Joint Commissioner of Incometax, LTU, Bengaluru. ... Respondent AND ITA No.1137/Bang/2014 (Assessment year: 200314) (by Revenue) Assessee by : Shri Sharath Rao, CA. Revenue by : Shri C.H.Sundar Rao, CIT(DR) Date of hearing : 07/02/2019 Date of pronouncement: 15/02/2019 O R D E R Per BENCH : These are cross appeals filed by the revenue and the assessee against the order of the CIT(A), LTU, Bengaluru, dated 30/06/2014 for the assessment years 200203 and 200304. Since the issues are common in both the appeals, they were heard together and disposed of by this common order. ITA No.1135 & 1137/Bang/20114 Page 2 of 26 2. For the sake of convenience, we shall take up the revenue's appeal in ITA No.1137/Bang/2014 and facts narrated. The revenue has raised the following grounds of appeal: 1. "Depreciation on assets given on finance lease in holding that the tax treatment in respect of the asset given on finance lease, the lessor continues to be the owner of the assets given on lease and is entitled to claim depreciation on the same. 2. Disallowance of provisions for warranty The Hon'ble CIT(A) erred in directing the AO to allow the provision for warranty. The jurisdictional ITAT has upheld the disallowance in the case of Microland Ltd Vs. CIT. 3. Disallowance of payment to nonresidents without TDS The Hon'ble CIT(A) erred in holding that both deduction and payment/deposit of tax deducted at source is applicable from 1/4/2004 and would not be applicable for A.Y.200203 and A.Y.200304. As per Sec.40a(i) no deduction shall be allowable in a case where the assessee has not deducted tax or after deduction of tax not paid sum before expiry of the time prescribed in Sec. 200(1) of the I T Act." 3. Brief facts of the case are that the assessee is erstwhile HewlettPackard India Sales Pvt. Ltd., and engaged in the Business of manufacturing and trading of computer equipment and accessories and rendering related services and filed the Return of income disclosing total income of Rs.2,21,59,35,340/ on 02/12/2003. Subsequently the case was selected for scrutiny and notice u/s 143(2) of the Incometax Act,1961 ['the Act' for short] was served on the assessee. A questionnaire was issued along with notice u/s 142(1) of the Act. In response, the learned AR of the assessee appeared from time to time and furnished the details. Whereas the assessee, vide letter dated 23/09/2005 raised the issue for jurisdiction of assessment and submitted that HewlettPackard India Sales Pvt. Ltd., amalgamated with M/s.Hewelett Packard India Sales Pvt. Ltd. ITA No.1135 & 1137/Bang/20114 Page 3 of 26 w.e.f. 01/04/2003 and the copies of amalgamation orders u/s 394 of the Companies Act passed by the Hon'ble High Courts of Delhi and Karnataka were filed. Whereas the AO, after considering the amalgamation order, came to unilateral conclusion that HewlettPackard India Sales Pvt. Ltd., stood dissolved without winding up and the amalgamated entity of HewlettPackard India Sales Pvt. Ltd ended on 31/03/2003 on the point of assumption of jurisdiction. Learned AO found similar objections were raised in proceedings of assessment year 200203 and whereas CIT(A) passed the order overlooking the objections and AO observed at page 4 para.2.7 of the order which reads as under: "2.7 It is pertinent to mention that for the appellate proceedings related to A.Y. 0203 similar objections were made before the CIT (A), that the assessee company has wound up thereby no legal juristic identity existed. While disposing the arguments, the Ld. CIT (A) relied on various case laws and emphasized on 292B of the I.T.Act, 1961. Accordingly, it was held that the proceedings aga