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TMI Blog2015 (8) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the learned Commissioner of Income-tax (Appeals)-VI, Kolkata has erred in law as well as on facts of the case by deleting the addition of Rs. 1,03,55,795 on account of capital expenditure by not considering the fact that the payment was made for getting the mining rights on the land on which forest was there and without which no mining could have been possible. 2. That the appellant craves for leave to add, delete or modify any of the grounds of appeal before or at the time of hearing." 3. The brief facts of the case are that the assessee had debited a sum of Rs. 1,03,55,795 under the head "Environment and Ecology" in its profit and loss account. The assessee was asked b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he damage caused earlier and which may be caused in the future. The hon'ble Supreme Court in its decision in Writ Petition No. 202 of 1995 has ordered the users to pay the NPV to the Forest Department. The Supreme Court has categorised it as a fee. The Assessing Officer held that the said expenditure was capital in nature. 3.2. Upon the assessee's appeal the learned Commissioner of Income- tax (Appeals) decided the issue in favour of the assessee by holding as under : "I have carefully considered all the facts and circumstances of this issue. On examination of the letters of the Divisional Forest Officer, Bonai Division, it is seen that the assessee had been asked to make this payment of Rs. 1,03,55,795 for the following purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mply because this is a one time payment, the same cannot be treated as capital expenditure." Further by referring to the decision of the hon'ble apex court in the case of Bikaner Gypsums Ltd. v. CIT [1991] 187 ITR 39 (SC) the learned Commissioner of Income-tax (Appeals) held that the amount of Rs. 92,51,000 was a revenue expenditure allowable as deduction in the assessment year 2007-08. 3.3. The learned Commissioner of Income-tax (Appeals) further held that "now if we consider the second amount of Rs. 11,04,795 it is seen that this amount has been collected by the Forest Department from the assessee for implementation of Regional Wild Life Management Plan prepared for Bonai and Keonjhar Divisions of Orissa. It is seen that this amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the case of the assessee and the expenditure cannot be treated as capital expenditure. The Tribunal had also referred to several other case law. The Tribunal had concluded as under : "15. In view of the above decision and the facts of the case before us, we hold that the learned Commissioner of Income-tax (Appeals) has rightly held that the above expenditure of Rs. 3,95,56,500 paid by the assessee as NPV to enable the assessee to carry on its mining business is revenue in nature, which is allowable as business expenditure under section 37(1) of the Act. Therefore, we uphold the order of the learned Commissioner of Income-tax (Appeals) by rejecting ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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