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2020 (9) TMI 1050 - AT - Income TaxDifference between opening and closing value of non-vendible coal - HELD THAT - We note that the Ld. CIT(A) has given relief to the assessee by taking note of the decision of this Tribunal in assessee s own case for AY 2003-04 to 2005-06 which is seen placed of the Tribunal s order wherein we note that this issue is covered in favour of the assessee. Allowing 80% of the additional depreciation claimed u/s. 32(1)(iia) - HELD THAT - Since the main grievance of the revenue is that the assessee failed to justify the admissibility of additional depreciation by producing the break up of assets and also taking note of the action of the Tribunal in assessee s own case for AYs 2008-09 and 2009-10 we set aside the issue back to the AO with a direction for fresh adjudication after considering the details of plant and machinery used by the assessee for the purpose of extraction of coal. We note that the assessee has claimed to have produced the audited financial statement which gave all the required particulars before the authorities below. Since we are remanding the issue back to the AO, we direct the assessee to once again produce all the details as required by the AO in support of its claim for deduction of additional depreciation. It is to be kept in mind by the AO that the assessee is a Public Sector Undertaking and its accounts are audited by the Comptroller of Auditor General of India (CAG) and such audited statements have its own strength and has survived the scrutiny of the premier constitutional body. Needless to say that additional depreciation needs to be granted on such plant and machinery if it has been used for production of coal. Addition on stowing subsidy difference - HELD THAT - CIT(A) has rightly noted that the total subsidy due for the year under consideration (AY 2009-10) was ₹ 50,70,29,057/- which has been shown in the P L Account under the head other receipts . CIT(A) has rightly noted that ₹ 2647.52 lacs is not the subsidy received. Subsidy due at the beginning of the year was ₹ 29,89,97,877/- out of which ₹ 28,91,19,093/- was received. Hence, the balance was to be received on account of loan was ₹ 98.79 lacs which is in respect of earlier year and the amount of ₹ 2548 lacs due to the current year aggregate to ₹ 2647 lacs. Balance receivable which has been shown in the Balance Sheet. Therefore, the Ld. CIT(A) has rightly deleted the addition of ₹ 98.79 lacs since its last year s subsidy receivable and not pertaining to this year. Addition under the head hire charges of bus, ambulance etc. and being grant to sports and recreation clubs - HELD THAT - Since the Tribunal has set aside the order or the Ld. CIT(A) and remanded the question of incurring these expenses to the AO for fresh consideration with the liberty to assessee to adduce evidence to substantiate its claim for deduction of the aforesaid expenditure, we also set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO to be decided afresh as ordered in AY 2003-04 to 2005-06. This ground of appeal of revenue is allowed for statistical purposes. Allowing 50% of the donation claimed by the assessee - HELD THAT - We note that on similar issue of expenditure claim in respect of donation given to the local clubs during Durga Puja etc. was before the Hon ble Calcutta High Court in CIT Vs. Bata India Ltd. 1993 (3) TMI 89 - CALCUTTA HIGH COURT wherein it was held to be an allowable expense. However, we find that even though the assessee in its reply has stated that certain donations were given to the local clubs etc. the amount given as donation to the local clubs are not discernible from the materials placed before us, so it has to be verified by the AO and the AO to allow 100% deduction on the claim of expenditure in respect of donations given by the assessee to the local clubs. Coming to the assessee s donation to the Ram Krishna Mission and Bharat Sevashram Sangha is concerned again the facts are not clear. So it needs verification by AO and if the donee societies have 80G certification, then deduction in accordance to law should be given to the assessee in respect of the donation given to it. So, we remand this issue back to the file of the AO for factual verification . Ad hoc on account of CSR expenses - HELD THAT - Expenditure claimed by the assessee is also necessary in view of the National Coal Wage Agreement entered into between the management and employees union and also as per the Companies Act, 1956 as well as Companies Act, 2013. We note that the amendment in section 37(1) of the Act has been introduced w.e.f. 1st April, 2015 and does not apply on the facts of the case and the disabling provision as stated in Explanation 2 to section 37(1) refers only to such corporate social responsibility expenditure as u/s. 135 of the Companies Act, 2013 and as such it cannot have any application for the period not covered by the statutory provision which itself came into existence in the year 2013. And any way this disabling provision cannot be held to be retrospective in operation As relying on SOUTH EASTERN COALFIELDS LTD. VERSUS JOINT COMMISSIONER OF INCOME-TAX 2002 (2) TMI 344 - ITAT NAGPUR direct the AO to allow the claim of expenditure of assessee on account of CSR expenses.
Issues Involved:
1. Deletion of addition by CIT(A) regarding the difference in the value of non-vendible coal. 2. Allowance of additional depreciation claimed under Section 32(1)(iia) of the Income-tax Act. 3. Deletion of addition on stowing subsidy difference. 4. Deletion of additions related to hire charges of bus, ambulance, and grants to sports and recreation clubs. 5. Allowance of donations under Section 37(1) of the Income-tax Act. 6. Ad hoc disallowance of CSR expenses. Issue-wise Detailed Analysis: 1. Deletion of Addition by CIT(A) Regarding the Difference in the Value of Non-vendible Coal: The revenue's appeal contested the deletion of an addition of ?22,43,24,000 by the CIT(A), which was based on the difference between the opening and closing value of non-vendible coal. The CIT(A) relied on prior Tribunal orders in the assessee's favor for AYs 2003-04 to 2005-06. The Tribunal noted that the value of non-vendible coal was considered nil in the previous AY 2008-09 and should remain nil for AY 2009-10, thus deleting the addition. The Tribunal upheld the CIT(A)'s decision, confirming that there was no change in facts or law. 2. Allowance of Additional Depreciation Claimed Under Section 32(1)(iia) of the Income-tax Act: Both the revenue and the assessee appealed against the CIT(A)'s decision to allow 80% of the additional depreciation claimed. The AO had allowed only 50% of the claim. The Tribunal noted that in earlier years, the AO had allowed 100% of the additional depreciation after verification. The Tribunal remanded the issue back to the AO for fresh adjudication, directing the assessee to provide detailed evidence of plant and machinery used for coal extraction. 3. Deletion of Addition on Stowing Subsidy Difference: The revenue's appeal contested the deletion of an addition of ?98.79 lakhs related to stowing subsidy. The AO had added this amount, claiming it was not shown correctly. The CIT(A) clarified that the subsidy receivable included amounts from previous years, and the total subsidy due for AY 2009-10 was correctly shown in the P&L account. The Tribunal upheld the CIT(A)'s decision, noting that the AO had misunderstood the subsidy receivable and confirmed the deletion of the addition. 4. Deletion of Additions Related to Hire Charges of Bus, Ambulance, and Grants to Sports and Recreation Clubs: For AY 2012-13, the revenue's appeal contested the deletion of ?4,71,00,000 under hire charges and ?38,00,000 for grants to sports and recreation clubs. The CIT(A) had relied on Tribunal decisions for AYs 2003-04 to 2007-08. The Tribunal noted that similar issues were previously remanded to the AO for fresh consideration and followed the same approach for these issues, remanding them back to the AO for verification and fresh adjudication. 5. Allowance of Donations Under Section 37(1) of the Income-tax Act: Both the revenue and the assessee appealed against the CIT(A)'s decision to allow only 50% of the donation of ?17 lakhs claimed by the assessee. The AO had disallowed the entire amount due to lack of proof. The Tribunal noted that donations to local clubs and organizations should be verified by the AO. If the donee societies had 80G certification, the deduction should be allowed. The Tribunal remanded the issue back to the AO for factual verification. 6. Ad Hoc Disallowance of CSR Expenses: The assessee's appeal contested the ad hoc disallowance of ?4,55,50,000 on CSR expenses. The Tribunal noted that the assessee, a Public Sector Undertaking, incurred these expenses as per the National Coal Wage Agreement and Companies Act requirements. The Tribunal referred to the Nagpur Bench decision in a similar case, which allowed such expenses as revenue expenditure. The Tribunal directed the AO to allow the CSR expenses, emphasizing the necessity and consistency of these expenses for the assessee's business operations. Conclusion: The appeals of both the assessee and the revenue were partly allowed for statistical purposes, with several issues remanded back to the AO for fresh consideration and verification. The Tribunal upheld the CIT(A)'s decisions where appropriate and provided detailed directions for further proceedings on remanded issues.
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