South Eastern Coal Fields Limited,, Bilaspur v. Addl.Commissioner of Income-Tax,Range-1,, Bilaspur

ITA 5/BIL/2012 | 2008-2009
Pronouncement Date: 06-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 524714 RSA 2012
Assessee PAN AADCS2066E
Bench Raipur
Appeal Number ITA 5/BIL/2012
Duration Of Justice 7 year(s) 9 month(s) 18 day(s)
Appellant South Eastern Coal Fields Limited,, Bilaspur
Respondent Addl.Commissioner of Income-Tax,Range-1,, Bilaspur
Appeal Type Income Tax Appeal
Pronouncement Date 06-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 06-11-2019
Assessment Year 2008-2009
Appeal Filed On 18-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH RAIPUR BEFORE SHRI ANIL CHATURVEDI AM AND SHRI PARTHA SARATHI CHAUDHU RY JM SL. NO. ITA NO. NAME OF APPELLANT NAME OF RESPONDENT ASST. YEAR 1 - 5 187 / JAB /20 08 188 / JAB /20 08 189 / JAB /20 08 190 / JAB /20 08 191 / JAB /20 08 SOUTH EASTERN COALFIELDS LTD. SEEPAT ROAD BILASPUR 495006 PAN: AADCS2066E ACIT CIRCLE 1(1) BILASPUR 1998 - 99 1999 - 2000 2000 - 01 2001 - 02 2002 - 03 6 173 / JAB /20 08 SOUTH EASTERN COALFIELDS LTD. SEEPAT ROAD BILASPUR 495006 PAN: AADCS2066E DCIT CIRCLE 1(1) BILASPUR 2004 - 05 7 - 8 174 / JAB /20 08 175 / JAB /20 08 SOUTH EASTERN COALFIELDS LTD. SEEPAT ROAD BILASPUR 495006 PAN: AADCS2066E ADDL.CIT RANGE 1 BILASPUR 2005 - 06 2006 - 07 9 05/BLPR/2012 SOUTH EASTERN COALFIELDS LTD. SEEPAT ROAD BILASPUR 495006 PAN: AADCS2066E ADDL.CIT RANGE 1 BILASPUR 2008 - 09 10 21/BLPR/2012 JCIT RANGE 1 BILASPUR SOUTH EASTERN COALFIELDS LTD. SEEPAT ROAD BILASPUR 495006 PAN: AADCS2066E 2006 - 07 11 03/BLPR/2012 JCIT RANGE 1 BILASPUR SOUTH EASTERN COALFIELDS LTD. SEEPAT ROAD BILASPUR 495006 PAN: AADCS2066E 2008 - 09 2 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. A SSESSEE BY : S /S HRI AJITK O RDE S.R. RAO ASHISHAGRAWAL AND R.P. SHUKLA REVENUE BY : SHRI R.K. SINGH / DATE OF HEARING : 04 . 11 .2019 /05.11.2019 / DATE OF PRONOUNCEMENT : 06 .11 .2019 / ORDER PER BENCH : IN THESE BUNCH OF APPEALS NINE APPEALS ARE PREFERRED BY THE ASSESSEE AND ONE APPEAL IS PREFERRED BY THE REVENUE WHICH EMANATE S FROM THE RESPECTIVE ORDER S OF THE LD. CIT(A) RELATING TO THE CAPTIONED ASSESSMENT YEARS. 2. TH ESE BUNCH OF APPEALS WERE HEARD TOGETHER AND S INCE FACTS AND ISSUES ARE SIMILAR IN ALL THE SE APPEALS THE Y ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. FIRST WE TAKE UP THE APPEAL IN ITA NO.187/JAB/2008 FOR ASSESSMENT YEAR 1998 - 99 AS THE LEAD CASE FOR ADJUDICATION. ITA NO.187/JAB/2008 A.Y. 1998 - 99 3. IN ITA NO.187/JAB/2008 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 3 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 1(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)/147 DATED 27 TH MARCH 2006 WAS BAD IN LAW AB INITIO VOID AND LIABLE TO BE STRUCK DOWN. 1(B) THAT ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE ASSESSING HAS NOT SATISFIED THE PRE - CONDITIONS MENTIONED IN SECTION 147 AND 148 OF THE ACT BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE ACT. 1(C) THAT ON THE FACTS AND IN TIRE CIRCUMSTANCES OF THE CASE THE CIT(APPEALS) ERRED IN UPHOLDING TIRE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION/ DISALLOWANCES ON THE OTHER ISSUES WHICH WERE NOT THE SUBJECT M ATTER FOR THE INITIATION OF REASSESSMENT PROCEEDINGS. 2(A) THAT ON THE F ACTS AND CIRCUMSTANCES OF THE CASE TIRE LEARNED CIT (APPEALS) ERRED IN CONFIRMING 50% OF THE EXPENDITURE DISALLOWED BY TIRE ASSESSING OFFICER AMOUNTING TO RS.51 08 050/ - INCURRED ON ASSETS NOT BELONGING TO THE COMPANY. 2(B) THAT ON THE FACTS AND CIRCUMST ANCES OF THE CASE THE ACTION OF THE LEARNED CIT / (APPEALS) IN CONFIRMING 50% OF THE DISALLOWANCE HAS NO BASIS WHATSOEVER AND THE SAME HAS BEEN MADE ON AN AD - HOC BASIS. 3(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TIRE LEARNED CIT(APPEALS ) ERRED IN CONFIRMING DISALLOWANCE UPTO 25% OF T HE EXPENDITURE AMOUNTING TO RS. 25 40 64 757/ - INCURRED ON COAL TRANSPORTATION PAID BY THE COMPANY TO THE EX - SERVICE MEN TRANSPORT COMPANIES. 3(B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE L EARNED CIT(APPEALS) ERRED IN NOT APPRECIATING THAT THE SAID EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. 3(C) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ACTION OF THE LEARNED CIT(APPEA LS) IN CONFIRMING DISALLOWANCE UPTO 25% OF THE EXPENDITURE HAS NO BASIS WHATSOEVER AND THE SAME HAS BEEN MADE ON AN AD - HOC BASIS. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NO INTEREST UNDER SECTION 220(2) IS CHARGEABLE IN THE PRESENT CASE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND/OR ALTER AMEND MODIFY OR RESCIND THE GROUNDS HEREIN ABOVE BEFORE OR AT THE HEARING OF THIS APPEAL. 4 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 4. AT THE OUTSET THE LD. AR FOR THE ASSESSEE SUBMITTED THAT GROUND NOS.1 AND 4 RAISED BY ASSESSEE ARE LIABLE TO BE DISMISSED FOR WANT OF COD APPROVAL. THEREFORE GROUND NOS.1 AND 4 RAISED BY ASSESSEE ARE DISMISSED ON THIS COUNT. 5 . BOTH THE PARTIES ADMITTE D THAT THE ISSUE RAISED IN GROUND NO.2 IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF T RIBUNAL IN THE GROUP OF ASSESSEES OWN CASES WITH LEAD ORDER IN ITA NO.141/NAG/2001 FOR ASSESSMENT YEAR 1997 - 98 ORDER DATED 10.05.2019. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THAT THE TRIBUNAL IN ITA NO. 141/NAG/2001 (SUPRA) IN PARAS 91 TO 97 HAD ALLOWED THE CLAIM OF ASSESSEE OF EXPENSES INCURRED ON THE ASSETS NOT OWNED BY ASSESSE . THE RELEVANT FINDINGS OF TRIBUNAL ARE AS UNDER: - 96. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO DISALLOWANCE OF BUSINESS EXPENDITURE BEING REPAIR AND MAINTENANCE OF ASSETS NOT BELONGING TO THE ASSESSEE. IT IS AN UNDISPUTED FACT THE ASSESSEE HAS INCURRED THE EXPENSES ON THE ASSETS WHICH DOES NOT BELONG TO THE ASSESSEE. HOWEVER IT IS ASSESSEES CONTENTION THAT BY INCURRING THE EXPENSES ON SUCH ASSETS ASSESSEE IS ALSO BENEFITED AND SUCH EXPENSES HELPS IN THE BUSINESS OF THE ASSESSEE. THE AFORESAID CONTENTIONS OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE BY PLACING ANY MATERIALS ON RECORD. WE FURTHER FIND THAT THE KOLKATA BENCH OF TRIBUNAL IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX VS. INTEGRATED COAL MINING LT D. (SUPRA) AFTER RELYING ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF L.H. SUGAR FACTORY & OIL MILLS (P.) LTD. (SUPRA) AND ON SIMILAR ISSUE HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER : 5 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 10. WE HAVE HEARD RIVAL CONTENTIONS AN D GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE GENUINENESS OF EXPENDITURE IS NOT DOUBTED BY THE REVENUE. ONLY DISPUTE IS THAT THE LINK ROAD CONSTRUCTED BY THE ASSESSEE BELONGS TO ZILLAPARISHAD AND FOR THEIR USE. ACCORDING TO THE RE VENUE IT IS A COINCIDENCE THAT THE ASSESSEE WILL USE THIS ROAD FOR TRANSPORTATION AS ANY OTHER ROAD BELONGING TO THE GOVERNMENT. WE FIND THAT ASSESSEE HAD NO DOUBT INCURRED EXPENDITURE ON UP - GRADATION/CONSTRUCTION OF LINK ROAD BY MAKING CONTRIBUTION TO BURDWANZILLAPARISHAD FROM BARABANI RAILWAY STATION TO MINES OF THE ASSESSEE AT SARASHATALI WEST BENGAL. WHETHER THIS IS A BUSINESS EXPENDITURE OR NOT? WE FIND THAT THIS ISSUE HAS BEEN ANSWERED BY HONBLE APEX COURT IN THE CASE OF L. H. SUGAR FACTORY & OILS MILLS (P) LTD. VS. CIT (1980) 125 ITR 293 (SC) WHEREIN THE APEX COURT AT PAGES 297 AND 299 HAS HELD AS UNDER: THE AMOUNT OF RS. 50 000 WAS CONTRIBUTED BY THE ASSESSEE UNDER THE SUGARCANE DEVELOPMENT SCHEME TOWARDS MEETING THE COST OF CONSTRUCTION OF ROADS IN THE AREA AROUND THE FACTORY. NOW THERE CAN BE NO DOUBT THAT THE CONSTRUCTION OF ROADS IN THE AREA AROUND THE FACTORY WAS CONSIDERABLY ADVANTAGEOUS TO THE BUSINESS OF THE ASSESSEE BECAUSE IT FACILITATED THE RUNNING OF ITS MOTOR VEHICLES FOR T RANSPORTATION OF SUGARCANE SO NECESSARY FOR ITS MANUFACTURING ACTIVITY. IT IS NOT AS IF THE AMOUNT OF RS. 50 000 WAS CONTRIBUTED BY THE ASSESSEE GENERALLY FOR THE PURPOSE OF CONSTRUCTION OF ROADS IN THE STATE OF UTTAR PRADESH BUT IT WAS FOR THE CONSTRUCT ION OF ROADS IN THE AREA AROUND THE FACTORY THAT THE CONTRIBUTION WAS MADE AND IT CANNOT BE DISPUTED THAT IF THE ROADS ARE CONSTRUCTED AROUND THE FACTORY AREA THEY WOULD FACILITATE THE TRANSPORT OF SUGARCANE TO THE FACTORY AND THE FLOW OF MANUFACTURED SUG AR OUT OF THE FACTORY. THE CONSTRUCTION OF THE ROADS WAS THEREFORE CLEARLY AND INDUBITABLY CONNECTED WITH THE BUSINESS ACTIVITY OF THE ASSESSEE AND IT IS DIFFICULT TO RESIST THE CONCLUSION THAT THE AMOUNT OF RS. 50 000 CONTRIBUTED BY THE ASSESSEE TOWARD S MEETING THE COST OF CONSTRUCTION OF THE ROADS UNDER THE SUGARCANE DEVELOPMENT SCHEME WAS LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THESE ROADS WERE UNDOUBTEDLY ADVANTAGEOUS TO THE BUSINESS OF THE ASSESSEE AS THE Y FACILITATED THE TRANSPORT OF SUGARCANE TO THE FACTORY AND THE OUTFLOW OF MANUFACTURED SUGAR FROM THE FACTORY TO THE MARKET CENTRES. THERE CAN BE NO DOUBT THAT THE CONSTRUCTION OF THESE ROADS FACILITATED THE BUSINESS OPERATIONS OF THE ASSESSEE AND ENABLE D THE MANAGEMENT AND CONDUCT OF THE ASSESSEE'S BUSINESS TO BE CARRIED ON MORE EFFICIENTLY AND PROFITABLY. IT IS NO DOUBT TRUE THAT THE ADVANTAGE SECURED FOR THE BUSINESS OF THE ASSESSEE WAS OF A LONG DURATION INASMUCH 6 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. AS IT WOULD LAST SO LONG AS THE ROADS CONTINUED TO BE IN MOTORABLE CONDITION BUT IT WAS NOT AN ADVANTAGE IN THE CAPITAL FIELD BECAUSE NO TANGIBLE OR INTANGIBLE ASSET WAS ACQUIRED BY THE ASSESSEE NOR WAS THERE ANY ADDITION TO OR EXPANSION OF THE PROFIT - MAKING APPARATUS OF THE ASSESSEE. THE AMOUNT OF RS. 50 000 WAS CONTRIBUTED BY THE ASSESSEE FOR THE PURPOSE OF FACILITATING THE CONDUCT OF THE BUSINESS OF THE ASSESSEE AND MAKING IT MORE EFFICIENT AND PROFITABLE AND IT WAS CLEARLY AN EXPENDITURE ON REVENUE ACCOUNT. 11. WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF L. H. SUGAR FACTORY & OILS MILLS (P) LTD. (SUPRA) WHEREIN HONBLE APEX COURT NOTED THAT THE ASSESSEE A SUGAR MANUFACTURER CONTRIBUTED TO THE STATE OF UTTAR PRADESH A SUM OF RS.50 000/ - FOR CONSTRUCTION OF A ROAD AROUND ITS FACTORY FOR FACILITATING THE TRANSPORT OF SUGARCANE INTO THE FACTORY AND THE OUTFLOW OF MANUFACTURED SUGAR FROM THE FACTORY TO THE MARKET CENTRES. CONTRIBUTIONS WERE ALSO MADE FOR CONSTRUCTION OF THE SAID ROAD WHICH BELONGED TO THE UTTAR PRADESH STATE GOVERNMENT BY THE CENTRAL GOVERNMENT AND THE STATE GOVERNMENT EQUALLY. THE EXPENDITURE OF RS.50 000/ - INCURRED BY ASSESSEE IN THAT CASE TOWARDS CONTRIBUTION FOR CONSTRUCTION OF A ROAD AROUND ITS FACT ORY IS AN EXPENDITURE IN THE REVENUE FIELD AS IT WAS INCURRED FOR THE PURPOSE OF FACILITATING THE CONDUCT OF THE BUSINESS OF THE ASSESSEE AND MAKING IT MORE EFFICIENT AND PROFITABLE WITHOUT THE ASSESSEE GETTING AN ADVANTAGE OF AN ENDURING BENEFIT TO ITSEL F. WE FIND THAT IN THE PRESENT CASE ALSO THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS MADE THE CONTRIBUTION OF RS.3.57 CRORES DURING THE RELEVANT PREVIOUS YEAR TO BURDWANZILLAPARISHAD FOR THE PURPOSE OF UP - GRADATION/CONSTRUCTION OF A LINK ROAD F ROM ITS MINES AT SARASTHALI TO THE BARABANI RAILWAY STATION IN ORDER TO FACILITATE TRANSPORTATION OF COAL MINED SO THAT THE BUSINESS OF THE ASSESSEE COULD BE CONDUCTED MORE EFFICIENTLY AND PROFITABLY. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE SAID ROA D IS A PUBLIC ROAD AND BELONGS TO THE BURDWANZILLAPARISHAD AND THE ASSESSEE IS NOT OWNER OF THE ROAD. IN VIEW OF THE SETTLED POSITION ON THE ISSUE WE FIND THAT THE SUM OF RS.3.57 CR. INCURRED DURING THE RELEVANT PREVIOUS YEAR BY THE ASSES `SEE TOWARDS CO NTRIBUTION FOR UP - GRADATION/CONSTRUCTION OF THE LINK ROAD BELONGING TO THE BURDWANZILLAPARISHAD IS ALLOWABLE AS REVENUE EXPENDITURE IN THE YEAR UNDER APPEAL HAVING BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE COMPANY. WE AC CORDINGLY UPHOLD THE ORDER OF CIT(A) ALLOWING THE CLAIM OF DEDUCTION OF THE SUM OF RS.3.57 CR. AS REVENUE EXPENDITURE. THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. 97. WE ARE OF THE VIEW THAT THE ISSUE IN THE PRESENT CASE IS IDENTICAL TO THAT OF K OLKATA BENCH OF THE TRIBUNAL CITED HERE - IN - ABOVE. FURTHER BEFORE US 7 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. REVENUE HAS NOT POINTED OUT ANY CONTRARY BINDING DECISION IN ITS SUPPORT. WE THEREFORE RELYING ON THE AFORESAID DECISION OF KOLKATA BENCH OF THE TRIBUNAL HOLD THAT THE ASSESSEE IS ELIG IBLE FOR DEDUCTION OF EXPENSES INCURRED ON THE ASSETS NOT OWNED BY ASSESSE AND THUS THE GROUND NO. 4 OF THE ASSESSEE IS ALLOWED. THE FACTS AND ISSUES ARE SIMILAR TO THE FACTS AND ISSUES BEFORE THE TRIBUNAL IN THE AFORESAID CASE AND FOLLOWING THE SAME PARITY OF REASONING WE ALLOW THE CLAIM OF ASSESSEE. THUS GROUND NO.2 RAISED BY ASSESSEE IS DECIDED ACCORDINGLY. 7 . THE GROUND NO.3 PERTAINS TO THE EXPENDITURE INCURRED ON COAL TRANSPORTATION PAID BY THE COMPANY TO THE EX - SERVICEMEN TRANSPORT COMPANIES. 8. THE LD. AR SUBMITTED THAT THOUGH THIS GROUND WAS EARLIER RESTORED BACK TO THE FILE OF ASSESSING OFFICER BY THE TRIBUNAL VIDE ITS ORDER DATED 10.05.2019 BUT FOR THIS YEAR FACTS ARE DIFFERENT SINCE THEY HAVE SUBMITTED THE RELEVANT DETAILS OF ESM COMPANIES AND THE VARIOUS RATES AND CHARGES PERTAINING THERETO. THIS FACT WAS HIGHLIGHTED FROM THE ORDER OF ASSESSING OFFICER. 9. PER CONTRA THE LD. DR IN SUPP ORT OF THE FINDINGS RECORDED IN EARLIER ORDER OF TRIBUNAL DATED 10.05.2019 SUBMITTED THAT THE ISSUES SINCE THEY HAVE BEEN REMITTED BACK TO THE FILE OF ASSESSING OFFICER ARE TECHNICALLY 8 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. OPEN FOR ADJUDICATION AND IT IS NOT ONLY THE CASE OF TDS REGARDING ESM COMPANIES BUT AS WELL AS THE GENUINENESS OF TRANSACTIONS THAT HAS TO BE LOOKED INTO AFRESH. FOR THIS PURPOSE THE DECISION OF TRIBUNAL REMITTING THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER THEREFORE IS CORRECT. 10 . WE HAVE HEARD THE RIVAL CONTEN TIONS AND PERUSED THE CASE RECORD S . BEFORE US THE LD. AR TRIED TO POINT OUT THE DISTINCT IVE FEATURES IN THE FACTS OF THE YEAR UNDER CONSIDERATION AND THAT OF THE EARLIER YEAR. HOWEVER WE ARE OF THE VIEW THAT DISTINCT FEATURES ARE NOT SO GLARING WHICH W OULD NECESSITATE AS TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY US IN EARLIER YEAR . THAT APART THE CIT(A) WHILE DECIDING THE ISSUE HAS ALSO CATEGORICALLY GIVEN A FINDING IN THE ORDER THAT THE NECESSARY DETAILS WERE NOT FILED BY ASSESSEE AND THIS FACT HAS NOT BEEN CONTROVERTED BY THE LD. AR BEFORE US. WE FIND THAT IN ORDER OF T RIBUNAL (SUPRA) IN PARAS 107 TO 112 HAD SIMILARLY REMITTED THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER. THE RELEVANT FINDINGS OF TRIBUNAL ARE AS UNDER: - 112. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. THE RECORDS SUGGEST THAT NO DOCUMENTARY EVIDENCES AS CALLED FOR BY THE ASSESSING OFFICER WERE FILED BY THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE ASSESSING OFFICER IS NOT DEFINITELY AN AUTHORITY TO SAY TO THE ASSESSEE HOW TO RUN ITS BUSINESS BUT AT THE SAME TIME THE ASSESSING OFFICER IS A RESPONSIBLE CUSTODIAN OF REVENUE TO EXAMINE CONSIDER OR JUDGE THE VARIOUS ASPECTS OF THE EXPENDITURE CLAIMED BY THE ASSESSEE TO COME TO THE CONCLUSION WHETHER EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES OR OTHERWISE EVEN PARTIAL. IN THE ABSENCE OF COMPLETE AND VERIFIABLE DETAILS THE REVENUE AUTHORITIES CANNOT VERIFY THE GENUINENESS OF TRANSACTIONS OF A PA RTICULAR EXPENDITURE WHICH HAS HAPPENED 9 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. EXACTLY IN THE PRESENT CASE. THE LD. AR OF THE ASSESSEE SUBMITTED THAT TDS HAS BEEN DEDUCTED U/S.194C OF THE ACT FOR ALL THESE PAYMENTS. BUT NEITHER BEFORE THE REVENUE AUTHORITIES NOR BEFORE US ANY DOCUMENTARY EVIDE NCES CO - RELATING TDS U/S. 194C VIS - - VIS PAYMENTS MADE TO ESM COMPANIES WERE FURNISHED. FURTHER NO COPIES OF INCOME TAX RETURNS OF THESE ESM COMPANIES WERE FILED BEFORE US. ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF ANY TRANSACTION NOT ONLY VER BALLY BUT ALSO BY RELEVANT DOCUMENTS PLACED ON RECORD WHICH IN THIS CASE THE ASSESSEE HAS NOT DONE. WE FIND THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. S.G. EXPORTS IN ITA NO.624 OF 2010 HAS HELD THAT A PERUSAL OF THE FINDINGS OF THE CIT(A) AND THE TRIBUNAL SHOWS THAT BOTH THE AUTHORITIES HAVE PLACED ONUS ON THE REVENUE TO ESTABLISH THE IN - GENUINENESS AND NON - EXISTENCE OF THE PARTIES. ACCORDING TO THE HONBLE HIGH COURT THIS FINDING IS WRONG SINCE THE ASSESSEE WHO HAS CLAIMED THAT IT HAD INCURRED EXPENSES ON ACCOUNT OF LABOUR CHARGES THEREFORE THE ONUS IS ON THE ASSESSEE TO PROVE THE SAID FACTS BY PRODUCING COGENT AND CONVINCING EVIDENCES INCLUDING THE IDENTITY OF THE PARTIES ALONG WITH EVIDENCE OF PAYMENT TO THOSE PERSONS. REVERTING TO THE FACTS OF THE PRESENT CASE THE ASSESSEE HAS STATED THAT THEY HAVE EMPLOYED ESM COMPANIES AND HAVE MA DE PAYMENT TO THEM AND HAS ALSO DEDUCTED TDS AND ITS NECESSARY DEPOSIT TO THE GOVERNMENT ACCOUNT HAS BEEN COMPLETED. THE ONUS IS ON THE ASSESSE TO PROVE THESE STATEMENTS. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF LAXMINARAYANMADANLALVS . CIT (SC) 8 6 ITR 439 HAS HELD THAT MERE EXISTENCE OF AGREEMENT BETWEEN THE ASSESSEE AND ITS AGENT DOES NOT PROVE THE GENUINENESS OF THE TRANSACTIONS IN A PARTICULAR CASE. IT ALL DEPENDS ON FACTS AND CIRCUMSTANCES OF EACH CASE AND THE REVENUE AUTHORITIES IS BOUND TO L OOK INTO THE GENUINENESS OF THE TRANSACTION IN EACH OF THE CASE. THE HONBLE DELHI HIGH COURT IN THE CASE OF GOODYEAR INDIA LTD. VS COMMISSIONER OF INCOME - TAX REPORTED AS 246 ITR 116 HAS HELD THAT EVEN IF THERE IS AN AUDIT REPORT FILED BY THE ASSESSEE TH AT DOES NOT PREVENT THE ASSESSING OFFICER TO ASK FOR RELEVANT DOCUMENTARY EVIDENCES AND DETAILS FROM THE ASSESSEE TO CHECK THE GENUINENESS OF THE TRANSACTION AND THE ENTIRE CONDUCT OF THE ASSESSEE. IN THE PRESENT CASE BEFORE US WHEN THE ASSESSING OFFICER CALLED FOR RELEVANT DOCUMENTARY EVIDENCES REGARDING IDENTITY RATES AND GENUINENESS OF THE TRANSACTIONS WITH REGARD TO ESM COMPANIES THE ASSESSEE HAS NOT FURNISHED REQUISITE DETAILS BEFORE THE ASSE SSING OFFICER AND THAT FOR THE REASONS AS OPINED BY THE HONBLE DELHI HIGH COURT THE POWER TO CALL FOR DETAILS IS AN INHERENT POWER WITH THE ASSESSING OFFICER WITHIN THE SCHEME OF INCOME TAX ACT. THAT FURTHER THE CLAIM OF TDS DEDUCTION U/S.194C OF THE ACT BY THE ASSESSEE NO EVIDENCE WAS FURNISHED BEFORE US TO DEMONSTRATE THE PAYMENT OF TAXES AFTER TDS DEDUCTION. 10 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. IN VIEW OF THE MATTER WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICE R TO VERIFY WHETHER NECESSARY TDS HAVE BEEN DEDUCTED AND OTHER ISSUES REGARDING THE GENUINENESS OF THE TRANSACTIONS. NEEDLESS TO SAY THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH LAW AND ADJUDICATE THE ISSUE AFRESH. THE ASSESSE IS DIRECTED TO FURNISH REQUISITE DOCUMENTS /DETAILS BEFORE THE ASSESSING OFFICER AS CALLED FOR BY THE ASSESSING OFFICER. IN CASE THE ASSESSEE FAILS TO FURNISH NECESSARY DOCUMENTS THE ASSESSING OFFICER SHALL BE AT LIBERTY TO DECIDE THE ISSUE AS PER MATERIALS AVAILABLE ON RECORD. HENCE GROUND NOS.5 AND 6 RAISED IN APPEAL BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . 11. SINCE THE ISSUES ARE COMMON AND PARTIES ARE ALSO SIMILAR AND THE VERY FACT THAT GENUINENESS OF TR ANSACTION I S IN DOUBT AND IS NOT CLEAR EVEN IN THE RELEVANT ASSESSMENT YEAR AND SINCE NO EVIDENCE S WERE BROUGHT ON RECORD BY THE LD. AR FOR THE ASSESSEE THEREFORE IN THE INTEREST OF JUSTICE THE MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER MAINTAINING THE SAME PARITY IN JUSTICE FOR DETERMINING THE ALLOWABILITY OF EXPENSES AS DIRECTED IN OUR EARLIER ORDER. WE ORDER ACCORDINGLY. THUS GROUND NO. 3 RAISED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 12. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO.187/JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.188/JAB/2008 A.Y. 1999 - 2000 13. THE GROUNDS RAISED IN ITA NO.188/JAB/2008 ARE SIMILAR TO THE GROUNDS RAISED IN ITA NO.187/JAB/2008 . SINCE FACTS AND ISSUE ARE 11 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. SIMILAR OUR DECISION RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.188/JAB/2008. ACCORDINGLY APPEAL OF THE ASSESSEE IN ITA NO.18 8 /JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.189/JAB/2008 A.Y. 2000 - 01 14. THE GROUND NOS.1 3 AND 4 RAISED IN ITA NO.189/JAB/2008 ARE SIMILAR TO THE GROUND NO.1 AND 4 RAISED IN ITA NO.187/JAB/2008. SINCE FACTS AND ISSUE ARE SIMILAR OUR DECISION RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.189/JAB/200 8 ON THIS ISSUE. THUS GROUND NOS.1 3 AND 4 RAISED BY ASSESSEE ARE DISMISSED. 15. THE ISSUE RAISED IN GROUND NO.2 IS WITH REGARD TO DISALLOWANCE OF 25% OF EXPENDITURE ON COAL TRANSPORTATION PAID TO ESM COMPANIES. 16. BOTH THE PARTIES FAIRLY ADMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) WHICH IS SIMILAR TO THE GROUND NO.3 RAISED IN ITA NO.187/JAB/2008. THEREFORE OUR DECISION RENDERED IN ITA NO.187/JAB/2008 ON THIS ISSUE SHALL APPLY MUTATIS MUTANDIS TO THE GROUND NO.2 IN ITA NO.189/JAB/2008. ACCORDINGLY 12 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. APPEAL OF THE ASSESSEE IN ITA NO.18 9 /JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.190/JAB/2008 A.Y. 2001 - 02 17. THE GROUND NO.1 RAISED IN ITA NO.190/JAB/2008 IS SIMILAR TO THE GROUND NO.1 AND 4 RAISED IN ITA NO.187/JAB/2008. SINCE FACTS AND ISSUE ARE SIMILAR OUR DECISION RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.190/JAB/2008 ON THIS ISSUE. THUS GROUND NO.1 RAISED BY ASSESSEE IS DISMISSED. 18. THE ISSUE RAISED IN GROUND NO.2 IS WITH REGARD TO DISALLOWANCE OF 25% OF EXPENDITURE ON COAL TRANSPORTATION PAID TO ESM COMPANIES. 19. BOTH THE PARTIES FAIRLY ADMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) WHICH IS SIMILAR TO THE GROUND NO.3 RAISED IN ITA NO.187/JAB/2008. THEREFORE OUR DECISION RENDERED IN ITA NO.187/JAB/2008 ON THIS ISSUE SHALL APPLY MUTATIS MUTANDIS TO THE GROUND NO.2 IN ITA NO.190/JAB/2008. ACCORDINGLY APPEAL OF THE ASSESSEE IN ITA NO.1 90 /JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 13 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. ITA NO.191/JAB/2008 A.Y. 2002 - 03 20. THE GROUND NOS.1 3 4 AND 5 RAISED IN ITA NO.191/JAB/2008 IS SIMILAR TO THE GROUND NO.1 AND 4 RAISED IN ITA NO.187/JAB/2008. SINCE FACTS AND ISSUE ARE SI MILAR OUR DECISION RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.191/JAB/2008 ON THIS ISSUE. THUS GROUND NO S .1 3 4 AND 5 RAISED BY ASSESSEE ARE DISMISSED. 21. THE ISSUE RAISED IN GROUND NO.2 IS WITH REGARD TO DISALLOWANCE OF 25% OF EXPENDITURE ON COAL TRANSPORTATION PAID TO ESM COMPANIES. 22. BOTH THE PARTIES FAIRLY ADMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) WHICH IS SIMILAR TO THE GROUND NO.3 RAISED IN ITA NO.187/JAB/2008. THEREFORE OUR DECISION RENDERED IN ITA NO.187/JAB/2008 ON THIS ISSUE SHALL APPLY MUTATIS MUTANDIS TO THE GROUND NO.2 IN ITA NO.191/JAB/2008. ACCORDINGLY APPEAL OF THE ASSESSEE IN ITA NO.1 91 /JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.173/JAB/2008 A.Y. 2004 - 05 23. IN ITA NO.173/JAB/2008 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 14 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 1(A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN NOT ALLOWING AN AMOUNT OF RS.5 30 97 000/ - REPRESENTING EXPENSES INCURRED ON REHABILITATION OF PEOPLE/VILLAGERS & PAYMENTS TO STATE GOVERNMENT FOR OBTAINING USE OF LAND FOR MINING PURPOSE FOR A LIMITED PE RIOD. 1(B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ERRED IN NOT APPRECIATING THAT EXPENDITURE REPRESENTS PAYMENTS MADE TO STATE GOVERNMENT FOR OBTAINING USE OF LAND FOR MINING PURPOSE FOR A LIMITED PERIOD IS AN ALLOWABLE REVENUE EXPENDITURE. 1(C) WITHOUT PREJUDICE TO THE ABOVE GROUNDS NO. 1(A) & 1(B) THE LEARNED CIT(APPEALS) SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW INCOME TAX DEPRECIATION ON SUCH EXPENDITURE. 1(D) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(APPEALS) ERRED IN NOT APPRECIATING THAT EXPENSES INCURRED ON REHABILITATION OF PEOPLE/VILLAGERS IS REVENUE IN NATURE AND HENCE ALLOWABLE. 2(A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ERRED IN CONFIRMIN G 50% OF THE EXPENDITURE DISALLOWED BY THE ASSESSING OFFICER AMOUNTING TO RS.24 000/ - INCURRED ON ASSETS NOT BELONGING TO THE COMPANY. 2(B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ACTION OF THE LEARNED CIT(APPEALS) IN CONFIRMING 50% OF THE DI SALLOWANCE HAS NO BASIS WHATSOEVER AND THE SAME HAS BEEN MADE ON AN AD - HOC BASIS. 3(A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING DISALLOWANCE UPTO 25% OF THE EXPENDITURE AMOUNTING TO RS.33 05 75 547/ - IN CURRED ON COAL TRANSPORTATION PAID BY THE COMPANY TO THE EX SERVICE MEN TRANSPORT COMPANIES. 3(B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ERRED IN NOT APPRECIATING THAT THE SAID EXPENDITURE HAS BEEN INCURRED WHOLLY AND E XCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. 3(C) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) IN CONFIRMING DISALLOWANCE UPTO 25% OF THE EXPENDITURE HAS NO BASIS WHATSOEVER AND THE SAME HAS BEEN MADE ON AN ADHOC B ASIS. 15 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE INTEREST CHARGED UNDER SECTION 234C SHOULD BE ON RETURNED INCOME AND NOT ON ASSESSED INCOME. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND OR ALTER AMEND MODIFY OR RESCIND THE GROUNDS HEREINABOVE BEFORE OR AT THE HEARING OF THIS APPEAL. 24. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST DENIAL OF BUSINESS EXPENSES TO A SUM OF RS.5 30 97 000/ - REPRESENTING EXPENDITURE ON PAYMENT TO STATE GOVERNMENT AND REHABILITATION OF PEOPLE FOR USE OF THE LAND FOR MINING FOR A LIMITED PERIOD OF TIME. WE FIND THAT THE TRIBUNAL IN THE ORDER DATED 10.05.2019 (SUPRA) IN PARAS 5 TO 11 HAS DEALT WITH THE SAID ISSUE. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - 11. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS AND GIVEN CONSIDERABLE THOUGHT TO THE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US ON RECORD. THAT WHILE PERUSING THE ORDER OF THE LD. CIT(APPEALS) WE FIND THAT HE HAS STATED THEREIN THAT HIS ISSUE WAS ALREADY DECIDED AGAINST TH E ASSESSEE FOR ASSESSMENT YEAR 1989 - 90 AND 1996 - 97. THAT ALL THE CASES LAWS RELIED ON BY THE ASSESSEE ARE SUBSTANTIALLY DISTINGUISHABLE ON FACTS AND THEREFORE IS OF NO HELP TO THE ASSESSEE. THE PRINCIPLE IMBIBED IN THE RATIO LAID DOWN BY THE HONBLE SUPRE ME COURT IN THE CASE OF ARVIND MILLS LTD. VS. CIT (1992) 197 ITR 422 WHEREIN IT HAS BEEN HELD THAT CAPITAL EXPENDITURE WOULD NOT BECOME REVENUE EXPENDITURE SIMPLY BY REASONS OF THE FACT THAT IT WAS INCURRED IN CONNECTION WITH BUSINESS ACTIVITIES WHICH ULTI MATELY RESULTED IN EFFICIENTLY CARRYING ON THE DAY TO DAY BUSINESS. ENDURING NATURE DOES NOT NECESSARILY MEAN THAT THE BENEFIT IS DERIVED FOR A VERY LONG PERIOD OF TIME. EVEN IF AN ASSET HAS A LIFE OF FIVE YEARS THE EXPENDITURE INCURRED FOR ACQUIRING THE SAME IS A CAPITAL EXPENDITURE EVEN THOUGH THE ASSET HAS TO BE REPLACED AFTER FIVE YEARS AND IN THAT CASE THE PERIOD OF FIVE YEARS IS LONG ENOUGH TO QUALIFY AS ONE BRINGING THE ASSET OF ENDURING BENEFIT AND IN THAT CASE IT HAS TO BE TREATED AS A CAPITAL EXPENDITURE AND NOT AS A REVENUE EXPENDITURE. 16 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. FURTHER WE OBSERVE IN ASSESSEES OWN CASE IN ITA NO.18 - 22/NAG/2001 DATED 28.02.2001 WHEREIN THIS ISSUE WAS DISCUSSED BY CO - ORDINATE BENCH OF TRIBUNAL AND OBSERVED AS FOLLOWS: 11.7. BEFORE US THE LEARNED C OUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF R.J. TRIVEDI (SUPRA) WHEREIN THE EXPENDITURE WAS INCURRED BY THE ASSESSEE ON FAULT - STONE CUTTING OPERATION IN ORDER TO REMOVE THE OBSTRUCTION IN THE COURSE OF MINING OPERATION AND CONSIDERING THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO CARRY ON THE MINING OPERATION WITHOUT REMOVING THE SAID OBSTRUCTION THE HONBLE APEX COURT FOUND THE SAID EXPENDITURE INCURRED BY THE ASSESSEE WAS TO FACILITATE MINING ACTIVITIES AND T HEREFORE TREATED THE SAME AS REVENUE IN NATURE. IN THE PRESENT CASE THERE WAS NO SUCH OBSTRUCTION IN CARRYING ON THE MINING OPERATION OF THE ASSESSEE AND THE EXPENDITURE WAS INCURRED BY THE ASSESSEE TO RELOCATE AND REHABILITATE THE VILLAGES IN ORDER TO A CQUIRE A RIGHT TO POSSESSION IN THE LEASEHOLD LAND TO FACILITATE THE ENJOYMENT OF SURFACE RIGHTS IN RESPECT OF THE LEASEHOLD LAND. WE ARE THEREFORE OF THE OPINION THAT THE PRESENT CASE IS DISTINGUISHABLE ON FACTS FROM THE CASE OF R.J. TRIVEDI (SUPRA) AND THEREFORE THE SAID DECISION CANNOT HELP THE ASSESSEES CASE. RELIANCE WAS ALSO PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOTAN LIME SYNDICATE V. CIT (SUPRA) WHEREIN THE PAYMENT OF ROYALTY WAS MAD E BY THE ASSESSEE IN RELATION TO THE RAW MATERIAL I.E. LIMESTONE TO BE OBTAINED FROM MINES TAKEN ON LEASE AND THE SAME WAS NOT REFERABLE TO THE ACQUISITION OF THE MINING LEASE. CONSIDERING THESE FACTS THE HONBLE APEX COURT FOUND THE SAID EXPENDITURE INC URRED IN RELATION TO THE RAW MATERIAL WHICH WAS GOING TO BE EXCAVATED OR EXTRACTED BY THE ASSESSEE AND ACCORDINGLY TREATED THE SAME AS REVENUE EXPENDITURE. THE FACTS IN THE PRESENT CASE HOWEVER ARE DIFFERENT INASMUCH AS THE IMPUGNED EXPENDITURE HAS BEE N INCURRED BY THE ASSESSEE - COMPANY TO ACQUIRE THE SURFACE RIGHTS AS WELL AS THE RIGHT TO POSSESSION IN RESPECT OF THE LEASEHOLD LAND FOR ENDURING BENEFITS AND THE SAME BEING NOT IN THE REVENUE FIELD THE DECISION IN THE CASE OF GOTAN LIME SYNDICATE HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. AS REGARDS THE RELIANCE PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MADRAS AUTO SERVICE (P) LTD. (SUPRA) IT IS OBSERVED THAT THE ASSESSEE IN THAT CASE HAD MADE SUBSTANTIAL SAVINGS IN MONTHLY RENT FOR THE ENTIRE LEASE PERIOD BY SPENDING THE AMOUNT ON CONSTRUCTION OF A NEW BUILDING ON THE LAND TAKEN ON LONG LEASE AND AS THE SAID EXPENDITURE RESULTED IN A SAVING OF RENT WHICH WAS A REVENUE EXPENDITURE THE HONBLE APEX COURT ALLOWED THE SAID EXPENDITURE AS REVENUE EXPENDITURE. SIMILARLY IN THE CASE OF CIT V. ASSOCIATED CEMENT COMPANIES LTD . (1988) 172 ITR 257 (SC) THE ASSESSEE BY BEARING THE COST OF LAYING PIPELINES AS PER THE AGREEMENT ENTERED INTO WITH THE GOVERNMENT/MUNICIPALITY WAS NOT NEEDED TO 17 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. PAY MUNICIPAL TAXES FOR 15 YEARS AND CONSIDERING THAT THE ASSESSEE IN THE ABSENCE OF THE SAI D ARRANGEMENT WOULD HAVE TO PAY THE TAXES EVERY YEAR TO THE DEBIT OF REVENUE ACCOUNT THE SAID EXPENDITURE WAS ALLOWED AS REVENUE EXPENDITURE BY THE HONBLE SUPREME COURT. IN THE PRESENT CASE AS ALREADY OBSERVED THE EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR ACQUIRING ANY ENDURING BENEFITS IN THE CAPITAL FIELD AND THEREFORE THE SAME IS DISTINGUISHABLE FROM THE CASE OF MADRAS AUTO SERVICE (P) LTD. AS WELL AS THAT OF ASSOCIATED CEMENT COMPANIES LTD. FURTHER IN THE CASE OF EMPIRE JUTE CO. LTD. V. CIT (SUPRA) THE HONBLE SUPREME COURT OBSERVED THAT IF THE ADVANTAGE MERELY CONSISTS OF FACILITATING THE ASSESSEES TRADING OPERATION OR ENABLING THE MANAGEMENT AND CONDUCT OF THE ASSESSEES BUSINESS MORE EFFICIENTLY OR MORE PROFITABLY WHILE LEAVING FIXED CAPITAL UNTOUC HED THE EXPENDITURE WOULD BE OF REVENUE NATURE EVEN THOUGH THE ADVANTAGE MAY ENDURE FOR A INDEFINITE FUTURE. IN THE PRESENT CASE THE ASSESSEE HAS ACQUIRED AN INTEREST IN THE IMMOVABLE PROPERTY IN THE FORM OF SURFACE RIGHTS AND RIGHT TO POSSESSION IN RESP ECT OF LEASEHOLD LAND AND THE SAME BEING NOT MERELY TO FACILITATE THE ASSESSEES BUSINESS OPERATION BUT BEING IN THE NATURE OF ACQUISITION OF SUBSTANTIVE RIGHT IN THE IMMOVABLE PROPERTY FOR ENDURING ADVANTAGE THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF EMPIRE JUTE CO. LTD. CANNOT BE SAID TO HAVE ANY APPLICATION IN THE ASSESSEES CASE. SIMILARLY THE CASE OF PLANTATION CORPORATION OF KERALA V. COMMR.AGRL . I T (SUPRA) IS ALSO DISTINGUISHABLE ON THE SIMILAR LINE. 11.8. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO CONTENDED BEFORE US THAT THE ASSESSEE - COMPANY DID NOT ACQUIRE ANY RIGHT OR INTEREST IN RESPECT OF RELOCATED VILLAGES WHICH WERE BUILT UP AND HANDED OVER TO THE VILLAGERS AND ULTIMATEL Y BECAME THE PROPERTY OF THE SAID VILLAGERS. IN THIS REGARD WE MAY OBSERVE THAT THE SAID EXPENDITURE ON REHABILITATION AND RELOCATION OF THE VILLAGES WAS INCURRED BY THE ASSESSEE - COMPANY TO ACQUIRE THE RIGHT TO POSSESSION IN THE LEASEHOLD LAND IN RESPECT OF SURFACE RIGHTS OBTAINED BY IT AND THE VERY PURPOSE OF INCURRING THE SAID EXPENDITURE WAS TO ACQUIRE SUCH RIGHTS IN THE SAID IMMOVABLE PROPERTY. THIS BEING SO IT CANNOT BE SAID THAT THE SAID EXPENDITURE DID NOT RESULT IN THE ACQUISITION OF ENDURING BENE FITS IN THE CAPITAL ASSET THE RIGHTS OR INTEREST IN THE RELOCATED VILLAGES NOTWITHSTANDING. 11.8. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO CONTENDED BEFORE US THAT THE ASSESSEE - COMPANY DID NOT ACQUIRE ANY RIGHT OR INTEREST IN RESPECT OF RELOCATED VIL LAGES WHICH WERE BUILT UP AND HANDED OVER TO THE VILLAGERS AND ULTIMATELY BECAME THE PROPERTY OF THE SAID VILLAGERS. IN THIS REGARD WE MAY OBSERVE THAT THE SAID EXPENDITURE ON REHABILITATION AND RELOCATION OF THE VILLAGES WAS INCURRED BY THE ASSESSEE - COMP ANY TO ACQUIRE THE RIGHT TO POSSESSION IN THE LEASEHOLD LAND IN RESPECT OF SURFACE RIGHTS OBTAINED BY IT AND THE VERY PURPOSE 18 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. OF INCURRING THE SAID EXPENDITURE WAS TO ACQUIRE SUCH RIGHTS IN THE SAID IMMOVABLE PROPERTY. THIS BEING SO IT CANNOT BE SAID THAT THE SAID EXPENDITURE DID NOT RESULT IN THE ACQUISITION OF ENDURING BENEFITS IN THE CAPITAL ASSET THE RIGHTS OR INTEREST IN THE RELOCATED VILLAGES NOTWITHSTANDING. 11.9. IN THE CASE OF ASSAM BENGAL CEMENT CO. LTD. V. CIT (SUPRA) RELIED UPON BY THE REVENUE THE HONBLE APEX COURT OBSERVED THAT THE AIM AND OBJECT OF THE EXPENDITURE WOULD DETERMINE THE CHARACTER OF EXPENDITURE WHETHER IT IS A CAPITAL OR REVENUE AND THE SOURCE OR THE MANNER OF PAYMENT WOULD THEN BE OF NO CONSEQUENCE. IN THE PRESENT CASE THE EX PENDITURE WAS INCURRED BY THE ASSESSEE - COMPANY WITH AIM AND OBJECT TO ACQUIRE THE SURFACE RIGHTS AS WELL AS THE RIGHT TO POSSESSION IN RESPECT OF THE LEASEHOLD LAND FOR A LONG PERIOD AND THEREFORE THE NATURE OF SUCH EXPENDITURE WAS CERTAINLY OF CAPITAL N ATURE. THE REVENUE HAS ALSO RELIED ON THE DECISION OF HONBLE MYSORE HIGH COURT IN THE CASE OF N. PEER SAHIB V. CIT (SUPRA) IN RESPECT OF WHICH THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE LEASE AMOUNTS HAVING BEEN PAID TO THE SURFACE OWNERS BY THE ASSESSEE THEREIN FOR EXTRACTING IRON COAL AT THE BEGINNING OF THE MINING OPERATION IT WAS CONSIDERED AS CAPITAL IN NATURE WHEREAS IN THE PRESENT CASE THE ASSESSEE HAS MADE THE RELEVANT PAYMENTS DURING THE CURRENCY OF THE LEASE PERIOD. AFTER CAREFUL LY PERUSING THE SAID DECISION OF HONBLE MYSORE HIGH COURT IT HOWEVER APPEARS THAT THE PAYMENT MADE TO THE PATTEDARS WHO WERE OCCUPYING RIGHTS OVER THE LAND WHICH HAD BEEN ACQUIRED BY THE ASSESSEE FROM THE GOVERNMENT WAS FOUND TO BE OF THE SAME CHARACTER AS THE PAYMENTS TO THE GOVERNMENT FOR ACQUIRING THE MINING LEASE AND KEEPING IN VIEW THIS CHARACTER OF THE PAYMENT THE HONBLE MYSORE HIGH COURT HELD THE SAME TO BE A CAPITAL EXPENDITURE. IN THE CASE OF CHLORIDE INDIA LTD. V. CIT (SUPRA) RELIED UPON BY THE REVENUE THE ASSESSEE HAD PAID THE MONEY FOR BUYING OUT TILE TENANCY RIGHT AND THEREFORE IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT THAT THE AMOUNT SO PAID FOR ACQUIRING THE POSSESSION WHICH WAS A BENEFIT OF ENDURING NATURE IS A CAPITAL EXPENDITURE. IN THE PRESENT CASE ALSO THE ASSESSEE HAS ACQUIRED THE RIGHT TO POSSESSION FROM THE VILLAGERS/OCCUPANTS IN RESPECT OF THE LEASEHOLD LAND BY REHABILITATING AND RELOCATING THE SAID VILLAGERS AND THEREFORE THE DECISION IN THE CASE OF CHLORIDE INDIA LTD. V . CIT (SUPRA) IS CLEARLY APPLICABLE TO THE FACTS OF THE PRESENT CASE. SIMILARLY THE CASE OF CIT V. LUCKY BHARAT GARAGE (SUPRA) RELIED UPON BY THE REVENUE ALSO RENDERS SUPPORT TO THE REVENUES CASE THAT THE SAID EXPENDITURE WAS CAPITAL IN NATURE. HEAVY RELIA NCE HAS BEEN PLACED BY THE REVENUE TO SUPPORT ITS STAND ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF R.B. SETH MOOLCHANDSUGANCHAND V. CIT (SUPRA) WHEREIN THE HONBLE SUPREME COURT HELD THAT THE AMOUNT SPENT FOR OBTAINING A RIGHT OF AN ENDURING CHA RACTER WHICH IN THE CASE OF MINING LEASES IS TO ACQUIRE RIGHTS OVER A LAND FOR WINNING THE 19 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. MINERAL IS OF A CAPITAL NATURE. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE SAID DECISION IN THE CASE OF R.B. SETH MOOLCHAND SUGANCHAND (SUP RA) HAS BEEN DISTINGUISHED BY THE HONBLE APEX COURT IN ITS SUBSEQUENT DECISION IN THE CASE OF BIKANER GYPSUMS LTD. V. CIT (SUPRA). A PERUSAL OF THE SUBSEQUENT JUDGMENT OF THE HONBLE APEX COURT HOWEVER REVEALS THAT THE FACTS INVOLVED IN THE CASE OF R.B. S ETH MOOLCHAND SUGANCHAND (SUPRA) WERE FOUND TO BE TOTALLY DIFFERENT FROM THE FACTS INVOLVED IN THE CASE OF BIKANER GYPSUMS LTD. INASMUCH AS IN THE LATTER CASE THE EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR THE REMOVAL OF A RESTRICTION WHICH WAS OBSTRUCTIN G HIS BUSINESS OPERATION OF MINING WITHIN A PARTICULAR AREA. WE HAVE ALREADY OBSERVED THAT THE EXISTENCE OF VILLAGE WAS NOT OBSTRUCTING THE MINING OPERATIONS OF THE ASSESSEE - COMPANY AND THE EXPENDITURE IN QUESTION WAS INCURRED TO ACQUIRE THE RIGHT TO POSSE SSION IN RESPECT OF THE LEASEHOLD LAND TO FACILITATE THE ENJOYMENT OF SURFACE RIGHTS. MOREOVER AS THE SAID ACQUISITION RESULTED INTO ACCRUAL OF ENDURING BENEFITS TO THE ASSESSEE - COMPANY FOR THE BALANCE PERIOD OF LEASE THE SAME HAS TO BE TREATED AS CAPITA L EXPENDITURE AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF ASSAM BENGAL CEMENT CO. LTD. V. CIT (SUPRA). AS SUCH CONSIDERING ALL THE FACTS OF THE CASE AND LEGAL POSITION ENUMERATING FROM THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE WE ARE OF T HE CONSIDERED OPINION THAT THE IMPUGNED EXPENDITURE INCURRED BY THE ASSESSEE FOR ACQUIRING SURFACE RIGHTS AS WELL AS THE RIGHT TO POSSESSION IN RESPECT OF LEASEHOLD LAND FOR ENDURING PERIOD WAS A CAPITAL EXPENDITURE AND THE LEARNED COMMISSIONER (APPEALS) W AS FULLY JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE SAME AS CAPITAL EXPENDITURE AND THEREBY DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE IN RESPECT OF THE SAME. 11.9. IN THE CASE OF ASSAM BENGAL CEMENT CO. LTD. V. CIT ( SUPRA) RELIED UPON BY THE REVENUE THE HONBLE APEX COURT OBSERVED THAT THE AIM AND OBJECT OF THE EXPENDITURE WOULD DETERMINE THE CHARACTER OF EXPENDITURE WHETHER IT IS A CAPITAL OR REVENUE AND THE SOURCE OR THE MANNER OF PAYMENT WOULD THEN BE OF NO CONSEQU ENCE. IN THE PRESENT CASE THE EXPENDITURE WAS INCURRED BY THE ASSESSEE - COMPANY WITH AIM AND OBJECT TO ACQUIRE THE SURFACE RIGHTS AS WELL AS THE RIGHT TO POSSESSION IN RESPECT OF THE LEASEHOLD LAND FOR A LONG PERIOD AND THEREFORE THE NATURE OF SUCH EXPEN DITURE WAS CERTAINLY OF CAPITAL NATURE. THE REVENUE HAS ALSO RELIED ON THE DECISION OF HONBLE MYSORE HIGH COURT IN THE CASE OF N. PEER SAHIB V. CIT (SUPRA) IN RESPECT OF WHICH THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE LEASE AMOUNTS HAVING BEEN PAID TO THE SURFACE OWNERS BY THE ASSESSEE THEREIN FOR EXTRACTING IRON COAL AT THE BEGINNING OF THE MINING OPERATION IT WAS CONSIDERED AS CAPITAL IN NATURE WHEREAS IN THE PRESENT CASE THE ASSESSEE HAS MADE THE RELEVANT PAYMENTS DURING THE CURRENCY O F THE LEASE PERIOD. AFTER CAREFULLY PERUSING THE SAID 20 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. DECISION OF HONBLE MYSORE HIGH COURT IT HOWEVER APPEARS THAT THE PAYMENT MADE TO THE PATTEDARS WHO WERE OCCUPYING RIGHTS OVER THE LAND WHICH HAD BEEN ACQUIRED BY THE ASSESSEE FROM THE GOVERNMENT WAS F OUND TO BE OF THE SAME CHARACTER AS THE PAYMENTS TO THE GOVERNMENT FOR ACQUIRING THE MINING LEASE AND KEEPING IN VIEW THIS CHARACTER OF THE PAYMENT THE HONBLE MYSORE HIGH COURT HELD THE SAME TO BE A CAPITAL EXPENDITURE. IN THE CASE OF CHLORIDE INDIA LTD. V. CIT (SUPRA) RELIED UPON BY THE REVENUE THE ASSESSEE HAD PAID THE MONEY FOR BUYING OUT TILE TENANCY RIGHT AND THEREFORE IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT THAT THE AMOUNT SO PAID FOR ACQUIRING THE POSSESSION WHICH WAS A BENEFIT OF ENDURING NATURE IS A CAPITAL EXPENDITURE. IN THE PRESENT CASE ALSO THE ASSESSEE HAS ACQUIRED THE RIGHT TO POSSESSION FROM THE VILLAGERS/OCCUPANTS IN RESPECT OF THE LEASEHOLD LAND BY REHABILITATING AND RELOCATING THE SAID VILLAGERS AND THEREFORE THE DECISION IN THE CASE OF CHLORIDE INDIA LTD. V. CIT (SUPRA) IS CLEARLY APPLICABLE TO THE FACTS OF THE PRESENT CASE. SIMILARLY THE CASE OF CIT V. LUCKY BHARAT GARAGE (SUPRA) RELIED UPON BY THE REVENUE ALSO RENDERS SUPPORT TO THE REVENUES CASE THAT THE SAID EXPENDITURE W AS CAPITAL IN NATURE. HEAVY RELIANCE HAS BEEN PLACED BY THE REVENUE TO SUPPORT ITS STAND ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF R.B. SETH MOOLCHANDSUGANCHAND V. CIT (SUPRA) WHEREIN THE HONBLE SUPREME COURT HELD THAT THE AMOUNT SPENT FOR OBT AINING A RIGHT OF AN ENDURING CHARACTER WHICH IN THE CASE OF MINING LEASES IS TO ACQUIRE RIGHTS OVER A LAND FOR WINNING THE MINERAL IS OF A CAPITAL NATURE. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE SAID DECISION IN THE CASE OF R .B. SETH MOOLCHANDSUGANCHAND (SUPRA) HAS BEEN DISTINGUISHED BY THE HONBLE APEX COURT IN ITS SUBSEQUENT DECISION IN THE CASE OF BIKANER GYPSUMS LTD. V. CIT (SUPRA). A PERUSAL OF THE SUBSEQUENT JUDGMENT OF THE HONBLE APEX COURT HOWEVER REVEALS THAT THE FAC TS INVOLVED IN THE CASE OF R.B. SETH MOOLCHANDSUGANCHAND (SUPRA) WERE FOUND TO BE TOTALLY DIFFERENT FROM THE FACTS INVOLVED IN THE CASE OF BIKANER GYPSUMS LTD. INASMUCH AS IN THE LATTER CASE THE EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR THE REMOVAL OF A RESTRICTION WHICH WAS OBSTRUCTING HIS BUSINESS OPERATION OF MINING WITHIN A PARTICULAR AREA. WE HAVE ALREADY OBSERVED THAT THE EXISTENCE OF VILLAGE WAS NOT OBSTRUCTING THE MINING OPERATIONS OF THE ASSESSEE - COMPANY AND THE EXPENDITURE IN QUESTION WAS INCUR RED TO ACQUIRE THE RIGHT TO POSSESSION IN RESPECT OF THE LEASEHOLD LAND TO FACILITATE THE ENJOYMENT OF SURFACE RIGHTS. MOREOVER AS THE SAID ACQUISITION RESULTED INTO ACCRUAL OF ENDURING BENEFITS TO THE ASSESSEE - COMPANY FOR THE BALANCE PERIOD OF LEASE THE SAME HAS TO BE TREATED AS CAPITAL EXPENDITURE AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF ASSAM BENGAL CEMENT CO. LTD. V. CIT (SUPRA). AS SUCH CONSIDERING ALL THE FACTS OF THE CASE AND LEGAL POSITION ENUMERATING FROM THE JUDICIAL PRONOUNCEMENTS D ISCUSSED HEREINABOVE WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED EXPENDITURE INCURRED BY THE ASSESSEE FOR 21 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. ACQUIRING SURFACE RIGHTS AS WELL AS THE RIGHT TO POSSESSION IN RESPECT OF LEASEHOLD LAND FOR ENDURING PERIOD WAS A CAPITAL EXPENDITURE AND THE LEARNED COMMISSIONER (APPEALS) WAS FULLY JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE SAME AS CAPITAL EXPENDITURE AND THEREBY DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE IN RESPECT OF THE SAME. THEREFORE EVEN IN ASSES SEES OWN CASE THE CO - ORDINATE BENCH OF THE TRIBUNAL NAGPUR HAS DECIDED THIS ISSUE IN FAVOUR OF THE REVENUE. FURTHER BEFORE US NO MATERIAL HAS BEEN PLACED BY THE ASSESSEE TO DEMONSTRATE THAT THE AFORESAID ITAT ORDER IN ASSESSEES OWN CASE HAS BEEN SET ASIDE/STAYED/OVERRULED BY THE HIGHER JUDICIAL FORUM. THAT THEREFORE THE SAID DECISION OF THE CO - ORDINATE BENCH RULING IN FAVOUR OF THE REVENUE STILL HOLDS GOOD AS IN LAW AND FACTS. ON ENQUIRY FROM THE BENCH THE LD. AR OF THE ASSESSE SUBMITTED THAT THEY HAVE NOT FILED ANY APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF THE CO - ORDINATE BENCH OF THE TRIBUNAL NAGPUR IN ASSESSEES OWN CASE THAT IN FACT CONCLUDES THAT ORDER OF THE CO - ORDINATE BENCH OF THE TRIBUNAL HAS ATTAINED FINALITY. THE DECISION THEREFORE WHICH HAS BEEN GIVEN IN FAVOUR OF THE REVENUE ON THE ISSUE OF REHABILITATION EXPENSES AS ON DATE STILL HOLDS GOOD. RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINAT E BENCH AND TAKING GUIDANCE FROM THE HONBLE APEX COURT WE DO NOT FIND ANY INFIRMITY WITH THE FINDINGS OF THE LD. CIT(APPEALS) WHICH IS THEREBY UPHELD. HENCE GROUND NO.3 IS DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. THUS GROUND NO.3 RAIS ED IN APPEAL BY THE ASSESSEE IS DISMISSED. FOLLOWING THE SAME PARITY OF REASONING AS RENDERED IN THE AFORESAID DECISION (SUPRA) WE DISMISS THE GROUND NO.1 RAISED BY THE ASSESSEE. 25. THE ISSUE RAISED IN GROUND NO.2 IN THIS APPEAL IS SIMILAR TO THE GROUND NO.2 RAISED IN ITA NO.187/JAB/2008. THE DECISION RELATING TO GROUND NO.2 RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS 22 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. MUTANDIS TO THIS ISSUE RAISED VIDE GROUND NO.2 IN ITA NO.173/JAB/2008. THUS THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED. 26. THE ISSUE RAISED IN GROUND NO. 3IN THIS APPEAL IS SIMILAR TO THE GROUND NO.3 RAISED IN ITA NO.187/JAB/2008. THE DECISION RELATING TO GROUND NO.3 RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO THIS ISSUE RAISED VID E GROUND NO.3 IN ITA NO.173/JAB/2008. THUS THE GROUND NO.3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 27. THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND AS GROUND NO.1E WHICH IS AS FOLLOWS: 1E .WITHOUT PREJUDICE TO OUR CONTENTION THAT THE DEDUCTION IS A REVENUE EXPENDITURE ALLOWABLE FULLY IN AY. 2004 - 05 IN VIEW OF THE DECISION OF HONBLE ITAT CUTTACK IN EAST INDIA MINERALS LIMITED VS. JCIT (ITA NO.224/CTK/2012 THE ASSESSEE COMPANY SHOULD BE PERMITTED TO CLAIM THE SAID EXPENDITURE OVER THE LIMITED PERIOD OF THE LEASE OF LAND FOR MINING. 28. WITH REGARD TO THIS ADDITIONAL GROUND NO.1E THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL CUTTACK IN THE CASE OF EAST INDIA MINERALS LIMIT ED VS. JCIT (ITA NO.224/CTK/2012) WHEREIN THE CUTTACK BENCH OF THE TRIBUNAL HAS HELD AS UNDER: 23 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE UPH OLD THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE FOR THE SIMPLE REASON THAT THE DENIAL OF CLAIM OF DEPRECIATION HAS BEEN MADE ON MISINTERPRETATION OF LAW AND THE APPLICABILITY THEREOF. EXPLANATION TO SECTION 32(1)(II) LEANS IN FAVOUR OF THE ASSES SEE TO THE EXTENT THAT IT IS THE ACTUAL ACTION OF PUT TO USE WHICH ENTITLES THE ASSESSEE TO CLAIM DEPRECIATION. A STRAIGHT LINE METHOD OF CLAIMING THE WRITING OFF OF LEASE HOLD RIGHTS FOR THE PERIOD OF LEASE CANNOT BE DENIED TO THE ASSESSEE FOR THE SIMPLE REASON IT BEING INTANGIBLE ASSET HAS BEEN WRITTEN OFF WHICH PERTAINS TO LAND BEING A INTANGIBLE ASSET. IT IS NOBODYS CASE THAT THE LAND EITHER BELONGED TO THE LESSEE OR TO THE GOVERNMENT. THIS SIMPLY INDICATES THAT A DEPLETION OF THE LAND AGAINST THE PAYM ENT OF PREMIUM IT WAS LEASED HAS TO BE CLAIMED AFTER CAPITALIZATION THEREOF BY THE ASSESSEE WHICH IS FOR THE PURPOSE OF ITS MAIN BUSINESS. ALL EXPENSES ARE INCURRED FOR THE PURPOSE OF BUSINESS AND ARE INCIDENTAL TO THE HOLDING OF RIGHTS WERE CLAIMED U/S.32 (1)(II) BEING THE LICENSE TO CARRY OUT THE MINING THEREFORE COULD NOT BE DENIED INSOFAR AS THE GOVERNMENT AND THE LESSEE ARE IN CONTROL OF THE ASSET. THE DEFINITION OF DEPRECIATION THEREFORE HAS BEEN MISCONSTRUED FOR THE PURPOSE OF ALLOWING DEDUCTION BY TH E ASSESSING OFFICER AND THE LEARNED CIT(A) IN HOLDING A VIEW ON THE PROMULGATION OF SECTION 32(1)(II) WITH EFFECT FROM THE YEAR 1998 - 99 WHICH HAS BEEN FURTHER AMENDED W.E.F. ASSESSMENT YEAR 2003 - 04. IN THIS VIEW OF THE MATER WE ARE INCLINED TO HOLD THAT T HE ASSESSEE IS ENTITLED TO DEPRECIATION AS CHARGED TO THE P & L ACCOUNT IN ACCORDANCE WITH ITS BUSINESS EXIGENCIES. WE DIRECT AC CORDINGLY. 29 . WE HAVE PERUSED THE CASE RECORDS AND GIVEN CONSIDERABLE THOUGHT TO THE SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE REGARDING GROUND NO. 1E AND WE HAVE ALSO OBSERVED AND CONSIDERED THE FINDINGS OF THE CO - ORDINATE BENCH CUTTACK. IN THE INTEREST OF JUSTIC E THIS GROUND IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER AND ASSESSING OFFICER IS DIRECTED TO ADJUDICATE THIS ISSUE AFTER TAKING INTO CONSIDERATION THE VIEW AND DIRECTIONS AS GIVEN BY THE CO - ORDINATE CUTTAK BENCH OF THE TRIBUNAL AND AS PER LAW AFTE R PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 24 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. HENCE ADDITIONAL GROUND NO. 1E RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 30. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO.173/JAB/2008 IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ITA NO.174/JAB/2008 A.Y.2005 - 06 31. THE PARTIES HEREIN FAIRLY ADMITTED THAT A LL T HE ISSUE S RAISED IN THIS APPEAL INCLUDING THE ADDITIONAL GROUND ARE SIMILAR AND IDENTICAL TO THE ISSUE S RAISED IN ITA NO.173/JAB/2008. SINCE THE FACTS AND ISSUES ARE COMMON OUR DECISION RENDERED IN ITA NO.173/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO THE APPEAL IN ITA NO.174/JAB/2008. 32. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO.17 4 /JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.175/JAB/2008 A.Y.2006 - 07 33. THE PARTIES HEREIN FAIRLY ADMITTED THAT ALL THE ISSUES RAISED IN THIS APPEAL INCLUDING THE ADDITIONAL GROUND ARE SIMILAR AND IDENTICAL TO THE ISSUES RAISED IN ITA NO.173/JAB/2008. SINCE THE FACTS AND ISSUES ARE 25 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. COMMON OUR DECISION RENDERED IN ITA NO.173/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO THE APPEAL IN ITA NO.17 5 /JAB/2008. 3 4 . IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO.17 5 /JAB/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.05/BLPR/2012 A.Y.2008 - 09 35. THE ISSUE RAISED IN GROUND NO.1 OF THIS APPEAL IS SIMILAR TO THE ISSUE RAISED IN GROUND NO.1 IN ITA NO.173/JAB/2008. SINCE THE FACTS AND ISSUES ARE COMMON OUR DECISION RENDERED IN ITA NO.173/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO THE ISSUE RAISED IN GROUND NO.1 IN ITA NO.05/BLPR/2012. THUS THE GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 36. THE ISSUE RAISED IN GROUND NO.2 IN THIS APPEAL IS SIMILAR TO THE ISSUE RAISED IN GROUND NO.2 IN ITA NO.187/JAB/2008. SINCE THE FAC TS AND ISSUES ARE COMMON OUR DECISION RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO THE ISSUE RAISED IN GROUND NO.2 IN ITA NO.05/BLPR/2012. THUS THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED. 26 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 37. THE ISSUE RAISED IN GROUND NO.3 IN THIS APPEAL IS SIMILAR TO THE ISSUE RAISED IN GROUND NO.3 IN ITA NO.187/JAB/2008. SINCE THE FACTS AND ISSUES ARE COMMON OUR DECISION RENDERED IN ITA NO.187/JAB/2008 SHALL APPLY MUTATIS MUTANDIS TO THE ISSUE RAISED IN GROUND NO.3 IN ITA NO.05/BLPR/2012. THUS THE GROUND NO.3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 38. THE ISSUE RAISED IN GROUND NO.4 IS AGAINST DISALLOWANCE OF RS.2.10 LAKHS ON ACCOUNT OF GUEST HOUSE EXPENSES. 39. THE BRIEF FACTS ON THE ISSUE ARE THE ASSESSEE COMPANY HAS CLAIMED A SUM OF RS.90.78 LAKHS AS GUEST HOUSE EXPENSES. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COMPANY HAS NEITHER FILED THE DETAILS OF EXPENDITURE STATION WISE IN RESPECT OF GUEST HOUSE S NOR HAS PRODUCED REGISTERS / RECORDS FOR OCCUPANTS. THE ASSESSING OFFICER HELD THAT IN THE ABSENCE OF ANY CONCRETE EVIDENCES TO THE EFFECT THAT THE GUEST HOUSES WERE USED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES THE CLAIM COULD NOT BE ALLOWED IN FU LL AND RESTRICTED DISALLOWANCE TO 50% AND ACCORDINGLY ADDED RS.45.39 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. 40. THE LD. CIT(A) RESTRICTED THE ADDITION TO RS.2.10 LAKHS BY OBSERVING AS UNDER: - 27 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. ON CAREFUL CONSIDERATION OF THE SUBMISSIONS MADE B Y THE LEARNED AR AND PERUSAL OF MATERIAL AVAILABLE ON RECORD I FIND THAT THIS ISSUE HAS BEEN DISCUSSED AT LENGTH IN APPELLATE ORDER PASSED IN THIS CASE IN APPEAL NO.107/CIT(A)/BSP/03 - 04 DATED 28.02.2007 FOR ASSTT. YR. 2002 - 03. THE REASONS GIVEN IN THE ABO VE ORDER HAS BEEN APPLIED FOR SUBSEQUENT YEARS TILL THE ASSTT. YR. 2007 - 08. RELYING ON THE ABOVE ORDER OF MY PREDECESSORS I FIND THE APPELLANTS CLAIM IN THIS REGARD AS ALLOWABLE. HOWEVER AS NOTICED BY THE AO THE APPELLANT COMPANY COULD FILE DETAILS OF STATION WISE EXPENDITURE ON GUEST HOUSES TO THE EXTENT OF RS.88.68 LACS. ACCORDINGLY THE ADDITION IS RESTRICTED TO RS.2.10 LACS FOR APPELLANT COMPANYS FAILURE TO ESTABLISH THE EXPENDITURE FULLY TO THE EXTENT CLAIMED IN THE P & L A/C. 41. WE HAVE PERU SED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO GIVEN CONSIDERABLE THOUGHT TO THE FINDINGS OF THE LD. CIT(A). WE FIND THAT THE ORDER OF THE LD. CIT(A) IS FAIR AND REASONABLE IN RESTRICTING THE ADDITION TO THE EXTENT OF RS.2.10 LACS AS T HE ASSESSEE COMPANY HAS FAILED TO FILE THE REQUISITE DETAILS REGARDING THEIR CLAIM TO THAT EXTENT . HENCE WE UPHOLD THE FINDINGS OF THE LD.CIT(A) AND THE SAME DOES NOT REQUIRE ANY INTERFERENCE. THUS GROUND NO.4 RAISED IN APPEAL BY THE ASSESSEE IS DISMISSED. 42. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO.05/BLPR/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ITA NO.21/BLPR/2012 ( BY REVENUE) A.Y.2006 - 07 43. IN ITA NO.21/BLPR/2012 THE REVENUE HAS RAISED FOLLOWING GROUNDS IN APPEAL: - 28 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 1 . THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN ALLOWING THE RELIEF OF RS.2 56 03 757/ - OUT OF TOTAL INTEREST WITHDRAWN AMOUNTING TO RS.3 71 78 138/ - WHICH HAS BEEN WITHDRAWN BY THE A.O. KEEPING IN VIEW THA T AS PER THE PROVISION U/S.244A OF THE ACT NO INTEREST SHALL BE PAYABLE IF THE AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX AS DETERMINED UNDER SUB SECTION (1) OF THE SECTION 115WE OR SUB SECTION (1) OF SECTION 143(3) OR ON REGULAR ASSESSMENT. 2 . THAT IN RE ACHING THE AFORESAID DECISION THE LEARNED CIT(A) FAILED TO APPRECIATE BOTH THE METICULOUS FINDING OF AO AS WELL AS THE FACTS HELD IN THE CASE OF THE ASSESSEE THAT INTEREST AMOUNTING TO RS.3 17 78 138/ - ALLOWED TO THE ASSESSEE IN VIOLATION OF THE PROVISION U/S.244A OF THE ACT. 3 . (A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF IN SPITE OF THE FACTS ON RECORDS THAT AS PER SECTION 2(40) THE DEFINITION OF REGULAR ASSESSMENT IS AS UNDER: REGULAR ASSESSMENT MEANS THE ASSESSMENT MADE UNDER [SUB - SECTION (3) OF SECTION 143 OR SECTION 144. (B) THAT IN REACHING THE AFORESAID DECISION THE LEARNED CIT(A) FAILED TO BRING ON RECORD ANY ADMISSIBLE EVIDENCE JUSTIFYING THE SAME AND IN S PITE OF THE FACTS ON RECORD THAT LITERAL RULE - PRIMARILY STATUTE SHOULD BE INTERPRETED ACCORDING TO THE EXPRESSION USED BY IT IN THE STATUTE IF THE LANGUAGE OF THE STATUTE IS CLEAR AND UNAMBIGUOUS AND IF TWO INTERPRETATIONS ARE NOT REASONABLE POSSIBLE I T WOULD BE WRONG TO DISCARD THE PLAIN MEANING OF THE WORDS USED IN THE ORDER TO MEET A POSSIBLE INJUSTICE - CIT VS. T.V. SUNDARAMLYENGER& SONS (P) LTD. (1975) 101 ITR 764 (S.C) MURARILALMAHABIR PRASAD VS. B.R. VAD (1976) 37 STC 77. FURTHER ONE OF THE PILL ARS OF STATUTORY INTERPRETATION VIS. LITERAL RULE DEMANDS THAT IF THE MEANING OF STATUTORY INTERPRETATION IS PLAIN THE COURTS MUST APPLY THE SAME REGARDLESS OF THE RESULT - CWT VS. HASMATUNNISA BEGUM (1989) 42 TAXMAN 133 (S.C). SO LONG AS THE PROVISION IS FREE FROM AMBIGUITY THE WORDS USED THEREIN SHOULD BE GIVEN THEIR PLAIN MEANING WITHOUT IMPORTING INTO IT ANY FOREIGN WORDS AND WITHOUT SUBTRACTING ANY WORDS THEREFROM. CIT VS. CHAMPARUN SUGAR WORKS LTD. (1997) 225 ITR 863 (ALL). (C) IN THE PRESENT CASE THE AOS ACTION IN WITHDRAWING THE INTEREST BY PASSING AN ORDER U/S. 154 IS IN ACCORDANCE WITH THE LEGAL INTERPRETATION OF THE ACT. SINCE THERE IS NO AMBIGUITY INVOLVED ON VIOLATION OF CONSTRUCTION IS CALLED FOR. AS THE CIT(A) IS BEING INTERMEDIATE APPEL LATE AUTHORITY AND NOT BEING COURT OF LAW NO VIOLATION OF CONSTRUCTION IS PERMISSIBLE IN INTERPRETATION OF THE STATUTE. IMPLICATION OF SUB SECTION 3 OF 29 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. THE SECTION 244A CANNOT BE IMPORTED TO INTERPRET THE PROVISO OF SUB SECTION 1. 4 . THAT THE LD. CIT(A)S O RDER BEING ERRONEOUS PERVERSE AND CONTRARY TO THE FACTS ON RECORD THE SAME MAY BE REVERSED WHILE THAT OF THE AO BE RESTORED. 5 . THAT THE APPELLANT ASSESSING OFFICER RESERVES THE RIGHT TO AMEND MODIFY OR ADD ANY OF T HE GROUNDS OF APPEAL PREFERRED. 44. THE CRUX OF THE GRIEVANCE OF THE REVENUE IS AGAINST THE RELIEF OF RS.2 56 03 757/ - GRANTED OUT OF TOTAL INTEREST WITHDRAWN AMOUNTING TO RS.3 71 78 138/ - WHICH HAS BEEN WITHDRAWN BY THE ASSESSING OFFICER KEEPING IN VIEW THAT AS PER PROVISION S OF SECTION 244 A OF THE INCOME TAX ACT 1961 ( HEREINAFTER REFERRED TO AS THE ACT) NO INTEREST SHALL BE PAYABLE IF THE AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX AS DETERMINED SUB SECTION (1) OF SECTION 115WE OR SUB SECTION (1) OF SECTION 143(3) OR ON REGULAR ASSESSMENT. 45. THE BRIEF FACTS ON THE ISSUE ARE THAT THE ASSESSING OFFICER OBSERVED THAT AS PER PROVISION S OF SECTION 244A OF THE ACT NO INTEREST SHALL BE PAYABLE IF TH E AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX AS DETERMINED UNDER SUB SECTION (1) OF SECTION 115WE OR SUB SECTION (1) OF SECTION 143(3) OR ON REGULAR ASSESSMENT. ACCORDINGLY THE INTEREST SO ALLOWED HAS BEEN WITHDRAWN BY THE ASSESSING O FFICER VIDE RECTIFI CATION U/S.154 OF THE ACT. 30 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 46. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LD. AR CAREFULLY. AS PER THE PROVISO TO CLAUSE (A) OF SUB - SECTION (1) OF SECTION 244A OF THE I.T. ACT 1961 NO INTEREST SHALL BE PAYABLE IF THE AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX AS DETERMINED UNDER SUB - SECTION (1) OF SECTION 115WE OR SUB - SECTION (1) OF SECTION 143 OR ON REGULAR ASSESSMENT. IN THE INSTANT CASE THE ALLEGED REFUND OF RS.33 46 03 238/ - INCLUDING INTEREST OF RS.3 71 78 138/ - WAS NEITHER ISSUED UNDER SUB SECTION (1) OF 143 NOR ON REGULAR ASSESSMENT. RATHER THE REFUND WAS ISSUED AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A) BILASPUR U/S.250 OF THE I. T. ACT. ACCORDINGLY CLAUSE (B) OF SUB SECTION (1) OF SECTION 244A IS APPLICABLE FOR GIVING INTEREST ON REFUND DUE TO THE APPELLANT COMPANY AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A) BILASPUR IN ITA NO. 198/2007 - 08 DATED 28 - 03 - 2008 AND THUS PROVISO TO CLAUSE (A) OF SUB SECTION (1) OF SECTION 244A IS NOT APPLICABLE. AS PER SUB SECTION (3) OF THE AFORESAID SECTION WHERE AS A RESULT OF AN ORDER U/S.250 OF THE ACT THE AMOUNT ON WHICH THE INTEREST WAS PAYABLE UNDER SUB SECTION (1) HAS BEEN INCREASED OR REDUCED AS THE CASE MAY BE THE I NTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY AND IN A CASE WHERE THE INTEREST IS REDUCED THE AO SHALL SERVE ON THE ASSESSEE A NOTICE OF DEMAND SPECIFYING THE AMOUNT OF EXCESS INTEREST PAID AND REQUIRING HIM TO PAY SUCH AMOUNT AND SUCH NOTICE OF DEMA ND SHALL BE DEEMED TO BE A NOTICE UNDER SECTION 156 AND PROVISION OF THIS ACT SHALL APPLY ACCORDINGLY. THUS IF THERE IS VARIATION OF INTEREST AS PER SECTION 244A(3) SUCH VARIATION OF INTEREST SHALL BE SUBSTITUTED FOR THE INTEREST ORIGINALLY GRANTED BY RE DUCED OR INCREASED AMOUNT AS THE CASE MAY BE BY RECTIFICATION U/S.154 OF THE ACT. [RELIED ON GARDEN SILK MILLS VS. CIT (1996) 221 ITR 861 (GUJ.)] ACCORDINGLY THE AO HAS JURISDICTION FOR RECTIFYING THE INTEREST PAID/PAYABLE ON REFUND U/S. 154 OF THE I.T. ACT. AS PER PROVISION UNDER SUB SECTION (2) OF SECTION 234D WHERE AS A RESULT OF AN ORDER U/S.150 THE AMOUNT OF REFUND GRANTED UNDER SUB SECTION (1) OF SECTION 143 IS HELD TO BE ALLOWED CORRECTLY ALLOWED EITHER IN WHOLE OR IN PART AS THE CASE MAY BE THE N THE INTEREST CHARGEABLE IF ANY UNDER SUB SECTION (1) SHALL BE REDUCED ACCORDINGLY. THE ASSESSED INCOME WAS SUBSTANTIALLY REDUCED AT THE APPELLATE STAGE BUT IT IS MORE THAN THE INCOME RETURNED. IN THE GIVEN 31 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. FACT AND CIRCUMSTANCES OF THE CASE AND KEEPIN G IN VIEW OF THE ABOVE PROVISIONS UNDER THE ACT I FIND THAT WHATEVER THE INTEREST U/S.244A OF THE ACT DUE TO THE APPELLANT U/S.143(1) OF THE ACT OUGHT TO BE REDUCED FROM THE INTEREST ON REFUND GRANTED TO THE APPELLANT COMPANY AFTER DETERMINATION OF INCOM E BY THE APPELLATE AUTHORITIES. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITIONAL GROUND OF APPEAL FILED BY THE LD. AR IS FOUND TO BE BONAFIDE AND RELEVANT TO DECIDE THE ISSUE IN HAND AND HENCE ADMITTED. THE COMPUTATION OF INTEREST OUGHT TO BE CALLED BACK OR WITHDRAWN AS PER PROVISION U/S.234D AS SUBMITTED BY THE LD. AR WAS REFERRED TO THE AO FOR FURTHER VERIFICATION VIDE THIS OFFICE LETTER NO. CIT(A)/BSP/RR/11 - 12/131 DATED 14.11.2011 AND THE AO IN HIS REPORT DATED 29.11.2011 HAS AGREED TO THE ARGUMENT OF THE LD. AR ON PRINCIPLE BUT POINTED OUT CERTAIN MISTAKES FURNISHED BY THE LD. AR. HE COMPUTED INTEREST ON REFUND TO BE CALLED BACK AT RS.1 15 74 341/ - AS AGAINST RS.1 02 02 000/ - COMPUTED BY THE LD. AR. THE ABOVE REPORT OF THE AO WAS REFER RED TO THE LD. ARS OF THE APPELLANT COMPANY BEFORE FINALIZING THE ISSUE AND NO OBJECTION WAS RAISED BY THEM. ON CAREFUL PERUSAL OF THE COMPUTATION SHEET FURNISHED BY THE AO AND THE LD. AR I FIND THAT THE REPORT OF THE AO IS MORE PRECISE AND ACCORDINGLY I T IS HELD THAT THE EXCESS CLAIM OF INTEREST TO THE EXTENT OF RS.1 15 74 341/ - IS REQUIRED TO BE CALLED BACK U/S.234D OF THE ACT ONLY BUT NOT THE WITHDRAWAL OF ENTIRE INTEREST OF RS.3 71 78 138/ - GRANTED U/S.244A OF THE ACT. 47. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO GIVEN CONSIDERABLE THOUGHT TO THE FINDINGS OF THE LD. CIT(A) . THE LD. CIT(A) OBSERVED THAT IN THE INSTANT CASE THE ALLEGED REFUND OF RS.33 46 03 238/ - INCLUDING INTEREST OF RS.3 71 78 138/ - WAS NEITHER ISSUED UNDER SUB SECTION (1) OF 143 NOR ON REGULAR ASSESSMENT. RATHER THE REFUND WAS ISSUED AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A) BILASPUR U/S.250 OF THE I. T. ACT. ACCORDINGLY CLAUSE (B) OF SUB SECTION (1) OF SECTION 244A IS APPLICABLE FOR GIV ING INTEREST ON REFUND DUE TO THE A SSESSEE COMPANY AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A) BILASPUR IN ITA NO. 32 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 198/2007 - 08 DATED 28 - 03 - 2008 AND THUS PROVISO TO CLAUSE (A) OF SUB SECTION (1) OF SECTION 244A IS NOT APPLICABLE. AS PER SUB SECTION (3) OF THE AFORESAID SECTION WHERE AS A RESULT OF AN ORDER U/S.250 OF THE ACT THE AMOUNT ON WHICH THE INTEREST WAS PAYABLE UNDER SUB SECTION (1) HAS BEEN INCREASED OR REDUCED AS THE CASE MAY BE THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY AND IN A CASE WHERE THE INTEREST IS REDUCED THE AO SHALL SERVE ON THE ASSESSEE A NOTICE OF DEMAND SPECIFYING THE AMOUNT OF EXCESS INTEREST PAID AND REQUIRING HIM TO PAY SUCH AMOUNT AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE A NOTICE UNDER SECTION 156 AND P ROVISION OF THIS ACT SHALL APPLY ACCORDINGLY. THUS IF THERE IS VARIATION OF INTEREST AS PER SECTION 244A(3) SUCH VARIATION OF INTEREST SHALL BE SUBSTITUTED FOR THE INTEREST ORIGINALLY GRANTED BY REDUCED OR INCREASED AMOUNT AS THE CASE MAY BE BY RECTIFI CATION U/S.154 OF THE ACT. [RELIED ON GARDEN SILK MILLS VS. CIT (1996) 221 ITR 861 (GUJ.)] ACCORDINGLY THE AO HAS JURISDICTION FOR RECTIFYING THE INTEREST PAID/PAYABLE ON REFUND U/S. 154 OF THE I.T. ACT AND THEREFORE WHATEVER THE INTEREST U/S.244A OF THE ACT DUE TO THE A SSESSEE U/S.143(1) OF THE ACT OUGHT TO BE REDUCED FROM THE INTEREST ON REFUND GRANTED TO THE A SSESSEE COMPANY AFTER DETERMINATION OF INCOME BY THE APPELLATE AUTHORITIES . WE FIND THAT ON PERUSAL OF MATERIAL AVAILABLE ON RECORD THE EXCESS C LAIM OF INTEREST TO THE EXTENT OF RS.1 15 74 341/ - IS REQUIRED TO BE CALLED BACK U/S.234D OF THE ACT ONLY BUT NOT THE WITHDRAWAL OF ENTIRE INTEREST OF RS.3 71 78 138/ - GRANTED U/S.244A OF THE 33 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. ACT. THEREFORE THE ORDER OF THE LD. CIT(A) IS WELL REASONED A ND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. THUS GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 48. IN THE RESULT APPEAL OF THE REVENUE IN ITA NO.21/BLPR/2012 IS DISMIS SED. ITA NO.03/BLPR/2012 A.Y. 2008 - 09 49. IN ITA NO.03/BLPR/2012 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDITION WHICH EXPENDITURE AMOUNTING TO RS.732.98 LAKHS IN SPITE OF THE FACTS ON RECORD THAT NO ADMISSIBLE MATERIALS WERE PRODUCED BEFORE THE AO TO SUBSTANTIATE THE CLAIM. (B) THAT IN REACHING THE AFORESAID DECISION THE LEARNED CIT(A) FAILED TO APPRECIATE THAT BOTH THE METICULOUS FINDINGS OF THE AO AS WELL AS THE FACTS HELD IN THE CASE OF THE ASSES SEE THAT THE EXPENDITURE WERE IN THE NATURE OF CHARITY AND IT COULD NOT BE SAID TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS. 2(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDI TION AMOUNTING TO RS.43.29 LAKHS OUT OF RS.45.39 LAKHS WHICH HAS BEEN MADE BY DISALLOWING THE GUEST HOUSE EXPENDITURE IN SPITE OF THE FACTS ON RECORDS THAT THE ASSESSEE COMPANY FAILED TO ESTABLISH THAT THE GUEST HOUSE ARE BEING WHOLLY AND EXCLUSIVELY USED AS TRANSIT CAMP FOR THE OFFICERS AND THE OFFICIALS DURING THEIR TOURS AS CLAIMED IN THE SUBMISSIONS. (B) THAT IN REACHING THE AFORESAID DECISION THE LEARNED CIT(A) FAILED TO BRING ON RECORD ANY ADMISSIBLE EVIDENCE JUSTIFYING THE SAME AND IN SPITE OF THE FACTS ON RECORD THAT THE ASSESSEE WAS CATEGORICALLY ASKED BY THE AO TO GIVE 34 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. DETAILS OF THE TOUR UNDERTAKEN BY THE OFFICERS AND OFFICIALS ETC. WHO HAVE UTILIZED THE GUEST HOUSE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) E RRED IN LAW AND IN FACT IN DELETING THE ADDITION AMOUNTING TO RS.6323.15 LAKHS WHICH HAS BEEN MADE BY DISALLOWING THE EXPENDITURE INCURRED ON SOCIAL OVERHEADS (FUEL AND POWER) IN SPITE OF THE FACTS ON RECORDS THAT THE ASSESSEE COMPANY FAILED TO FURNISH THE MODE OF ELECTRICITY CHARGES RECOVERED FROM THE EMPLOYEES FURNISH TYPES OF QUARTERS ELECTRIC POINTS IN EACH TYPE OF QUARTER RATES OF ELECTRICITY PER UNIT CHARGED BY CSEB AND RECOVERED FROM THE EMPLOYEES BEFORE THE AO. 4. THAT ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDITION AMOUNTING TO RS.1135.86 LAKHS WHICH HAS BEEN MADE BY DISALLOWING THE EXPENDITURE INCURRED ON GRANT TO SCHOOLS AND EDUCATIONAL INSTITUTIONS IN SPITE OF THE FACTS ON RECORDS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COMPANY FAILED TO FURNISH THE BREAK UP OF THE ABOVE EXPENSES. IT IS ALSO PERTINENT TO MENTIONED HERE THAT THE ASSESSEE COMPANY ALSO FAILED TO EXPLAIN WHETHER THE ABOVE EXPENSES WERE IN LIEU OF REIMBURSEMENT OF TUITION FEES OR THE EXPENSES WERE OUTRIGHT DONATION OR CAPITAL NATURE ETC. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDITION AMOUNTING TO RS.2136.88 L AKHS WHICH HAS BEEN MADE BY DISALLOWING THE EXPENDITURE INCURRED ON REIMBURSEMENT OF LPG CYLINDERS TO THE EMPLOYEES IN SPITE OF THE FACTS ON RECORDS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COMPANY COULD NOT EXPLAIN THE ADMISSIBILITY O F THE CLAIM. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE FROM RS.397.63 LAKHS TO RS.198.81 LAKHS MADE BY THE AO TOWARDS ASSESSEES CLAIM OF EXPENDITURE ON ASSETS BELONGING T O THE GOVERNMENT. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDITION AMOUNTING TO RS.1070.61 LAKHS WHICH HAVE BEEN MADE BY DISALLOWING THE EXPENDITURE ON PLANTATION OF TREES AND R ECLAMATION OF LAND RESPECTIVELY IN SPITE OF THE FACTS ON RECORDS THAT THE ABOVE EXPENDITURE IS A CAPITAL EXPENDITURE BECAUSE THE EXPENDITURE INCURRED UNDER THE ABOVE HEADS ENDURE A PERMANENT BENEFIT TO THE ASSESSEE. 8.THAT ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDITION AMOUNTING TO RS.5801.76 35 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. LAKHS OUT OF THE TOTAL DISALLOWANCE OF RS.1 603.52 LAKHS WHICH HAS BEEN MADE BY DISALLOWING OF EXPENDITURE ON ACCOUNT OF TRANSPORTATION CHARGES PAID TO ESM COMPANY IN SPITE OF THE FACTS ON RECORDS THAT THE ASSESSEE FAILED TO FURNISH THE COMPLETE DETAILS SUCH AS QUANTITY TRANSPORTED AND RATE CHARGED BY THE TRANSPORTERS. FURTHER THE ASSESSEE DURING THE COURSE OF ASSESSMENTS PROCEEDINGS FAILED TO F URNISH THE INFORMATION REQUIRED BY THE AO IN RESPECT OF NON ESM COMPANY WHICH WAS NECESSARY TO VERIFY THE ALLEGATION AGAINST THE COMPANY THAT IT HAD PAID LOADING AND TRANSPORTATION CHARGES AT A VERY HIGH RATE I.E. ALMOST 70 TO 80% MORE THAN WHAT WAS PAID T O NON ESM COMPANY. 9.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN DELETING THE ADDITION AMOUNTING TO RS.52842.67 LAKHS WHICH HAS BEEN MADE BY THE DISALLOWING OF OVERBURDEN REMOVAL EXPENSES BY TREAT ING THE SAME AS CAPITAL EXPENDITURE BECAUSE ACCESS TO THE COAL ITSELF CANNOT BE OF THE NATURE WHICH CAN BE DEBITED TO THE PROFIT AND LOSS ACCOUNT BEING DURABLE IN NATURE. FURTHER THE ASSESSEE HAS MADE PROVISION TO THE FUTURE REMOVAL OF OVERBURDEN AND THE PROVISION MADE IS NOT CRYSTALLIZED INTO THE LIABILITY AND ALSO TO DEVOID OF ANY PARTICULAR YEAR. 10. THAT THE LD. CIT(A)S ORDER BEING ERRONEOUS PERVERSE AND CONTRARY TO THE FACTS ON RECORD THE SAME MAY BE REVERSED WHILE THAT OF THE AO RESTORED. 11. THAT THE APPELLANT ASSESSING OFFICER RESERVES THE RIGHT TO AMEND MODIFY OR ADD ANY OF THE GROUNDS OF APPEAL PREFERRED. 50. THE ISSUE RAISED IN GROUND NO.1 BY THE REVENUE RELATES TO THE COMMUNITY DEVELOPMENT EXPENSES. 51. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD DEBITED SUM OF RS.732.98 LAKHS IN P&L ACCOUNT TOWARDS COMMUNITY DEVELOPMENT AND CLAIMED THE SAME AS ALLOWABLE EXPENDITURE SINCE IT WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. HOWEVER T HE ASSESSING OFFICER DENIED THE SAID CLAIM OF ASSESSEE AND ADDED THE SAID 36 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. THE CIT(A) HAS DELETED THE ENTIRE DISALLOWANCE MADE BY THE ASSESSING OFFICER RELYING ON THE DECISION OF NAGPUR BENCH OF TRIBUN AL ORDER DATED 28.02.2002 FOR ASSESSMENT YEARS 1995 - 96 AND 1996 - 97 AND ORDERS OF HIS PREDECESSORS. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW IN APPEAL BEFORE US. 52. BEFORE US LD. DR TOOK US THROUGH THE ORDER OF ASSESSING OFFICER AND SUBMITTED TH AT CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER. HE THUS SUPPORTED THE ORDER OF ASSESSING OFFICER. 53. THE LD. AR ON THE OTHER HAND SUPPORTED THE ORDER OF CIT(A). 5 4 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THAT THE ISSUE OF ALLOWANCE OF EXPENDITURE TOWARDS COMMUNITY DEVELOPMENT IS SQUARELY COVERED BY THE DECISION OF NAGPUR BENCH OF TRIBUNAL IN THE CASE OF SOUTH EASTERN COALFIELDS LTD. VS. J CIT IN ITA NOS.18 TO 22/NAG/2001 FOR ASSESSMENT YEARS 1989 - 90 1990 - 91 1994 - 95 1995 - 96 AND 1996 - 97 ORDER DATED 28.02.2002. THE TRIBUNAL HAS DELIBERATED ON THIS ISSUE VIDE PARAS 18.1 TO 18.6 AND DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING AS UND ER: 1 8.4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD WE HAVE ALSO GONE THROUGH THE VARIOUS CASE LAWS CITED BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES. IT IS OBSERVED THAT THE EXPENDITURE INCURRED BY THE ASSESSEE - COMPANY FOR PROVIDING BASIC AMENITIES LIKE ROAD WIDENING STREET LIGHTING BETTER DRINKIN G WATER FACILITIES ETC. FOR THE RESIDENTIAL AREAS IN AND AROUND THE COMPANY'S AREA OF OPERATIONS 37 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. IN WHICH MAINLY THE WORKERS OF THE ASSESSEE - COMPANY WERE RESIDING WAS DISALLOWED BY THE AO CONSIDERING THAT THE SAME HAS BEEN INCURRED BY THE ASSESSEE TO DIS CHARGE ITS SOCIAL OBLIGATION TOWARDS THE COMMUNITY AS A WHOLE AND THERE IS NO NEXUS BETWEEN SUCH EXPENDITURE AND THE BUSINESS OF THE ASSESSEE COMPANY. IN THIS REGARD WE FIND THAT THE AO HOWEVER IGNORED A VERY RELEVANT AND MATERIAL FACT THAT THE POPULATI ON RESIDING IN THE AREA WHICH WAS BENEFITTED BY THE PROVISION OF SUCH BASIC AMENITIES MAINLY COMPRISED OF THE WORKERS OF THE ASSESSEE - COMPANY AND THEIR FAMILIES. HE ALSO APPEARS TO HAVE OVERLOOKED THE FACT THAT SUCH BASIC AMENITIES COULD NOT HAVE BEEN PROV IDED TO THE ASSESSEE'S EMPLOYEES IN ISOLATION AS THE SAID EXPENDITURE IN ANY CASE HAD TO BE INCURRED FOR THE ENTIRE AREA AS A WHOLE. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT OVER 90 PER CENT OF THE POPULATION RESIDING IN THAT AREA CONSTITUTED ASSESSEE'S OWN WORKERS AND THEIR FAMILIES AND IT APPEARS FROM THE RECORD THAT THIS FACT HAS NOT BEEN DISPUTED BY THE REVENUE AT ANY STAGE. MOREOVER IN THE ABSENCE OF SUCH FACILITIES IN THAT AREA IT WOULD NOT HAVE BEEN POSSIBLE FOR THE ASSESS EE - COMPANY TO GET THE PROPER WORK FORCE FOR ITS OPERATION WITHOUT WHICH IT WAS NOT POSSIBLE TO CARRY ON ITS BUSINESS EFFECTIVELY AND EFFICIENTLY. THE LABOUR BY ITSELF IS AN IMPORTANT INPUT FOR ANY TYPE OF BUSINESS MORE PARTICULARLY FOR THE BUSINESS OF THE ASSESSEE - COMPANY OF MINING OPERATION AND THEREFORE THE EXPENDITURE INCURRED MAINLY FOR THE WELFARE OF THE LABOUR FORCE HAS TO BE TREATED AS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF IT'S BUSINESS. 55. BEFORE US REVENUE HAS NOT POINTED TO ANY DISTINGUISHING FEATURES IN THE FACTS OF THE PRESENT CASE AND THE CASE OF SOUTH EASTERN COALFIELDS DECIDED BY NAGPUR BENCH OF ITAT SO AS TO PERSUADE US TO TAKE A DIFFERENT VIEW IN THE MATTER. THE FACTS AND ISSUE AR E SIMILAR TO THE FACTS AND ISSUE BEFORE THE T RIBUNAL (SUPRA). FOLLOWING THE SAME PARITY OF REASONING WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND T HUS THE GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 5 6 . THE ISSUE RAISED IN GROUND NO. 2 IS AGAINST DISALLOWANCE OF GUEST HOUSE EXPENSES. 38 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 57. THIS ISSUE HAS ALREADY BEEN ADJUDICATED BY US IN ASSESSEES APPEAL IN ITA NO.05/BLPR/2012 IN THE PRECEDING PARAS AND THE FACTS BEING IDENTICAL THE SAME SHALL APPLY MUTATIS MUTANDIS TO THIS ISSUE ALSO. THUS THE GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 5 8 . THE ISSUE RAISED IN GROUND NO.3 RELATES TO EXPENDITURE TOWARDS SOCIAL OVERHEADS. 59 . BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD CLAIMED EXPENSES ON POWE R & FUEL AT RS.12646.29 LAKHS. IT WAS NOTED BY ASSESSING OFFICER THAT ASSESSEE HAD COMMON ELECTRIC METER FROM WHICH ELECTRICITY WAS UTILIZED FOR BUSINESS PURPOSES AND ALSO FOR THE PERSONAL USE OF THE EMPLOYEES. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN AS TO WHY 50% OF THE EXPENSES NOT BE DISALLOWED. THE SUBMISSIONS MADE BY THE ASSESSEE WERE NOT FO UND ACCEPTABLE TO ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THAT NO DETAILS WERE FURNISHED BY ASSESSEE AS TO THE MODE OF RECOVERY OF ELECTRICITY CHARGES FROM EMPLOYEES. HE ALSO NOTED THAT THE DETAILS WITH REFERENCE TO THE TYPE OF QUARTERS ELECTRIC POINTS IN EACH TYPE OF QUARTERS RATE OF ELECTRICITY PER UNIT CHARGED BY CSEB AND RECOVERY FROM THE EMPLOYEES WERE FURNISHED BY ASSESSEE. THE ASSESSING OFFICER THEREFORE A FTER CONSIDERING THE REPLY OF ASSESSEE HAD DISALLOWED 50% OF SAID EXPENSES . AGGRIEV ED BY THE ORDER OF ASSESSING OFFICER ASSESSEE CARRIED THE 39 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. MATTER BEFORE CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE GRANTED FULL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW IN APPEAL BEFORE US. 60 . BEFORE US L D. DR TOOK US THROUGH THE ORDER OF ASSESSING OFFICER AND FROM THE ORDER HE POINTED THAT NO DETAILS ABOUT THE MODE OF RECOVERY FROM THE EMPLOYEES THE CONSUMPTION OF ELECTRICITY BY THE EMPLOYEES AND RATE OF ELECTRICITY PER UNIT CHARGED BY CSEB AND THE RATE AT WHICH RECOVERY IS MADE FROM EMPLOYEES WERE FURNISHED BY THE ASSESSEE BEFORE ASSESSING OFFICER. HE SUBMITTED THAT NO EVIDENCES WERE FURNISHED AND NOTHING IS THERE ON RECORD WITH REFERENCE TO AFORESAID DETAILS AND WITHOUT LOOKING INTO ALL THESE THINGS T HE LD. CIT(A) HAS JUST FOLLOWED THE EARLIER YEARS AND HAVE PROVIDED RELIEF TO THE ASSESSEE ON THIS ISSUE. HE THEREFORE SUBMITTED THAT THE ORDER OF ASSESSING OFFICER BE UPHELD. 61 . THE LD. AR ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND SUPPORTED THE DECISION OF LD. CIT(A). 62 . AFTER HEARING THE PARTIES ON THIS ISSUE WE ARE OF THE CONSIDERED VIEW THAT IT IS UNDISPUTED FACT THAT A NATIONAL COAL WAGE AGREEMENT HAS BEEN ENTERED INTO BY THE ASSESSEE WITH THE EMPLOYEES AND THERE ITSELF FREE USAGE OF ELECTRICITY IS MENTIONED AS 30KWH PER EMPLOYEE PER MONTH ANYTHING 40 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. BEYOND THAT IS SUPPOSED TO BE CHARGEABLE. THE CIT(A)S ORDER DOES NOT DISCLOSE OR PROVIDE ANY FINDING REGARDING HAVING OF ANY EVIDENCE OR ANY SPECIFIC ENQUIRY WHILE DECIDING THIS ISSUE . H E HAS SIMPLY RELIED ON ORDERS OF EARLIER YEARS WHILE PROVIDING RELIEF TO THE ASSESSEE. IN THIS SITUATION RIGHT COURSE WOULD HAVE BEEN T O REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO VERIFY THE CONSUMPTION WHETHER THE EXCESS CONSUMPTION IS AS PER AGREEMENT ENTERED INTO BY THE ASSESSEE THAT THE USE AND EXCESS CONSUMPTION IS RECOVERED FROM THE RESPECTIVE EMPLOYEES. HOWEVER CON SIDERING THE FACT THAT THE MATTER PERTAINS TO ASSESSMENT YEAR 2008 - 09 AND THE NUMBER OF EMPLOYEES INVOLVED AND THE PRACTICALITY OF THE SITUATION WE ARE OF THE CONSIDERED VIEW THAT THE MATTER WILL REMAIN UNDECIDED. IN SUCH A SITUATION AND TO CURTAIL THE U NCERTAINTY WE ARE OF THE VIEW THAT THE ENDS OF JUSTICE SHALL BE MET IF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS RESTRICTED TO 25% OF EXPENSES INCURRED BY THE ASSESSEE TOWARDS SOCIAL OVERHEADS INSTEAD OF 50% DISALLOWED BY HIM. WE THEREFORE DIRECT ACCORDINGLY . THUS THE GROUND NO.3 RAISED BY REVENUE IS PARTLY ALLOWED. 63 . GROUND NO.4 RELATES TO THE DISALLOWANCE TOWARDS EXPENDITURE INCURRED ON GRANT TO SCHOOLS AND EDUCATIONAL INSTITUTIONS. 41 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 6 4 . THE BRIEF FACTS ON THE ISSUE ARE THAT THE ASSESSEE COMPANY HAS DEBITED EXPENSES ON ACCOUNT OF GRANT TO SCHOOLS AND INSTITUTIONS AT RS.1135.86 LAKHS. THE SUBMISSION OF THE ASSESSEE IN THIS REGARD HAS BEEN DEPICTED IN THE ASSESSMENT ORDER. THE ASSESSING OFFI CER NOTICED THAT THE DISALLOWANCE ON THIS ISSUE WAS MADE IN RESPECT OF OTHER SUBSIDIARIES OF COAL INDIA LTD AND EXPENSES ON EDUCATION CAN BE ALLOWED TO THE EXTENT OF REIMBURSEMENT OF TUITION FEES OF THE STUDENTS WHO ARE CHILDREN OF THE ASSESSEES EMPLOYEES ONLY. FURTHER THE ASSESSING OFFICER OBSERVED THAT AS REGARD THE ASSESSEES CONTENTION THAT THE FIRST APPELLATE AUTHORITY HAS ALLOWED THE CLAIM OF THE ASSESSEE IS CONCERNED HE OBSERVED THAT THE ORDER OF FIRST APPELLATE AUTHORITY HAS NOT BEEN ACCEPTED BY T HE DEPARTMENT AND HAS PREFERRED APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL ON THIS ISSUE. HE NOTED THAT T HE INCOME TAX APPELLATE TRIBUNAL DISMISSED THE DEPARTMENTAL APPEAL MERELY ON THE TECHNICAL GROUND THAT THE COMMITTEE ON DISPUTE (COD)S APPROVAL W AS NOT OBTAINED BY THE DEPARTMENT. MOREOVER THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE ITAT NAGPUR BENCH IN ITA NO.20/NAG/2002 DATED 28.02.2005 IN ITS CASE ITSELF FOR THE A.YS. 1994 - 95 ON THE VERY SAME ISSUE THE DEPARTMENT HAS PREFERRED APPEA L U/S.260A BEFORE THE HONBLE HIGH COURT BILASPUR ON 10.07.2002 WHICH IS STILL PENDING FOR DECISION. ACCORDINGLY THE ASSESSING OFFICER DISALLOWED THE EXPENSES ON GRANTS TO SCHOOL UNDER THE HEAD SOCIAL OVERHEADS AT RS.1135.86 LAKHS. 42 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 6 5 . WHEN THE MATTER WAS CONTESTED BY THE ASSESSEE BEFORE CIT(A) T HE LD. CIT(A) PROVIDED THE RELIEF TO THE ASSESSEE FOLLOWING THE ORDER OF HIS PREDECESSOR FOR THE ASSESSMENT YEAR 2002 - 03. FURTHER THE LD. CIT(A) OBSERVED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF WESTERN COALFIELDS LIMITED IN ITS ORDER ITA NO.486/NAG/1996 DATED 04.04.2002 FOR THE ASSESSMENT YEAR 1992 - 93. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW IN APPEAL. 66. BEFORE US LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER. 6 7 . THE LD. AR ON THE OTHE R HAND REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL NAGPUR IN ITA NO. 18/NAG/2001 &ORS DATED 18.02.2002 IN FAVOUR OF THE ASSESSE E. HE THUS SUPPORTED THE ORDER OF CIT(A). WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE FIND THAT THE SIMILAR ISSUE HAS BEEN FACED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL AND THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN THE CASE MENTIONED AFORESAID (SUPRA.) BY OBSERVING AS UNDER: 13.3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS CONTENDED BEFORE US THAT ONLY THE CONTRIBUTION MADE TOWARDS THE RECOGNISED PROVIDENT FUND APPROVED GRATUITY FUND OR SUPERANNUATION FUND IS AN ALLOWABLE EXPENDITURE BUT THE EXPENDITURE INCURRED ON PAYMENTS MADE TO VARIOUS SCHOOLS AND CLUBS IS NOT DEDUCTIBLE UNDER THE SPECIFIC 43 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. PROVISIONS OF SECTION 40A(9) . IN THIS CONTEXT WE FIND THA T A USEFUL REFERENCE MAY BE MADE TO THE FOLLOWING OBSERVATIONS OF THE HYDERABAD BENCH OF TRIBUNAL RECORDED IN THE CASE OF RASSI CEMENT LTD. V. ITO (1994) 47 TTJ (HYD) 254 : (1993) 45 ITD 233 (HYD) : 'THE OBJECT AND INTENTION OF THE LEGISLATURE INTRODUCING SECTION 40A(9) WAS ONLY TO DISCOURAGE CONTRIBUTION TO ANY TRUST WHICH DO NOT BENEFIT THE EMPLOYEES IN ANY MANNER. IN THE INSTANT CASE READING OF THE TR UST DE ED WOULD CLEARLY REVEAL THAT THE BENEFICIARIES OF THE TRUST ARE THE ASSESSEE'S EMPLOYEES. HENCE HAVING REGARD TO THE LEGISLATURE INTENTION IN INTRODUCING THE SAID SECTION AND THE FACT THAT THE CONTRIBUTION CONSTITUTED EMPLOYEES WELFARE MEASURES AS W ELL AS WITH SUCH CONTRIBUTION MADE PURSUANT TO AN AGREEMENT WITH THE EMPLOYEES IS A REQUIREMENT UNDER THE INDUSTRIAL DISPUTE ACT VIOLATION OF WHICH WOULD RESULT IN PENALTY TO THE DEFAULTER AN ASSESSEE IS ENTITLED FOR THE ALLOWANCE OF THE RELIEF ASKED FOR. ' AS A MATTER OF FACT THE IMPUGNED EXPENDITURE ON ACCOUNT OF CONTRIBUTION TO VARIOUS SCHOOLS WAS NOT INCURRED BY THE ASSESSEE - COMPANY VOLUNTARILY BUT THE SAME WAS INCURRED TO DISCHARGE IT'S OBLIGATION IN TERMS OF A NATIONAL COAL WAGE AGREEMENT ENTERED WIT H THE EMPLOYEES AND AS THE SAID AGREEMENT WAS ENFORCEABLE IN LAW UNDER THE INDIAN CONTRACT ACT AS WELL AS THE INDUSTRIAL DISPUTE ACT THE ASSESSEE - COMPANY WAS UNDER A STATUTORY OBLIGATION TO INCUR THE SAID EXPENDITURE. AS SUCH CONSIDERING ALL THE FACTS OF THE CASE AND KEEPING IN VIEW THE AFORESAID DECISIONS INCLUDING THE DECISION OF THIS BENCH IN ASSESSEE'S OWN CASE WE HOLD THAT THE EXPENDITURE INCURRED BY THE ASSESSEE - COMPANY ON ACCOUNT OF GRANTS MADE TO VARIOUS SCHOOLS WAS AN ADMISSIBLE BUSINESS EXPENDITURE AND THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON THIS COUNT. HIS IMPUGNED ORDER ON THIS ISSUE IS THEREFORE REVERSED AND THE AO IS DIRECTED TO ALLOW THE SAID EXPENDITURE. FOLLOWING THE SAME PARITY OF REASONING AS RENDERED IN THE AFORESAID DECISION (SUPRA) WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THUS GROUND NO.4 RAISED BY THE REVENUE IS DISMISSED. 44 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 6 8 . GROUND NO.5 PERTAINS TO THE DISALLOWANCE OF THE EXPENDITURE INCURRED ON REIMBURSEMENT OF LPG CYLINDERS TO THE EMPLOYEES. 6 9 . THE BRIEF FACTS ON THE ISSUE ARE THAT THE ASSESSEE COMPANY HAS CLAIMED A SUM OF RS.2136.88 LACS TOWARDS REIMBURSEMENT OF LPG FOR THE EMPLOYEES IN RESPECT OF PURCHASE OF LPG IN LIEU OF FREE ISSUE OF COAL. THE ASSESSEE SUBMITTED THAT NATIONAL COAL WAGE AGREE MENT ENTITLES EMPLOYEES TO GET FREE ISSUE OF COAL FOR DOMESTIC USE ONLY SUBJECT TO QUANTITY LIMITATION. IT WAS FURTHER SUBMITTED THAT WITH A VIEW TO REDUCE THE COST TO THE ASSESSEE AS WELL AS FOR A BETTER POLLUTION FREE ENVIRONMENT THE ASSESSEE ENTERED IN TO AN AGREEMENT WITH THE TRADE UNIONS TO PROVIDE ONE LPG CYLINDER TO THE ENTITLED EMPLOYEES IN LIEU OF THE FREE ISSUE OF COAL. THIS MEASURE HAS RATHER RESULTED IN THE REDUCTION OF COST TO THE ASSESSEE WHICH COULD BE VERIFIED FROM ITS AUDITED ACCOUNTS VIS - - VIS THE EXPENDITURE INCURRED BY IT IN THE EARLIER YEAR. THE ASSESSING OFFICER REJECTED THE CONTENTIONS OF THE ASSESSEE IN THE MATTER OF DOUBLE TAXATION RELYING UPON THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. S. RADHAKRISHNAN (2002) 254 ITR 561 (SC). THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE COMPANY HAS FAILED TO PROVE THAT THE EXPENDITURE CLAIMED IS EQUIVALENT TO FACILITY ALLOWED. HENCE BY TREATING IT AS FAR BEYOND BUSINESS PURPOSES THE ASSESSING OFFICER DISA LLOWED THE ENTIRE EXPENDITURE OF RS.2336.88 LACS. 45 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 70 . DURING THE FIRST APPELLATE PROCEEDINGS THE LD. CIT(A) FOLLOWING THE ORDER PASSED IN APPEAL NO.107/CIT(A)/BSP/03 - 04 DATED 28.02.2007 FOR ASSESSMENT YEAR 2002 - 03 GRANTED FULL RELIEF TO THE ASSESSEE BY O BSERVING AS UNDER: ON CAREFUL CONSIDERATION OF THE SUBMISSION MADE BY THE LD. AR AND HAVING REGARD TO THE FACT THAT THE APPELLANT COMPANY HAS CLAIMED TO HAVE TREATED THE REIMBURSEMENT OF EXPENDITURE ON ACCOUNT OF THE PROVISION OF LPG TO THE EMPLOYEES AS PERQUISITE AND HAS BEEN DEDUCTING INCOME TAX THEREON THE AOS ACTION IS DISALLOWING THE ABOVE EXPENDITURE IS NOT JUSTIFIED. HENCE THE SAME IS DELETED. HOWEVER THE AO IS DIRECTED TO VERIFY THE CONTENTIONS OF THE APPELLANT COMPANY REGARDING THE COMPUTA TION OF PERQUISITE VALUE IN RESPECT OF THE ABOVE EXPENDITURE AND DEDUCTION OF TAX THEREON AND TAKE NECESSARY ACTION FOR ANY OMISSION IF ANY FOUND IN THIS REGARD. 71 . AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW IN APPEAL BEFORE US. 72. THE LD. AR APART FROM REITERATING ITS SUBMISSIONS BEFORE LOWER AUTHORITIES AND SUPPORTING THE ORDER OF CIT(A) FURTHER SUBMITTED THAT NATIONAL COAL WAGE AGREEMENT ENTITLES EMPLOYEES TO GET FREE ISSUE OF COAL FOR DOMESTIC USE ONLY SUBJECT TO QUANTITY LIMITATION. FOR A CLEANER ENVIRONMENT MANY EMPLOYEES HAVE OPTED TO USE LPG CYLINDERS IN LIEU OF FREE ISSUE OF COAL AND ACCORDINGLY THE SAME IS REIMBURSED TO THE EMPLOYEES SUBJECT TO CERTAIN REGULATION FIXED BY SECL. SUCH REIMBURSEMENT OF LPG CYLINDERS IS CONSIDERED AS PER QUISITES AND NECESSARY TAX IS DEDUCTED FROM THE EMPLOYEES. HE THEREFORE SUBMITTED THAT CIT(A) HAS RIGHTLY ALLOWED THE GROUND OF ASSESSEE. 46 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 73 . BEFORE US T HE LD. DR HAS PLACED STRONG RELIANCE ON THE ORDER OF ASSESSING OFFICER. 74 . WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO GIVEN CONSIDERABLE THOUGHT TO THE FINDINGS OF THE LD. CIT(A). WE FIND THAT AS PER THE NATIONAL COAL WAGE AGREEMENT (PAGE 69 - 77 OF THE PAPER BOOK) THE EMPLOYEES ARE ENTITLED TO GET FREE ISSUE OF COAL FO R DOMESTIC USE ONLY SUBJECT TO SOME QUANTITY LIMITATION. ON PERUSAL OF THE RECORD IT IS APPARENT THAT THE ASSESSEE COMPANY HAS CONSIDERED THE REIMBURSEMENT OF LPG CYLINDER AS A PERQUISITE IN THE HANDS OF THE EMPLOYEES AND REGULAR INCOME TAX IS BEING DEDUC TED FROM SUCH EMPLOYEES IN ACCORDANCE WITH LAW. THE LD. CIT(A) WHILE ADJUDICATING THIS ISSUE HAS FOLLOWED HIS PREDECESSORS ORDER AND OBSERVED THAT THE ASSESSEE COMPANY HAS CLAIMED TO HAVE TREATED THE REIMBURSEMENT OF EXPENDITURE ON ACCOUNT OF THE PROVISI ON OF LPG TO THE EMPLOYEES AS PERQUISITE AND HAS BEEN DEDUCTING INCOME TAX THEREON THE AOS ACTION IS DISALLOWING THE ABOVE EXPENDITURE IS NOT JUSTIFIED . THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IS FAIR AND R EASONABLE AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. THUS GROUND NO.5 RAISED BY THE REVENUE IS DISMISSED. 47 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 75 . THE ISSUE RAISED IN GROUND NO.6 IS WITH REGARD TO DIS ALLOWANCE OF EXPENDITURE INCURRED FOR REPAIRS AND MAINTENANCE OF ASSETS NOT BELONGING TO THE ASSESSEE . 76. THIS ISSUE HAS ALREADY BEEN ADJUDICATED BY US AND ALLOWED THE CLAIM OF ASSESSEE IN ASSESSEES APPEAL IN ITA NO.187/RPR/2008 IN THE PRECEDING PARAS AND THE SAME SHALL APPLY MUTATIS MUTANDIS TO THIS ISSUE ALSO. THUS THE GROUND NO.6 RAISED BY THE REVENUE IS DISMISSED. 7 7 . THE ISSUE RAISED IN GROUND NO.7 IS WITH REGARD TO DISALLOWANCE OF EXPENSES ON TREES PLANTATION AND OTHERS . 7 8 . BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD CLAIMED A SUM OF RS.650.94 LAKHS AND RS.419.66 LAKHS AS EXPENSES INCURRED ON ACCOUNT OF TREE PLANTATION EXPENSES AND OTHERS RESPECTIVELY UNDER THE HEAD ENVIRONMENT EXPENSES. THE ASSESSING OFFICER HAS HELD THAT THIS EXPENDITURE TO BE CAPITAL EXPENDITURE AND ACCORDINGLY DISALLOWED THE SAME. THE CIT(A) IN ITS ORDER HAS DELETED BY STATING IT AS REVENUE EXPENDITURE. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW IN APPEAL BEFORE US. 7 9 . BEFORE US THE LD. DR PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 48 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 80 . PER CONTRA THE LD. AR APART FROM SUPPORTING THE ORDER OF CIT(A) ALSO RELIED ON THE FOLLOWING DECISIONS: - ( I ) CIT VS. MALAYALAM PLANTATION LTD. (1964) 53 ITR 140 (SC) ( II ) CIT VS. GOGTE M INERALS (1996) 220 ITR 29 (KAR) ( III ) SMT. K. SURYAKUMARIVENU VS. ACIT (2016) 70 TAXMANN.COM 310 81 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THAT THE ASSESSING OFFICER HAS DISALLOWED THE EXPENDITURE INCURRED BY THE ASSESSEE ON ACCOUNT OF TREE PLANTATION EXPENSES AND OTHERS TO BE CAPITAL IN NATURE WHEREAS THE CIT(A) RELYING ON THE ORDERS OF HIS PREDECESSORS HAS DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY STAT ING IT AS REVENUE EXPENDITURE. WE FIND THAT THIS ISS UE IS SQUARELY COVERED BY THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MALAYALAM PLANTATION LTD. (SUPRA) CIT VS. GOGTE MINERALS (SUPRA) AND SMT. K. SURYAKUMARIVENU VS. ACIT (SUPRA) . BEFORE US NO FALLACY WITH THE FINDING OF CIT(A) HAS BEEN POINTED BY LD. DR. WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). HENCE WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXPENSES ON TREES PLANTATION AND OTHERS. THUS THE GROUND NO.7 RAISED BY THE REVENUE IS DISMISSED. 49 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 82 . THE GROUND NO.8 PERTAINS TO THE EXPENDITURE INCURRED ON COAL TRANSPORTATION PAID BY THE COMPANY TO THE EX - SERVICEMEN TRANSPORT COMPANIES. 83 . BOTH THE PARTIES FAIRLY ADMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) WHICH IS SIMILAR TO THE GROUND NO.3 RAISED IN ITA NO.187/JAB/2008. THEREFORE OUR DECISION RENDERED IN ITA NO.187/JAB/2008 ON THIS ISSU E SHALL APPLY MUTATIS MUTANDIS TO THE GROUND NO.8 IN ITA NO.03/BLPR/2012. THUS THE GROUND NO.8 RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 84 . GROUND NO.9 RELATES TO THE DISALLOWANCE FOR FUTURE REMOVAL OF OVERBURDEN EXPENSES OF RS.5 2842.67LACS. 85 . THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD MADE PROVISION OF RS.52842.67 LACS FOR FUTURE REMOVAL OF OVERBURDEN. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PROVISION HAS NOT CRYSTALLIZED INTO A LIABILITY AND THEREFORE CANNOT BE AL LOWED. HE ACCORDINGLY DISALLOWED A SUM OF RS.52842.67 LACS . WHEN THE MATTER CARRIED BEFORE CIT(A) HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW BEFORE US. 50 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. 86 . THE LD. AR ON THE OTHER HAND S UBMITTED THAT THE BASI S OF CREATION OF RESERVES IS ON A SCIENTIFIC AND REASONABLE BASIS AND THAT THIS EXPENDITURE HAS BEEN ALLOWED IN EARLIER YEARS. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT JABALPUR BENCH IN THE CASE OF NORTHERN COALFIELDS LTD. VS. ACIT CIRCLE 2(1) JABALPUR 59 TAXMANN.COM 394 ( JABALPUR - TRIB.) . HE THUS SUPPORTED THE ORDER OF CIT(A). 8 7. BEFORE US LD. DR POINTED OUT THAT THE EXPENDITURE IS IN THE NATURE OF RESERVES AND THEREFORE THE LIABILITY HAS NOT CRYSTALIZED AND THEREFORE IT IS NOT AN ALLOWABLE EXPENDITURE. HE THUS SUPPORTED THE ORDER OF ASSESSING OFFICER. 8 8 . WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE FIND THAT JABALPUR BENCH OF TRIBUNAL IN THE CASE OF NORTHERN COALFIELDS LTD. VS. ACIT (SUPRA) HAS DELIBERATED ON THE ISSUE VIDE PARAS 27 TO 41 OF ITS ORDER AND ALLOWED THE CLAIM OF ASSESSEE BY HOLDING THAT THE SAME IS B USINESS EXPENDITURE. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - 40. WE ARE UNABLE TO FIND ANY LEGALLY SUSTAINABLE MERITS IN THIS OBJECTION EITHER. THE CRITERION ON THE BASIS WHICH CALL IS TAKEN AS TO BE WHETHER A MINE CAN BE TREATED AS A DEVEL OPMENT MINE OR AS A REVENUE MINE IS AS WE HAVE NOTED IN PARAGRAPH 22 EARLIER IN THIS ORDER IS UNIFORM ALL ALONG NOT ONLY IN THIS CASE OF THIS ASSESSEE BUT IN THE CASE OF OTHER SIMILARLY PLACED ASSESSEES AND THE REVENUE AUTHORITIES HAVE ACCEPTED THAT CRI TERION ALL ALONG. IT IS A PURELY A FACTUAL MATTER WHICH PERMEATES THROUGH DIFFERENT ASSESSMENT YEARS AND FOR THE DETAILED REASONS DISCUSSED EARLIER THERE IS NO GOOD REASON TO DISTURB THIS CRITERION. IN ANY CASE THE AUTHORITIES BELOW HAVE 51 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. NEITHER SUGGEST ED ANY ALTERNATIVE CRITERION WHICH WILL BE APPROPRIATE ON THE FACTS OF THIS CASE NOR HAVE THEY HAVE DEMONSTRATED THAT THE FACTS IMPLICIT IN THEIR STAND ACTUALLY EXIST. AS A MATTER OF FACT THE APPREHENSIONS OF THE ASSESSING OFFICER SEEM TO BE PURELY HYPO THETICAL AND IN THE REALM OF CONJECTURES AND SURMISES INASMUCH AS NOT ONE INSTANCE IS SHOWN IN WHICH THE OVERBURDEN REMOVAL EXPENSES BOOKED IN THE ACCOUNTS AS REVENUE EXPENDITURE ACTUALLY PERTAIN TO REMOVAL OF OVERBURDEN ONLY AT THE SURFACE LEVEL AND SHO ULD BE THEREFORE TREATED AS CAPITAL EXPENDITURE. SIMILARLY WHILE DECLINING THE DEDUCTION OF OVERBURDEN REMOVAL AS CAPITAL EXPENDITURE THE ASSESSING OFFICER AS ALSO THE CIT(A) HAS NOT TREATED ANY PART OF THIS EXPENDITURE WHICH ESSENTIALLY INCLUDES TH E EXPENDITURE INCURRED ON REMOVING OVERBURDEN IN THE PROCESS OF COAL MINING AND PRODUCTION AS REVENUE EXPENDITURE. IT SEEMS TO BE MORE OR LESS AN UNDISPUTED POSITION GIVEN THE NATURE OF OVERBURDEN REMOVAL EXPENSES AS WE HAVE DISCUSSED EARLIER THAT A PAR T OF THE OVERBURDEN REMOVAL EXPENSES IS ADMITTEDLY REVENUE EXPENDITURE BUT IF WE HAVE TO UPHOLD THE STAND OF THE AUTHORITIES BELOW ENTIRE OVERBURDEN REMOVAL EXPENSES IS REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE ELIGIBLE ONLY FOR AMORTIZATION UNDER SE CTION 35D. IN ANY CASE THERE IS NOTHING ON RECORD TO ESTABLISH OR EVEN SUGGEST THAT EXPENSES INCURRED ON REMOVAL OF OVERBURDEN AT THE SURFACE LEVEL WHICH WERE CAPITAL EXPENDITURE IN NATURE HAVE BEEN CLAIMED AS REVENUE DEDUCTION ON THE STRENGTH OF COAL MINING IN ANOTHER PIECE OF LAND WITHIN THAT COAL MINE. 41. IN VIEW OF THESE DISCUSSIONS AS ALSO BEARING IN MIND ENTIRETY OF THE CASE WE CONSIDER IT FIT AND PROPER TO DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF RS 2 05 616.72 LAKHS. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. RESPECTFULLY FOLLOWING THE SAME PARITY OF REASONING AS RENDERED IN THE ABOVE MENTIONED DECISION (SUPRA) WE DECIDE THIS ISSUE IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE. WE FURTHER FIND THAT THE EXPE NDITURE WAS ALLOWED BY REVENUE TO THE ASSESSEE IN THE PAST. THUS THE GROUND NO.9 RAISED BY THE REVENUE IS DISMISSED. 8 9 . IN THE COMBINED RESULT ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IN ITA 52 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. NO.21/BLPR/2012 IS DISMISSED AND THE APPEAL OF REVENUE IN ITA NO.03/BLPR/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRO NOUNCED ON 6 TH DAY OF NOVEMBER 201 9 . SD/ - SD/ - PARTHASARATHI CHAUDHURY ANIL CHATURVEDI JUDICIAL MEMBER ACCOUNTANT MEMBER / RAIPUR ; / DATED : 6 TH NOVEMBER 2019 . GCVSR / SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT. 5 . / DR ITAT RAIPUR BENCH RAIPUR . 6. / GUARD FILE. / BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY / ITAT RAIPUR . 53 ITA NO.187/JAB/2008 &ORS SOUTH EASTERN COALFIELD LTD. DATE 1 DRAFT DICTATED ON 04 /05 .11 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 0 6 . 11 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER