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Income Tax Appellate Tribunal, “A”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI RAVISH SOOD, JM
आदेश / O R D E R PER R.C.SHARMA (A.M): This appeal filed by the assessee against the order of CIT(A) for the A.Y.1997-98, in the matter of order passed u/s.143 (3) r.w.s.147 of the IT Act. 2. In this appeal, assessee is aggrieved for reopening of assessment as well as disallowance of Rs.1,96,95,515/- in respect of lease rent paid to Union Bank of India. 3. We have considered rival contentions and carefully gone through the material placed before us. The assessment was reopened on the basis of information received by the AO regarding lease rent paid to Union Bank of India. After going through the reasons recorded for reopening and the 2 M/s. Mafatlal Industries Ltd., findings recorded by AO and CIT(A), we are satisfied that reopening was well founded. Accordingly, we do not find any reason to interfere in the order of CIT(A) upholding reopening of the assessment.
With regard to the disallowance of lease rent paid to Union Bank of India, AO observed that this was the amount shown in the books of Union Bank of India as receivable on account of lease rent shown from the assessee company M/s.Mafatlal Industries Ltd., during the year. Therefore, unless and until the assessee comes up with its own figure, it would be reasonably wise and correct to adopt the figure as earlier arrived in the books of the receiver i.e., Union Bank of India. Therefore, in view of these findings, AO disallowed lease rent of Rs.196.95 lakhs out of total lease rents debited in the P & L account.
Contention of learned AR was that no lease rent was paid to the Union Bank of India during the year under consideration therefore no disallowance out of lease rent paid to other parties arises. Our attention was invited to a chart indicating lease rent paid to the various concerns was placed before us which indicated that payment of Rs. 1,96,95,515/- to Union Bank of India was towards cost of asset, the total lease rental works out to be Rs.3,23,86,130/-. However, no lease rent was paid during the year in so far as asset was taken on lease from 01/04/1997 only. Our attention was also invited to various clauses of lease rent agreement dated 02/09/1996.
Considering entire material facts as emerged out of the order of the lower authorities vis-à-vis lease agreement, it appears that there is a