Mittal Belting and Machinery Stores vs Commissioner of Income Tax and Another

Jawarhar Lal Gupta, J.—The assessee complains that the Revenue has illegally declined deduction on account of depreciation on the value of the truck purchased by it on March 11, 1992. It claims that the case raises a substantial question of law and the orders passed by the Assessing Officer, the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal be set aside.

The dispute relates to the assessment year 1992-93. On March 11, 1992, the assessee purchased a truck for an amount of Rs. 2 lakhs from Jiwan Lal. This money was "routed back" to the appellant and the truck was ultimately transferred to Anupam Kumar, brother of the seller. On an examination of the evidence, the Assessing Officer disallowed the appellant''s claim with the finding that the purchase of the truck was a device to avoid payment of tax. This finding has been affirmed by the Commissioner as also the Income Tax Appellate Tribunal. Hence, this appeal.

The solitary contention raised by Mr. Mittal, learned counsel for the appellant, is that the authorities have erred in disallowing the claim of depreciation made by the appellant. Mr. Sawhney, appearing for the Revenue, submits that the orders are legal and valid. He submits that on the examination of the evidence the authorities have recorded a finding of fact that the amount of Rs. 2 lakhs had come back to the assessee within a week of its purchasing the truck and that the truck had gone back to the family of the seller after some time. Thus, it was a device to save tax. It has also been contended that the present appellant, viz., Mittal Belting and Machinery Stores, had not filed any appeal before the Commissioner or the Income Tax Appellate Tribunal. The appeals had been filed by the proprietor. Therefore, the present appeal by the company/firm is not maintainable.

It is undisputedly true that the truck was transferred in the appellant''s name on March 11,1992. It is also correct that an amount of Rs. 2 lakhs had been paid by cheque to Jiwan Lal, the seller of the truck. However, it is not disputed that on March 16,1992, the amount of Rs. 2 lakhs had come back to the assessee as an interest free deposit. Thereafter, in due course of time the truck had also been transferred to the brother of the seller. On these facts, the Revenue has drawn a possible conclusion. In doing so, it has committed no error of law.

Mr. Mittal contends that the ownership of the truck had passed to the appellant and the income therefrom, i.e., Rs. 2,200 were added to its income. Thus, the benefit of depreciation could not have been denied. We are unable to accept this contention. If on the examination of the evidence it is found that there was no genuine transaction between the parties, a pure paper transaction could not have entitled the assessee to claim benefit under the law. There is no error which may require interference with the order. Consequently, we find no merit in the appeal.

As for the second objection raised on behalf of the Revenue with regard to the maintainability of the appeal, learned counsel for the appellant has stated that it is only a clerical error.

In view of our order on the merits, it is not necessary for us to go into the maintainability of the present appeal.

Dismissed. No costs.