- (1.) THE present appeal is filed by the assessee against the impugned order dated 13.7.2005 passed by the Income Tax Appellate Tribunal, Lucknow in I.T.A. No.807/Luc/2002 for the Assessment Year 1989 -90.
(2.) ON 10.9.2009, a coordinate Bench has admitted the appeal on the following substantial questions of law: - "(i) Whether on the facts and in the circumstances and in view of the provision of section 3 of the Income Tax Act as amended vide Direct Taxes (Amendment) Act, 1987 with effect from 1 -4 -1989 and in force during the relevant assessment year [which was the transitional assessment year] read with rules contained in Tenth Schedule, and as explained vide CBDT Circular No.549 dated 31 -10 -1989, the Ld. ITAT is not justified in affirming the order of the CIT(A) by which the depreciation in respect of assets of the hire purchase and leasing business of the appellant has been allowed only for 12 months as against the claim of the appellant -assessee for 22 months. (ii). Whether on the facts and in the circumstances of the case, the finding of the Ld. ITAT that the business of hire purchase and leasing started by the appellant -assessee during the relevant previous year is a new source of income is not legally correct as the same is based on irrelevant considerations and not on relevant considerations having nexus to the issue in question."
(3.) THE brief facts of the case are that earlier the Tribunal vide its order dated 29.9.2000 passed in I.T.A. No.138(Alld) of 1993 for the assessment year under consideration has remanded the matter back to the A.O. In pursuance to the order of the Tribunal, the A.O. has passed an order, which was assailed before the first appellate authority as well as before the Tribunal in the second round but the claim of the assessee was rejected. So, the assessee has knocked the door of this Hon'ble Court. From the record, it appears that assessee's firm was deriving income from trading of diesel engines. During the assessment year under consideration, the assessee started a new business in the name and style of M/s Indian Sales Hire Purchase and leasing division. The original source of income of the assessee was in the name of M/s India Sales Division and had a previous year of 22 months and the accounting period was 26th May, 1987 to 31st March, 1989. The assessee has started a new business of hire purchase and leasing in March, 1989. In respect of new business, the assessee has claimed depreciation allowance amounting to Rs.19,26,710/ - for 22 months by mentioning that new source of business be treated as a part of the original business. But the same was rejected by the A.O. The order of the A.O. was confirmed by both the appellate authorities, so the present appeal has been filed.;