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Judgment
D.A. Mehta, J.—At the time of admission on 22.11.1999 following three questions were formulated by the High Court as substantial questions of law:
Whether the Tribunal has erred in holding that the principle laid down in Mcdowel''s case will not apply?
Whether the Appellate Tribunal is right in law and on facts in not appreciating that the transaction between the assessee-RSEB and ITC Bhadrachalam were sham transactions?
Whether the Appellate Tribunal is right in law and on facts in holding that the assessee being a hire purchaser is entitled to depreciation?
The Assessment Year in question is 1995-96. In the assessment framed u/s 143(3) of the Income Tax Act, 1961 the Assessing Officer disallowed the claim of depreciation @ 100% claimed by the assessee on the ground that the transactions between Rajasthan State Electricity Board, ITC, Bhadrachalam Finance and Investment Limited and the assessee were not genuine transactions. The matter was carried in appeal by the assessee where Commissioner (Appeals) confirmed the findings of the Assessing Officer. In Second Appeal the Tribunal, vide its order dated 16.04.1999, held that the transactions were genuine and the assessee was entitled to depreciation as claimed.
It is not necessary to set out the detailed reasons recorded by the Tribunal as it is common ground between the parties that the issue now stands concluded by order dated 10.09.2008 rendered in Tax Appeal No. 444 of 2008 in the case of The Commissioner of Income Tax-Ahmedabad-II v. Gujarat Gas Co. Ltd., wherein identical issue was involved and the Tribunal''s order has been upheld by the High Court. During course of hearing the learned Counsel for the appellant-revenue submitted that the Assessing Officer having not processed the claim of depreciation on merits, the Assessing Officer must be directed to grant depreciation on written down value of the assets in question.
In light of the aforesaid order dated 10.09.2008 it is held that the transactions were genuine transactions and the Tribunal has not committed any error in allowing claim of depreciation. All the three questions stand answered accordingly. The Assessing Officer shall now process the claim of depreciation in accordance with law. The appeal stands dismissed accordingly with no order as to costs.