D.K.JAIN, J. - (1.) THESE three appeals, by the Revenue, under s. 260A of the IT Act, 1961 (for short, 'the Act') are directed against the orders passed by the Income -tax Appellate Tribunal, Chandigarh Bench (for short, 'the Tribunal') in ITA Nos. 340/Chandi/2001; 646/Chandi/2001 and 321/Chandi/2003, pertaining to the asst. yrs. 1996 -97 to 1998 -99.
(2.) SINCE , in substance, the issues raised in all the three appeals are similar, these are being disposed of by this common order. According to the Revenue, the orders of the Tribunal involve the following substantial questions of law : (Questions proposed in appeal for the asst. yr. 1996 -97) "1. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law to admit additional evidence and granting relief to the assessee on the basis of this evidence in violation of r. 29 of the IT (Appellate Tribunal) Rules, 1963 ? 2. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in holding that sufficient opportunity to cross -examine the evidence relied on by the Revenue had not been granted to the assessee ? 3. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in not accepting the plea of the Revenue to determine the WDV of the 100 per cent depreciable assets in question according to Expln. 3 of s. 43(6) of the IT Act, 1961 -
(3.) THE respondent -assessee is a banking company, incorporated under the Companies Act, 1956. In the return of income for the relevant assessment years, the assessee claimed depreciation on the assets, leased out by it to the Punjab State Electricity Board (for short, 'PSEB'); Nagpur Alloys Castings Ltd. (for short, 'NACAST') and various other concerns. In the case of PSEB and NACAST, the assets in question were purchased by the assessee from them and leased out on lease rental, as per terms of the lease deeds. However, in relation to other concerns, the assets were purchased from third parties and leased out to the lessees. During the course of assessment proceedings for the said assessment years, the AO held doubts about the genuineness of these transactions. After carrying out some enquiries, he found that the assets were either not in existence or the lease arrangements were nothing but pure financing transactions. Confronting the assessee with the material collected by him, the AO came to the conclusion that transactions of leasing out of assets by the assessee to various concerns were sham and colourable device to evade tax. Accordingly, he disallowed assessee's claim for depreciation on all the leased out assets. Being aggrieved, the assessee preferred appeals to the CIT(A). Before the CIT(A), the assessee furnished voluminous evidence in support of its claim for depreciation. It was pleaded before the CIT(A) that the assessee had not been allowed an opportunity to cross -examine the persons, who had denied having supplied the equipment to the assessee and whose statements had been relied upon by the AO. The CIT(A) furnished the copies of evidence, so adduced by the assessee to the AO for his comments. However, ultimately assessee's submissions did not find favour with the CIT(A) and accordingly, he dismissed assessee's appeals.;