by the AssessingAuthority. The said reports run counter to thefindings recorded by the Assessing Authorityoriginally. The basis for the order of the AssessingAuthority was that the assessee had not receivedchilled steel rolls whereas it was found that it hadreceived MS Rolls. The factual error is committedbytheAssessingAuthority.|In|SOfar.as| depreciation claimed for the machinery, thematerial on record shows that the machinery wasavailable in the factory premises which theAssessing Authority was not able to understand.Therefore, the First Appellate Authority on thebasis of the remand report submitted by theAssessing Authority held that the assessee hastaken M.S. rolls on lease and they are also therequisite machinery. The claim for deduction oflease rentals and depreciation was fully justifiedand accordingly, the findings of the AssessingAuthority was set aside. Before the Tribunal againon re-appreciation of the entire material on record,theOrderoT|theAppellateAuthorityWaScontirmed. Oo. The question whether the assessee took|M.S.rolls|OT]leaseandwhether|he|hadmachineries on which he claimed depreciation waspurely a question of fact. Based on the remandreport submitted by the Assessing Authority, a Oo. The question whether the assessee took|M.S.rolls|OT]leaseandwhether|he|hadmachineries on which he claimed depreciation waspurely a question of fact. Based on the remandreport submitted by the Assessing Authority, a finding of fact has been recorded in favour of theassessee and against the revenue. In thosecircumstances, we do no find any substantialquestion of law that arise for consideration in thisappeal though the aforesaid two questions areframed, they do not constitute a substantialquestion of law. 6. In that view of the matter, we do no seeany merit in this appeal. Accordingly, the appealis dismissed without answering the questions oflaw which are framed which do not constitutesubstantial question of law. Sd/-| Judge od/-/ Judge Nsu/-|