These cross appeals by revenue and assessee were heard together and are being disposed of by consolidated order for sake of convenience, since issues involved are common. 2. We shall first deal with appeals by revenue. first ground raised by revenue common for these three assessment years relate to method of accounting of finance charges, whether it should be EMI (Equated Monthly Instalment) method as adopted by assessee or CRM (Capital Recovery Method) as urged by revenue. It is contended by ld. DR that ld. CIT(A) failed to appreciate that for purpose of income-tax alone assessee is deviating from computation of income made by it in its books and as per decision of Hon'ble Supreme Court in case of CIT v. British Paints India Ltd. [1991] 188 ITR 44, Assessing Officer is under obligation to ensure that correct income is brought to tax. ld. counsel for assessee, on other hand, supported orders of ld. CIT(A) on this issue. 3. Having carefully considered arguments of parties and perusing materials on record, we find that for assessment years 1995-96, 1996-97, 1997-98, etc. Tribunal in assessee's own case has decided this issue in favour of assessee by dismissing revenue's appeal on this account for elaborate reasons stated in paras 3 to 32 of its order dated 28-2-2006 in ITA Nos. 1008, 1712/Mds./99, 1217, 300/Mds./2000 and 860/Mds/01. Since, admittedly there is no change in facts and circumstances of case, in our considered opinion, no interference is called for on our part in orders of ld. CIT(A). contention of ld. DR was that earlier order of Tribunal relied upon by ld. CIT (Appeals) has not become final. But, as long as said finding of Tribunal is not disturbed by any process authorized by law, rights of assessee will continue to be governed by Tribunal's order. In this view of matter, this ground of revenue stands dismissed. 4. second ground common for assessment years 2000-01 and 2001- 02 is to effect that CIT (Appeals) erred in directing allowance of enhanced depreciation on leased assets. We have considered matter in light of orders of authorities of below and also aforesaid earlier order of Tribunal in assessee's own case. In view of decision of Hon'ble Jurisdictional High Court in case of CIT v. Annamalai Finance Ltd. [2005] 275 ITR 451, we have no hesitation to uphold findings of ld. CIT(A) that leased out commercial vehicles are eligible for higher rate of depreciation. This ground is also decided against revenue. 5. For assessment years 2000-01 and 2001-02, there is yet another common issue raised by revenue which relates to estimated expenditure disallowed by revenue in earning income exempted under section 10(33). We have carefully considered matter and in view of categorical findings of CIT(A) which is in consonance with ITAT decision in case of Asstt. CIT v. Teeaye Investment Ltd. [IT Appeal No. 1816 (Mds.) of 1989], wherein under similar facts and circumstances of case it was held that amount of 2 per cent of total exempt income should be treated as reasonable expenditure to earn dividend income. In this view of matter, we find no infirmity in direction of ld. CIT(A) and for both these years amount Rs. 57,500 each may be treated as reasonable expenditure. ground raised by revenue is accordingly dismissed. 6. In result, revenue's appeals in ITA Nos. 1218 to 1220/Mds./2005 are dismissed. 7. Coming to appeals filed by assessee, in ITA No. 1104/Mds./05 f o r assessment year 1995-96 first ground raised is with regard to disallowance of depreciation of Rs. 33,90,172 on assets leased to M/s. Ganesh Benzoplast, Mumbai. contention of ld. counsel is that ld. CIT(A) totally ignored details furnished by assessee in support of cost of leased assets before him. facts of case are that in respect of assets leased to above company assessee claimed depreciation showing cost of assets at Rs. 1,99,53,440. Assessing Officer after referring matter to Valuation Officer and considering his report, had taken cost of assets at Rs. 63,92,750 in original assessment and he again retained said cost of asset in assessment framed under section 143(3) read with section 250 of Act. It was contention of assessee before ld. CIT(A) that Assessing Officer should not have applied Explanation 4A to section 43(1) of Act because it was made applicable with effect from 1-10- 1996 only. Referring to decision of Hon'ble Supreme Court in case of Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407 it was contended before ld. CIT(A) that power of enquiry granted to Assessing Officer under sections 133(6) and 142(2) does not include power to refer matter to Valuation Officer. ld. CIT(A) did not find any force in argument of assessee and observing that provisions of section 142A are applicable in present case and Assessing Officer's reliance on Valuation Officer's report is not misplaced, he held that Assessing Officer was justified in restricting depreciation on assets leased to M/s. Ganesh Benzoplast, Mumbai on basis of report of Valuation Officer. Aggrieved by finding of ld. CIT(A) assessee is in appeal before Tribunal. 8. We have heard both parties and carefully considered material on record. Since admittedly in this case lessor has discharged its obligation of making equipment available to lessee in financial year, respectfully following decision of Hon'ble jurisdictional High Court in case of Annamalai Finance Ltd. (supra), we allow depreciation as claimed by assessee on assets leased to M/s. Ganesh Benzoplast, Mumbai. This ground of appeal raised by assessee is accordingly allowed. 9. other ground raised by assessee in this appeal is in respect of disallowance of depreciation of Rs. 12,87,500 on assets leased to M/s. Rajinder Pipes Ltd. It was contention of ld. counsel for assessee that ld. CIT(A) failed to appreciate that assessee had furnished concrete evidence in form of installation certificates and insurance cover for leased assets. In original assessment assessee had claimed depreciation on suction blower with 10HP squirred Cage Indicator Motor and Ducting Systems stated to have been bought from M/s. R.M. Machines (P.) Ltd., Kanpur for Rs. 51.50 lakhs and leased out to M/s. Rajinder Pipes Ltd., Mumbai. Assessing Officer disallowed assessee's claim for depreciation as according to him enquiries made by him revealed that no such machinery was actually manufactured by M/s. R.M. Machines (P.) Ltd. Further M/s. Rajinder Pipes Ltd. did not show any plant and machinery having acquired by them either through purchase or by lease during previous year 1994-95 onwards. In purchase or by lease during previous year 1994-95 onwards. In circumstances, Assessing Officer disallowed claim in respect of alleged assets leased to M/s. Rajinder Pipes Ltd. In appeal, ld. CIT(A) held that assessee failed to discharge onus to substantiate its claim for depreciation and accordingly upheld action of Assessing Officer in disallowing depreciation on assets stated to have been leased to M/s. Rajinder Pipes Ltd. assessee is in further appeal before Tribunal. 10. We have carefully considered matter. In our considered opinion claim of depreciation on transaction cannot be rejected in view of fact that existence of asset is not disputed. As held by us in revenue's appeal in earlier part of this order, this issue is covered in favour of assessee by decision of Hon'ble jurisdictional High Court in Annamalai Finance Ltd.'s case (supra). It could be seen that Assessing Officer had disallowed claim of depreciation as according to him enquiries made; by him revealed that no such machinery was actually manufactured by M/s. R.M. Machines (P.) Ltd., Kanpur. In so doing he totally ignored evidence produced by assessee in form of installation certificates from lessee, payment vouchers for leased assets etc. It was contention of ld. counsel before us that in fact existence of machinery has been proved by assessee and no effort was taken by authorities to examine leased assets and no basic enquiry was made in this regard and simply on surmises and suspicion claim for depreciation was found not to be admissible. In circumstances, we have no hesitation to uphold claim of assessee. This ground of appeal is, therefore, allowed. 11. In result, assessee's appeal in ITA No. 1104/Mds./05 for assessment year 1995-96 is allowed. 12. Now coming to appeals by assessee in ITA Nos. 1105 and 1106/Mds./05 for assessment years 2001-02 and 2000-01, first common ground raised is against disallowance made with regard to provision for Non- Performing Assets created in books by assessee on basis of statutory guidelines issued by Reserve Bank of India. ld. CIT(A) held that Assessing Officer was justified in disallowing provisions for Non-Performing Assets for both assessment years. 13. We have considered issue involved in these appeals in light of arguments of representatives of both parties and material on record. As held by Hon'ble jurisdictional High Court in case of T.N. Power Finance & Infrastructure Development Corpn. Ltd. v. Joint CIT [2006] 280 ITR 491 'merely because Reserve Bank of India had directed assessee to provide non-performing assets, that direction could not override mandatory provisions of Income-tax Act contained in section 36(1)(viia) which stipulate deduction not exceeding 5 per cent of total income only in respect of provision for bad and doubtful debts which are predominately revenue in nature or trade related and not for provision for non-performing assets, which are of predominately capital nature. assessee was not entitled to deduction, in view of Explanation to section 36(1)(vii) which says that provision for bad and doubtful debts made in accounts of assessee is not allowable deduction.' Respectfully following aforesaid decision of Hon'ble Madras High Court we uphold finding of authorities below and dismiss ground raised by assessee for both these assessment years. 14. Another common ground is against disallowance of lease equalisation charges of Rs. 6,08,72,000 and Rs. 5,28,05,000 respectively for assessment years 2000-01 and 2001-02. ld. CIT(A) decided this issue by following his order in assessee's own case for assessment year 1996-97. After hearing both parties we find that this point was decided against assessee by Tribunal in its order dated 28-2-2006 in ITA Nos. 834, 1642/Mds./99 and 1213/Mds./2000 for assessment years 1995-96 to 1997- 98. At time of hearing before us also ld. DR placed reliance on said order of Tribunal. In this view of matter we affirm order of ld. CIT(A) and decide this issue against assessee. This ground raised by assessee for both these years are accordingly dismissed. 15. In next ground assessee pleaded that ld. CIT(A) ought to have held that lease transactions with M/s. Rajinder Pipes Ltd. Mumbai and Ganesh Benzoplast, Mumbai were genuine lease transactions and accordingly he ought to have deleted addition of Rs. 63,62,553 (assessment year 2001- 02) and Rs. 1,19,52,914 (assessment year 2000-01). It was contention of assessee before ld. CIT(A) that first appellate authority in his order dated 30-3-1999 for earlier assessment years 1995-96 to 1997-98 had allowed depreciation on certain assets but Assessing Officer has treated those lease transactions as finance transactions. Since according to assessee facts and circumstances of case are same, it was pleaded by assessee's counsel that Assessing Officer was not justified in disallowing claim by making addition by way of notional interest on deemed loan transactions. It was contention of assessee's counsel before us that ld. CIT(A) ought to have appreciated that even debt due from M/s. Rajinder Pipes Ltd., Mumbai and M/s. Ganesh Benzoplast, Mumbai have subsequently become bad and irrecoverable and entire amount was written-off in books as bad debt. 16. As consequence of our decision in assessee's appeal in ITA No. 1104/Mds./05 for assessment year 1996-97 in para-10 of this order, we are inclined to accept claim of assessee that since transactions in question are genuine lease transactions, additions in question in their entirety without excluding such lease transactions should have been deleted. Ordered accordingly. 17. last ground raised in these appeals is that ld. CIT(A) ought to have held that no part of administrative expenditure and interest on borrowed funds disallowed by Assessing Officer could be attributed to investment activity for earning income exempt under section 10(33) of Act. It was contention of assessee's counsel before us that ld. CIT(A) ought to have appreciated that assessee had sufficient owned-funds (in form of share capital and ploughed-back profits) which were utilised for investment fetching income exempt under section 10(33) of Income-tax Act, 1961. ld. counsel further pointed out that Tribunal's decision in case of Teeaye Investments Ltd. [IT Appeal No. 1816 (Mds.) of 1989] relied upon by ld. CIT(A) is distinguishable and not applicable to facts of assessee's case. ld. DR kly supported orders of authorities below on this issue. 18. We have dealt with identical issue in revenue's appeals for very same assessment years in para 5 of this order wherein in view of categorical finding of ld. CIT(A) which is in consonance with Tribunal's decision in Teeaye Investments Ltd.'s case (supra) it was held that amount of 2 per cent of total exempt income should be treated as reasonable expenditure to earn dividend income. Since facts and circumstances of case in respect of assessment years under consideration are also similar, we uphold finding of ld. CIT(A) that for both these years amount of Rs. 57,000 each may be treated as reasonable expenditure. In this view of matter, respectfully following earlier order of Tribunal in Teeaye Investments Ltd.'s case (supra) we dismiss grounds raised by assessee on this issue. 19. In result, assessee's appeals in ITA Nos. 1105 and 1106/Mds./05 are partly allowed. Per Chandra Poojari, Accountant Member. - I have gone through order o f ld. Judicial Member. But I am unable to agree with him fully with his proposed order. In ITA Nos. 1104, 1105 and 1106, I disagree with issues discussed hereunder. In ITA No. 1104/Mds./2005 filed by assessee for assessment year 1995-96, assessee is aggrieved against disallowance of depreciation of Rs. 33,90,172 on assets leased to M/s. Ganesh Benzoplast, Mumbai. 2. ld. Judicial Member allowed above appeal of assessee placing reliance on judgment of Hon'ble Jurisdictional High Court in case of Annamalai Finance Ltd. (supra). 3. In this case, question that was before High Court for consideration is:- ' Whether on facts and circumstances of case, Tribunal was right in holding that apparent consideration should be accepted by Assessing Officer as cost in sale and lease back transaction although amounts specified as lease amounts were not received by assessee?' High Court has held as follows:- High Court has held as follows:- ' Strictly speaking 'apparent consideration' as held by Bombay High Court in Polycon Paper Ltd. v. Union of India (253 ITR 182) would mean whole or part of consideration for such transfer which is payable on any date o r dates falling after date of such agreement for transfer and value of such consideration shall be deemed to be discounted value of such consideration as on date of such agreement or transfer determined by adopting such rate of interest as may be prescribed in this behalf. Therefore, unless and until there are reasons to believe that cost in sale or amount in lease back transaction, as specified, was received but not disclosed, we do not see any error on part of Tribunal in accepting apparent consideration.' As seen from above judgment, High Court has held that unless and until there are reasons to believe that cost or amount in lease back transaction as specified was received, but not disclosed, there was no error on part of Tribunal in accepting apparent consideration as actual consideration. 4. In present case, there is k reason to suspect that consideration has passed between parties is not real consideration. actual consideration is not that which is apparent on record. Hence Explanation to section 43(1) of Act provides that if assets are acquired second hand and Assessing Officer is satisfied that main purpose of transfer of such assets, directly or indirectly to assessee, was reduction of liability to income-tax by claiming depreciation with reference to enhanced cost, actual cost to assessee shall be amount that may be determined by Assessing Officer with previous approval of Deputy Commissioner. mere production of documentary evidence showing that contract was made for purchase of assets at certain price does not conclusively establish correctness of claim made by assessee specially where Assessing Officer is of opinion that in deal assessee has taken resort to subterfuge or device in order to avoid tax which he is liable to pay or otherwise has acted fraudulently or transaction is illusory or colourable. In such cases, Assessing Officer can go behind contract and ascertain actual cost for purposes of correct ascertainment of income-tax liability of assessee. [Kungundi Industrial Works (P.) Ltd. v. CIT [1965] 57 ITR 540 (AP); Jogta Coal Co. Ltd. v. CIT [1965] 55 ITR 89 (Cal.); Pindi Kashmir Transport Co. Ltd. v. CIT [1954] 26 ITR 595 (Lahore); Guzdar Kajora Coal Mines Ltd. v. CIT [1972] 85 ITR 599 (SC); G. Vijayaranga Mudaliar v. CIT [1963] 47 ITR 853 (Mad.) Craddicj v. Zevo Finance Co. Ltd. 27 Tax Cas. 267 (HL); Motiram Roshan Lal Coal Co. v. CIT [1933] 1 ITR 329 (Pat.); R.B. Bansilal Abirchand Spg. & Wvg. Mills Ltd. v. CIT [1970] 75 ITR 260 (Bom.)]. This Explanation 3 nowhere speaks of market value being determined by Assessing Officer but it speaks of 'actual cost' being determined by Assessing Officer with approval of Dy. Commissioner having regard to all circumstances of case-Ginners & Pressers (P.) Ltd. v. CIT [1978] 113 ITR 616 (Bom.). For this purpose I also rely on judgment of Hon'ble Supreme Court in case of CIT v. Durga Prasad More [1971] 82 ITR 540 wherein it was held that:- ' that though apparent statement must be considered real until it was shown that there were reasons to believe that apparent was not real, in case where party relied on self-serving recitals in documents, it was for that party to establish truth of those recitals: taxing authorities were entitled to look into surrounding circumstances to find out reality of such recitals.' 5. Therefore, in my opinion, Assessing Officer is within his jurisdiction to refer matter to D.V.O., to ascertain correct value. Accordingly, I do not find any infirmity in order of CIT (Appeals) confirming disallowance made by Assessing Officer and I sustain his order on this issue. Incidentally, case law relied on by assessee before CIT (Appeals) in case of Smt. Amiya Bala Paul (supra) is no more good law in view of amendment with retrospective effect. 6. next ground relates to non-allowance of depreciation on assets leased to M/s. Rajinder Pipes Ltd. This issue is decided by of order of Tribunal for assessment year 1995-96 in ITA No. 1213/Mds./2000 in assessee's own case dated 28-2-2006 wherein Tribunal has confirmed order of CIT (Appeals) who has set aside this issue to file of Assessing Officer for fresh adjudication. Accordingly, we set aside this issue to file of Assessing Officer for fresh adjudication as findings of Assessing Officer consequent upon direction of Tribunal on earlier occasion (supra) will have bearing on this issue for this assessment year also. Accordingly, this appeal is allowed partly for statistical purpose. 7. In ITA Nos. 1105 and 1106/Mds./2005, assessee has taken ground that CIT (Appeals) erred in confirming addition made by Assessing Officer towards interest on transactions treated by Assessing Officer as loan transaction. Similar issue was dealt with by CIT (Appeals) for assessment year 1995-96 and CIT (Appeals) while passing order for assessment years 2000-01 and 2001-02 has held as follows:- ' Since I have given certain directions in respect of depreciation relating to assets leased out to M/s. Ganesh Benzoplast and M/s. Rajinder Pipes Ltd., Mumbai in ITA TR No. 87/2004-2005 for assessment year 1995-96 vide my order dated 28-2-2005, Assessing Officer is directed to take into account these lease transactions which are set aside by CIT (Appeals) for assessment year 1995-96. Subject to this, appellant is treated as having succeeded on this ground for both these years.' It is to be noted that same issue was subject-matter of appeal before ITAT, for assessment year 1995-96 in ITA No. 1213/Mds./2000 wherein Tribunal vide order dated 28-2-2006 has held that:- ' 107. Depreciation claimed on assets leased to M/s. Rajinder Pipes Ltd.-In this case, assessee-company claimed depreciation of Suction Blower with allied systems bought from M/s R.M. Machinery Pvt. Ltd., Kanpur for value of Rs. 51.50 lakhs and leased to M/s. Rajinder Pipes Ltd. Assessing Officer on basis of his enquiry held that there was no such machinery manufactured and supplied and supplier M/s. R.M. Machinery (P.) Ltd. did not have infrastructure and technical personnel to manufacture such machinery. 108. Upon assessee's appeal, learned Commissioner of Income-tax (Appeals) held as under:- 'I find that Assessing Officer had not categorically proved that asset was non-existent. fact of purchase of machinery is to be verified vis- -vis letters of supplier and result of enquiry is to be put to assessee for rebuttal. Further enquiry is to be carried on to verify mode of payment of lease consideration and mode of repayments. Hence I set aside this issue to files of Assessing Officer to come to proper conclusion after necessary enquiry as suggested above.' 109. Depreciation on S.S. Liquid Chemical Storage Tank and M.S. Liquid Chemical Storage Tank:- assessee claimed that it had leased out above asset to M/s. Ganesh Benzoplast, Mumbai. cost of asset was stated to be Rs. 1,99,53,440. Assessing Officer referred matter to Valuation Officer of Department who in his report dated 27-1-1998 valued assets at Rs. 63,92,750. Assessing Officer issued show-cause notice dated 9-2-1998 to assessee to explain as to why cost of machinery should not be taken as per Department Valuation Officer. 110. Upon assessee's appeal, learned Commissioner of Income-tax (Appeals) held as under:- 'I find it fit to set aside issue to files of Assessing Officer for giving necessary opportunity to assessee to establish that all machineries in possession of lessee were taken into consideration by Valuation Officer and also to establish that there was no inflation with regard to cost of assets.' 111. On these issues, learned Departmental Representative submitted that there is no infirmity in Commissioner of Income-tax (Appeals)'s findings and consequent remission of issue to Assessing Officer's files. We have carefully considered this issue. We do not find any need to interfere with order of learned Commissioner of Income-tax (Appeals) in this regard.' Since Tribunal, for assessment year 1995-96 has set aside as cited above and consequent findings of Assessing Officer has bearing on this issue for these assessment years, I set aside this issue relating to interest on transactions with Rajindra Pipes Ltd., as loan transaction to file of Assessing Officer with direction to decide this issue in accordance with findings derived by Assessing Officer in response to directions of Tribunal earlier as above, for these assessment years also. Assessing Officer is also directed to consider interest only on balance value of asset which is not entitled for depreciation. However, we direct Assessing Officer to treat interest on transaction as loan transaction in case of transaction with M/s. Ganesh Benzoplast over and above value of DVO's report as discussed in ITA No. 1104/Mds./05 as above. 8. In result, ITA No. 1104/Mds./05, ITA Nos. 1105 and 1106/Mds./05 are partly allowed for statistical purpose. revenue's appeal in ITA Nos.1218 to 1220/Mds./2005 are dismissed. Per N. Vijayakumaran, Judicial Member. ITA No. 1104/Mds./2005: (1)Whether on facts and circumstances of case CIT (Appeals) i s justified in confirming action of Assessing Officer in determining value of assets and recalculate depreciation which is subject-matter of lease transaction with M/s. Ganesh Benzoplast? (2)Whether on facts and circumstances of case, CIT (Appeals) i s justified in confirming action of Assessing Officer in disallowing claim of depreciation on asset leased to M/s. Rajinder Pipes Ltd., Mumbai? ITA Nos. 1105 and 1106/Mds./05: (1)Whether on facts and circumstances of case, CIT (Appeals) is justified in confirming action of Assessing Officer in making addition towards interest on transaction treated by Assessing Officer as loan transaction? THIRD MEMBER ORDER Per M.K. Chaturvedi, Vice-President. These appeals came before me as Third Member to express my opinion on following questions:-ITA No. 1104 (Mds.)/2005: (1)Whether on facts and circumstances of case, CIT (Appeals) i s justified in confirming action of Assessing Officer in determining value of assets and recalculate depreciation which is subject-matter of lease transaction with M/s. Ganesh Benzoplast? (2)Whether on facts and circumstances of case, CIT (Appeals) i s justified in confirming action of Assessing Officer in disallowing claim of depreciation on asset leased to M/s. Rajinder Pipes Ltd., Mumbai? ITA Nos.1105 and 1106(Mds.)/2005: (1)Whether on facts and circumstances of case, CIT(Appeals) is justified in confirming action of Assessing Officer in making addition towards interest on transaction treated by Assessing Officer as loan transaction? 2. I have heard rival submissions. In regard to first question assessee leased out assets to M/s. Ganesh Benzoplast, Mumbai. It claimed depreciation on said assets. cost of assets was taken at Rs. 1,99,53,440. To determine value of assets, Assessing Officer referred matter to DVO and had taken cost of assets at Rs. 63,92,750 in original assessment. Being aggrieved with that order assessee preferred appeal thereagainst. It was alleged before Commissioner (Appeals) that prescription of Explanation 4A to section 43(1) cannot be invoked as it was made applicable with effect from 1-10-1996 only. prescription of Explanation 4A reads as under:- ' Explanation 4A Where before date of acquisition by assessee (hereinafter referred to as 'the first mentioned person'), assets were at any time used by any other person (hereinafter referred to as 'the second mentioned person') for purposes of his business or profession and depreciation allowance has been claimed in respect of such assets in case of second mentioned person and such person acquires on lease, hire or otherwise assets from first mentioned person, then, notwithstanding anything contained in Explanation 3, actual cost of transferred assets, in case of first mentioned person, shall be same as written down value of said assets at time of transfer thereof by second mentioned person.'Reliance was placed on decision of Hon'ble Apex Court rendered in case of Smt. Amiya Bala Paul (supra). In this case Hon'ble Apex Court has held that Assessing Officer is precluded from referring to DVO question of cost of construction of house property built by assessee. power of Assessing Officer under sections 131(1) and 133(6) is distinct from and does not include power to refer matter to DVO under section 55A. report of DVO under section 55A may be considered by Assessing Officer as piece of evidence if it is relevant. However, power of enquiry granted to Assessing Officer under sections 133(5) and 142(2) does not include power t o refer matter to Valuation Officer for enquiry by latter. If power to refer any dispute to DVO were already available in sections 131(1), 133(6) and 142(2), there was no need to specifically empower Assessing Officer to do so in certain circumstances under section 55A. Section 55A having expressly set out circumstances under and purposes for which reference can be made to DVO, there is no question of Assessing Officer invoking general powers of enquiry to make reference in different circumstances and for other purposes. Such reference cannot be supported by reference to section 131(1) of Income-tax Act read with Order XXVI, rule 9, of Code of Civil Procedure, 1908, since consequences of reference to Valuation Officer under section 55A of Income-tax Act and of commission issued under section 75, read with Order XXVI, rule 9, of Code are different. 3. Commissioner (Appeals) did not find any force in argument of assessee in view of provisions of section 142A by which Assessing Officer was given power to refer matter to DVO in certain cases. This provision was inserted by Finance (No. 2) Act, 2004 with retrospective effect from 15-11-1972. learned Judicial Member did not make any comment on this aspect whereas learned Accountant Member made passing remark by saying that case law relied on by assessee before Commissioner (Appeals) in case of Smt. Amiya Bala Pal (supra) is no more good law in view of amendment with retrospective effect. assessee appears to have accepted this issue in first round itself. learned counsel for assessee submitted that there was absolutely no dispute on this aspect. core of controversy is in regard to determination of value of assets. It was further stated that reference to DVO ipso facto indicates that Assessing Officer did not doubt genuineness of transaction but its value. Further it was stated that Assessing Officer did not give any finding in regard to fact that transaction was effected with view to reduce tax liability. De hors such finding case cannot be put within ken of Explanation 3 to section 43(1). prescription of Explanation 3 to section 43(1) reads as under:- ' Explanation 3 Where before date of acquisition by assessee assets were at any time used by any other person for purposes of his business or profession and Assessing Officer is satisfied that main purpose of transfer of such assets, directly or indirectly to assessee, was reduction of liability to income-tax (by claiming depreciation with reference to enhanced cost), actual cost to assessee shall be such amount as Assessing Officer may, with previous approval of Joint Commissioner, determine having regard to all circumstances of case.'It was vehemently argued that to invoke prescription of aforesaid Explanation it is sine qua non that Assessing Officer must be satisfied that main purpose of transfer of such assets was reduction of liability to income-tax. There is absolutely no such finding in facts of present case. 4. Now it emerges out of aforesaid discussion that for making valuation of assets, Assessing Officer has with him valuation as declared by assessee based on apparent consideration. other value was based o n DVO's report dated 27-1-1998 amounting to Rs. 63,92,750. This value was disputed in appeal. matter was set aside. It was pleaded on behalf of assessee vide letter dated 10-3-1998 that number of items forming integral parts of machinery were not considered while arriving at value of machinery. These items were stated to be of nature of shell plates, angular plates, etc. During course of proceedings carried out in connection with set aside assessment assessee-company furnished copy of letter addressed to assessee-company by M/s. Ganesh Benzoplast, wherein it was mentioned that valuation cell had not considered number of items while arriving at valuation. 5. Assessing Officer made query with Valuation Cell to state clearly components taken into account while arriving at valuation of machinery. Assessing Officer did not receive any reply from Valuation Cell. Assessing Officer made it clear in order that report available with department was bereft of miniscule description of components taken into account for arriving at valuation. In these circumstances, Assessing Officer found it convenient not to change valuation adopted in assessment order dated 31-3-1990. 6. In my opinion, requirement of justice cannot be sacrificed at altar of administrative convenience or celerity, for convenience and justice, as Lord Atkin felicitously put it, are often not on speaking terms. learned Judicial Member while deciding issue placed reliance on judgment of Hon'ble jurisdictional High Court rendered in case of Annamalai Finance Ltd. (supra). In this case there was sale and lease back of assets. Depreciation was claimed on actual cost. Hon'ble High Court has held that apparent consideration can be taken as cost of assets. learned Accountant Member declined to apply ratio of this decision on ground that there was k reason to suspect that consideration passed between parties was not real consideration. In arriving at this conclusion learned Accountant Member adumbrated on report of DVO. There is no other material in record to suggest that consideration passed between parties was not real consideration. number of items forming integral parts of machinery were not considered while arriving at value of machinery, therefore, on basis of valuation report, no inference can be drawn in regard to genuineness of transaction. value determined by DVO cannot be construed to be correct value. learned Judicial Member took construed to be correct value. learned Judicial Member took apparent consideration as true value of assets. I agree with decision of learned Judicial Member on this point. 7. Adverting now to second question apropos disallowance of depreciation of Rs. 12,87,500 on assets leased to M/s. Rajinder Pipes Ltd., I find that in original assessment assessee had claimed depreciation on suction blower with 10HP squired cage indicator motor and ducting systems bought from M/s. R.M. Machines (P.) Ltd., Kanpur for Rs. 51.50 lakhs and leased out to M/s. Rajinder Pipes Ltd., Mumbai. Assessing Officer disallowed assessee's claim on ground that as per his enquiry no machinery was actually manufactured by M/s. R.M. Machines (P.) Ltd. Besides, M/s. Rajinder Pipes Ltd. did not reflect in its accounts any plant and machinery acquired either through purchase or by lease during previous year 1994-95 onwards. Commissioner (Appeals) confirmed disallowance. Before Tribunal assessee did produce evidence in form of installation certificate from lessee, payment vouchers for leased assets, etc. According to learned Judicial Member factum as to existence of machinery was proved beyond shadow of doubt and no effort was taken by revenue to examine leased assets. No basic enquiry was made in this regard and claim for depreciation was disallowed on basis of surmises and suspicion. As such he allowed relief on this count, whereas learned Accountant Member followed order of Tribunal rendered for assessment year 1995-96 in ITA No. 1213(Mds.)/2000, dated 28-2-2006 in assessee's own case, wherein matter was set aside to Assessing Officer for fresh adjudication. Having regard to facts, in my opinion issue was rightly set aside to file of Assessing Officer for fresh adjudication. I, therefore, concur with decision of learned Accountant Member on this count. 8. last issue concerning ITA Nos. 1105 and 1106 (Mds.)/2005 relates t o addition made by Assessing Officer towards interest on transaction treated by Assessing Officer as loan transaction. It was contended on behalf of assessee that revenue authorities were not correct in treating lease transaction as finance transaction, ex consequenti adding notional interest on deemed loan transaction. Both parties agreed that this issue is consequential. Since in context of M/s. Ganesh Benzoplast majority decision is now in favour of assessee, no addition on this count is possible. However, in case of M/s. Rajinder Pipes Ltd. I have already agreed with learned Accountant Member that issue is to be examined afresh by Assessing Officer. This issue is consequential and as such it should be decided accordingly. Therefore, in regard to question No. 3 in context of M/s. Ganesh Benzoplast I agree with learned Judicial Member and in context of M/s. Rajinder Pipes Ltd. I agree with learned Accountant Member. 9. matter will now go before Regular Bench for deciding appeals in accordance with opinion of majority. ORDER Per N. Vijayakumaran, Judicial Member. above cross-appeals by revenue and assessee for assessment years 1995-96, 2000-01 and 2001-02 were originally heard on 6-3- 2007. On careful consideration of matter, we came to conclusion that t h e Departmental appeals in ITA Nos. 1218 to 1220/Mds./05 are to be dismissed. However, with regard to assessee's appeals in ITA Nos. 1104 to 1106/Mds./05 for very same assessment years there was difference of opinion amongst Members and accordingly following questions were referred for esteemed opinion of Third Member: 2. ITA No. 1104/Mds./2005: (1) Whether on facts and circumstances of case, CIT(A) is justified in confirming action of Assessing Officer in determining value of assets and recalculate depreciation which is subject-matter of lease transaction with M/s. Ganesh Benzoplast? (2) Whether on facts and circumstances of case, CIT(A) is justified in confirming action of Assessing Officer in disallowing claim of depreciation on asset leased to M/s. Rajinder Pipes Ltd., Mumbai? ITA Nos.1105 and 1106/Mds./05: Whether on facts and circumstances of case, CIT(A) is justified in confirming action of Assessing Officer in making addition towards interest on transaction treated by Assessing Officer as loan transaction? 3. With regard to first question in ITA No. 1104/Mds./2005 ld. Third Member agreed with Judicial Member, whereas he concurred with decision of Accountant Member in respect of second question. 4. For assessment years 2000-01 and 2001-02 there was yet another c o m m o n issue raised by revenue relating to estimated expenditure disallowed in earning income exempted under section 10(33) of Act. On this issue both Members agreed that common ground raised by revenue is to be dismissed. 5. In result, assessee's appeal in ITA No. 1104/Mds./05 for assessment year 1995-96 stands partly allowed. 6. In assessee's appeals in ITA Nos. 1105 and 1106/Mds./05 issue before ld. Third Member relates to addition made by Assessing Officer towards interest on transaction treated by Assessing Officer as loan transaction. contention of assessee was that revenue authorities were not correct in treating lease transaction as finance transaction, ex consequenti adding notional interest on deemed loan transaction. Both parties agreed before ld. Third Member that this issue is consequential. ld. Third Member came to conclusion that since in context of M/s. Ganesh Benzoplast majority decision is now in favour of assessee, no addition on this count is possible and he, accordingly, concurred with view taken by Judicial Member. However, in case of M/s. Rajinder Pipes Ltd. ld. Third Member agreed with Accountant Member and accordingly, expressed his opinion that issue is to be examined afresh by Assessing Officer. These two appeals by assessee are, accordingly, partly allowed. 7. In result, revenue's appeals in ITA Nos. 1218 to 1220/Mds./05 are dismissed and assessee's appeals in ITA Nos. 1104 to1106/Mds./05 are partly allowed. *** ASSISTANT COMMISSIONER OF INCOME TAX v. ASHOK LEYLAND FINANCE LTD.