9911796707
TMI Blog2018 (3) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessments u/s.143(3) of the Act for the assessment years under consideration, making additions/disallowance. On appeal, the CIT(A) partly allowed the appeals of the assessee. Hence, both the assessee and the revenue are in appeal before us. 3. Now take up the assessee's appeal. 4. The first common issue agitated by the assessee is that the CIT(A) has erred in confirming the action of the Assessing Officer in making addition on account of valuation of closing stock of Rs. 9108.67 for the assessment year 2010-11, Rs. 7060.22 lakhs for the assessment year 2011-12, Rs. 8340.60 lakhs for the assessment year 2012-13 and Rs. 4714.00 lakhs for the assessment year 2013-14. 5. We discuss the facts for the assessment year 2010-2011 and the decision will apply mutatis-mutandis to other assessment years. 6. The brief facts of the case are that the Assessing Officer on perusal of annual report found that the assessee has declared in its printed accounts in notes on account that the stock of coal valued by the assessee as on 31.3.2010 lying at different collieries was Rs. 34659.68 lakhs, which is calculated on the basis of lower of cost or net reaslisable value mines wise, and if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment vide letter dated 27.6.1997, it is observed that the market price of different grade of coal differs from Rs. 262.20 per Ton to Rs. 766.60 per Ton whereas the cost price or NRB whichever is lower varied between Rs. 94.73 per Ton to Rs. 2439.51 per Ton. Further, it is observed that for the financial year 2011-12 in the case of Nandira Colliery, the cost of production of coal was Rs. 2759. per ton whereas the net reaslisable value was Rs. 1140 per Ton and in the case of Talcher Colliery, it was Rs. 4480.68 per ton and Rs. 2800 per ton respectively and, accordingly, the stock was valued at cost or NRB whichever is lower. This method of valuation is consistently followed by all the subsidiaries of CIL. Accordingly, following the direction of CIL and as the grade, quality, cost differed, MCL valuing its stock mine-wise as an independent cost centres and profit-making centre consistently since 1996-97. 8. The Assessing Officer relied on the provisions of section 145A of the Act and found that the assessee cannot adopt the method of independent valuation of closing stock. The Assessing Officer further emphasised that the correct method of valuation of closing stock of raw coal has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuing stock of coal and conveyed its decision to all its subsidiaries through letter dated 09.06.1997 before finalisation of the accounts for the said financial year 1996-97. Subsequently, there are directions of MCL Finance Dept by circular letter No. 732 dated 27.06.1997 for valuation of closing stock of coal to all its area manager. The assessee company has underground as well as opencast mines and the quality and grade of coal, the cost of production and the sale price differs very widely. Hence, all the subsidiaries are valuing its stock at cost or market price whichever is lower mines wise. From the valuation of closing stock for the FY 2006-07, it can be seen that the cost at Hingula OCP is only Rs. 80.37 per ton whereas the NRV of Orient mine no. 4 is Rs. 200/- per ton which means that the cost of production at orient mine no. 4 is more than the NRV. The accounting policy of the assessee during the FY 1996-97 in respect of valuation of coal referred at para 7 .4 of Audited accounts and the effect of change at para 4.2 (ii) is a furnished. Further, circular was issued by the Holding company i.e. Coal India Limited to all its subsidiaries for implementation of uniform acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndard -2, Valuation of inventories, the prime objective is that a primary issue in accounting for inventories is the determination of the value at which inventories are carried in the financial statements until the related revenues are recognised. The Accounting Standard -2 has been revised in 2016, whereas the assessment year involved in the present case is 2010-2011. Though in the revised AS-2, it was mentioned that "producers' inventories of livestock, agricultural and forest products, and mineral oils, ores and gases to the extent that they are measured at net realisable value in accordance with well-established practices in those industries" but the assessee company holds the mines and made the valuation independently for each mine and also established the cost centres for revenue purposes. The cost centres provide the profit or loss incurred by each mine in its operation. The AS-2 mentions that in the case of ore, the valuation is measured at net realisable value in accordance with the well-established practices in those centres. There is no dispute with respect to the cost of value of closing stock but on the overall aspect where the valuation has to be made by the company b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears made addition in respect of difference. We, on perusal of the assessment order found that the Assessing Officer has relied on the printed balance sheet and having supported with the provisions of section 145A of the Act and has not accepted the value of closing stock whereas the provisions of Section 145A prescribes the method of accounting policy regularly employed by the assessee. In the present case, the assessee is a 100% subsidiary of Coal India Limited and as per the directions of the Holding company, uniform accounting policy has been adopted regularly and this regular method of accounting comply with the provisions of valuation of stock and accounting principles. These facts are not disputed. The method of valuation of closing stock shall be in consonance with the accounting standard of ICAI and the provisions of section 145A of the Act. In the present case, the Coal India Limited, which is a Government of India enterprise holding 100% shares of the assessee company and similar shareholding in other subsidiaries, which the ld A.R. explained that they are adopting this method. The audit report of the assessee referred at page 94 prescribes the method of valuation and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted by other subsidiaries, which are in the similar line of business as per Coal India Ltd letter dated 31.3.2010 (supra). Accordingly, we remit this disputed issue to the file of the Assessing Officer who shall verify and call for the information in respect of other subsidiaries who are following this method of accounting and if so, same be considered on merits and the assessee shall co-operate in submitting the information and this ground of appeal is allowed for statistical purposes. Consequently, this ground taken by the assessee for other assessment years i.e. 2011-12 to 2013-14 are allowed for statistical purposes. 16. The second common issue relates to confirmation of addition of Rs. 31475.28 lakhs for the assessment year 2010-2011, Rs. 25778.15 lakhs for the assessment year 2011-12, Rs. 32242.12 lakhs for the assessment year 2012-13, Rs. 24010.50 lakhs for the assessment year 2013-14 and Rs. 15912.00 lakhs for the assessment year 2014-15 due to change in valuation of closing stock and overburden removal adjustment debit/credit. 17. The Assessing Officer found from the audit report that due to the change in method of valuation of closing stock as per uniform policy of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing stock mine-wise and the valuation of closing stock of coal are interconnected and since we have discussed on the applicability of the provisions, facts and reasons for valuation of stock centre on the first disputed issue. Therefore, we remit this disputed issue to the file of the Assessing Officer for appropriate adjudication afresh and the ground of appeal of the assessee is allowed for statistical purposes. Hence, this issue for the assessment years 2010-11 to 2014-15 is restored to the file of the Assessing officer for fresh adjudication. 22. Ground No.3(3) for the assessment year 2010-11 and Ground No.3(5) for the assessment year 2011-12 relates to interest paid to foreign institution through CIL. 23. The Assessing officer found that the assessee has disclosed Rs. 382.21 lakhs in its balance sheet as unsecured loan from the holding company, Coal India Limited as under: i) Loans from IBRD & JBIC : Rs.258,71 lakhs ii) On deferred payment : Rs. 13.64 lakhs iii) Other interest : Rs. 109.86 lakhs Total : Rs.282.21 lakhs. 24. The Assessing officer noted that a copy of letter dated 26.3.1998 from the Ministry of Finance, Department of Economic Affair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of claim of World bank and M/s. Liebherr France S.A. France that no TDS on interest liability arose due to agreement with World Bank and Double Taxation Avoidance Agreement with France. In respect of other interest on cess collected from customers of Rs. 109.86 lakhs, as per the Supreme Court judgment dated 31.7.2001 the money is refundable to the customers alongwith interest. But the assessee has expressed that the company has not identified the customers to whom the refund is to be made and this fact was disclosed in schedule -P of the audit report at page 99. We perused the audit report at page 10.0 (a) at page 99-100 where these facts were explained that the assessee company has not identified the customers to whom the refund is to be made and, therefore, the finalisation of liability to refund the same is yet to be done. We are of the opinion that this vital fact needs to be verified and examined as explained by ld A.R. that from assessment year 2012-13 this interest claim was allowed. Accordingly, in the interest of justice, we remit this issue to the file of the Assessing Officer who shall verify the different payments of interest made to World bank as covered by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that the tenancy rights cannot be construed as intangible assets falling within meaning Explanation to section 32(1) and, therefore, there is no question of allowing depreciation on said rights. 46. We find that the assessee has raised these additional grounds as per the direction of Hon'ble High Court of Orissa, Cuttack in W.P (C) No.24 of 2013 and Misc. Case No.5716 of 2013 order dated 20.3.2013. In view of above, we admit these additional grounds for our consideration. 47. On merits also, we find force in the submission of ld D.R. that the depreciation is not allowable u/s.32(1)(iii) of the Act in respect of intangible assets, which is supported by judicial pronouncements cited above. In view of above, we dismiss these grounds filed by the assessee." 31. In view of above, we hold that the lease hold rights are not eligible for depreciation u/s.32(1)(ii) of the Act considering it as intangible rights and, accordingly, dismiss the ground of appeal of the assessee. 32. Ground No.3(5) relates to confirmation of disallowance of Prospecting & Boring expenses of Rs. 1138.73 separately claimed fin computation of income, and Ground No.3.8 relates to confirmation of disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the assessee, the CIT(A) directed the Assessing Officer to calculate the write off/write back considering the facts that when the discarded asset is sold and when the asset is destroyed as per the provisions of the Act. 41. Having heard both the sides, we do not find any error in the order of the CIT(A) as he has simply directed the Assessing Officer to calculate the write off/write back on the basis of guidelines given in the impugned order. Hence, this ground of appeal of the assessee is dismissed. 42. Ground No.3.10 relates to development expenditure of 2238.70 lakhs. 43. The Assessing Officer observed that the assessee has failed to produce the details in conformity with the direction of the ITAT on similar issues for earlier years such as bifurcation of capital expenditure and revenue expenditure/amount spent on developing mines and commercially operating mines included under the head "development expenditure". Therefore, the Assessing Officer did not accept the contention of the assessee as 100% revenue expenditure and hence, rejected the claim of the assessee. 44. On appeal, referring to the decisions of the Tribunal in assessee's own case for the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal appraisal of stores articles which mainly pertains to spares store of those machineries and HEMM which has already been scrapped. The Assessing Officer disallowed on the ground that the assessee could not furnish the details as well as evidence thereof, which was confirmed in appeal by the CIT(A) 53. Both the parties agreed that identical issue has been decided by the Cuttack Bench of the Tribunal in assessee's own case for the assessment years 2003-04 to 2007-08 in ITA Nos.226 & 277/CTK/2009 and ITA Nos.456, 457 & 458/CTK/2010. The decision is also followed in the assessment year 2008-09 in ITA No.73/CTK/2012 order dated 3.1.2018 The relevant portion is reproduced as under: "We have heard both the parties and perused the material available on record. We find that the authorities below have disallowed the claim of the assessee mainly on the ground that no details thereof could be furnished by the assessee. The ld A.R of the assessee vehemently contended that the details thereof wee produced before the ld CIT(A) including the area-wise details of amount charged against non-moving stores and spares. He also submitted a copy of such details which is found placed at page 165 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly all the income and expenditure are being accounted for on accrual basis. The assessee is an organized and large entity. The PSU maintains proper books of account and suitable evidence for all income accrued and expenses incurred. Suitable evidence depends on various factors like nature of income/payment, nature of claimant, nature of payer/payee, place of receipt/payment, amount of receipts/payment etc. In such an organization there is suitable internal check and control. Business is carried in a professional manner. Moreover, the accounts of the assessee are subjected to audit by the Statutory auditor, CAG and other Govt, agencies and none of them has raised any point in this respect. Ld A.R. submitted that the assessee has shown an interest income of 1197.52 crores and not Rs. 1196.28 crores as mentioned by the Ld. AO. The amount of Gross interest reflected in Form 26AS as on 13.01.2015 is Rs. 1181.54 crores u/s. 194A and Rs. 0.65 crore u/s. 193, totaling to Rs. 1182.19 crores which is much lower than the amount of interest income shown by the assessee. This clearly establish that Form No. 26AS is not at all a reliable document for arriving at the income of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting period and furnish party wise actual payment, the Assessing Officer disallowed the same. 64. On appeal, the CIT(A) upheld the action of the Assessing Officer on the ground that the assessee has not been able to correlate the documents and the basis of journal entry made. 65. Before us, ld A.R. explained that the assessee has details and same can be produced and prayed for an opportunity to explain with evidence. We, after considering the rival submissions, find that the assessee has claimed Rs. 552.46 lakhs towards site maintenance expenses through a journal entry. The basis of the entry made by the assessee has not been explained but as the ld A.R. explained and prayed for an opportunity to substantiate its claim, we consider it appropriate to remit the issue to the file of the Assessing officer to pass the issue afresh. Ground No.3(6) of the assessee for assessment year 2011-12 is allowed for statistical purposes. 66. Ground No.3(7) of appeal for the assessment year 2011-12 relates to addition of Rs. 305.32 lakhs made due to change in accounting method for repair job. 67. The Assessing Officer found that due to change in the accounting method of maintenance of expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be allowed thereon. Therefore, we remit this issue to the file of the Assessing Officer allow the correct depreciation by reducing the value of block of assets by sale value. This ground of appeal of the assessee for A.Y. 2011-12 is allowed for statistical purposes. 74. Ground No3(5) of appeal is against addition u/s.14A for assessment year 2014-15 is not pressed due to smallness of amount and hence, same is dismissed as not pressed. 75. Ground No.3(4) of appeal for assessment year 2014-15 is directed against confirmation of addition of Rs. 5.01 crores made on other expenses . 76. The Assessing Officer found that the assessee has claimed Rs. 6.19 crores as "other expense". In response to Assessing Officer/s requisition, the assessee submitted the details of Rs. 6.19 crores. On perusal of the same, the Assessing officer found that Rs. 4.41 crores was incurred towards "other welfare expenses" and Rs. 0.60 crores was incurred towards "miscellaneous -other resettlement". Since the assessee failed to justify the expenses, the Assessing Officer added the same to the total income of the assessee. 77. The CIT(A) upheld the addition in the absence of required details and explanations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer did not allow the claim of the assessee on the ground that the assessee failed to produce any documentary evidence to prove that in villages surrounding mining sites at Talcher/Ib valley and other places and even at headquarters at Burla, the various community development expenditure relating to creation of assets have been made in compliance to any direction issued by Govt. of India/District Administration or any other Competent authority. The ld CIT(A) following the decision of this Bench of the Tribunal in assessee's own case for the assessment years 2005-06 to 2007-08 in ITA Nos.50,51,52 & 53/CTK/2011 has deleted the addition. Ld D.R. could not show any error in the order of the CIT(A). Hence, this ground of appeal for the assessment year 2010-11 and 2011- 12 is dismissed. 85. The next issue is against deletion of Rs. 86.34 lakhs towards compensation of land for the assessment year 2010-2011. 86. Having heard the rival submissions, we find that the assessee has debited compensation for land of Rs. 86.34 lakhs under the head "social facilities expenses". The Assessing Officer disallowed the amount paid towards compensation paid to land owners stating that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years 2010-11 and 2011-12, respectively. 90. The Assessing Officer has disallowed Rs. 400.03 lakhs as against claim of the assessee of Rs. 451.95 lakhs on the ground that supporting details were not furnished by the assessee in respect of expenditure incurred towards social facilities, which was deleted in first appeal. 91. We have considered the rival submissions. The CIT(A) has deleted the addition made by the Assessing Officer that in order sheet, it has been mentioned that the required details have been furnished by the assessee before the Assessing officer. Hence, it cannot be said that the details as called for have not been furnished. We also find that the in subsequent years identical claim of the assessee has been allowed by the revenue. Hence, we do not find any reason to interfere with the order of the CIT(A), which is hereby confirmed and ground of appeal of the revenue is dismissed for the assessment year 2010-11 and 2011-12. 92. The next issue relates to loss on sale of discarded assets of Rs. 33.11 lakhs for the assessment year 2010-2011. 93. After hearing the rival submissions and perusing the orders of lower authorities, we find that the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent locations in India. They are providing various services as per Memorandum of undertaking entered with MCL. The CIT(A) segregated the services by CMPDIL in the impugned order and deleted the addition made by the Assessing Officer stating that the assessee has furnished the required details as called for, which is evident from order sheet entry. Hence, the revenue is in appeal before us for all the assessment years under consideration. 98. After hearing the rival submissions and perusing the orders of lower authorities, we find that the expenditure is incurred towards services rendered by CMPDIL as per MOU between the assessee and CMPDIL. We also find that similar addition was made in the case of Northern Coalfields Limited and the Jabalpur Bench of this Tribunal vide order dated 5.5.2015 in ITA No.18/Jab/2014 and ITA No.55/Jab/2014 for the assessment year 2010-11 has deleted the addition by observing as under: "46. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 47. We have noted that these expenses have been treated as capital expenses by the Assessing Officer only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own case for the assessment year 2008-09, in favour of the assessee by a coordinate bench of this Tribunal. Such deviations from accepted past history of the case, as canvassed before us by the revenue authorities, are made only in exceptional situation and no such case has been successfully made out before us. In view of these discussions, as also bearing in mind entirety of the case, we deem it fit and proper to direct the AO to delete this disallowance of Rs. 1973.98 lakhs as well. The assessee gets the relief accordingly." 99. Respectfully following the judicial precedence and decision of the Co-ordinate Bench of this Tribunal, we uphold the findings of the CIT(A) in deleting the addition made for all the assessment years under consideration. Thus, this ground of appeal is dismissed. 100. The next issue raised by the revenue is against deletion of Rs. 1487.46 lakhs towards cost of exploration and development expenditure. 101. We have heard the rival submission, perused the orders of lower authorities and materials available on record. The assessee has claimed separately in the computation of income of Rs. 1487.46 lakhs towards the cost of exploration and other development e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42 & 43 of 2002 and also the decision of this Bench of the Tribunal in the case of Patnaik Minerals Pvt Ltd. (supra) has deleted the addition made by the Assessing Officer. 105. We heard the rival submissions, perused the orders of lower authorities and materials available on record. The dispute arise in this ground of appeal is whether the expenditure incurred on removal of overburden in coal is allowable expenditure or not. We find that similar issue arose in the case of Northern Coalfield ltd, wherein, on similar facts, the Jabalpur Bench of the Tribunal after a thorough and detailed discussion on the issue, has deleted the addition. The relevant portion is reproduced hereunder: "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 development 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 criterion all along. It is a purely a factual matter which permeates thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1978-79 to 1984-85 by the Assessing Officer was deleted by the CIT(A) and on further appeal, the Nagpur Bench of this Tribunal has upheld the findings of the CIT(A). Before us, ld D.R. could not place any contrary judgment of the higher forum to controvert the above decisions of the Tribunal and also High Court. The CIT(A) has followed the decision of the Tribunal while deleting the addition made by the Assessing Officer. Hence, we do not find any reason to interfere with the order of the CIT(A), which is hereby confirmed and this ground of appeal of revenue is dismissed for the assessment years 2010-11 to 2014-15. 106. The next issue relates to deletion of Rs. 3371.57 lakhs and Rs. 6481.34 lakhs towards admissibility of additional depreciation for the assessment years 2010-11 and 2011-12, respectively. 107. The Assessing Officer has disallowed the claim of additional depreciation on the ground that the assessee is not engaged in the business of manufacturing or production of any article or thing. On appeal, the CIT(A) deleted the addition made by the Assessing Officer by following the various judicial decisions including the Hon'ble Supreme Court in the case of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for various employees benefit schemes and remuneration on the basis of actuarial valuation, which is not contingent in nature and, therefore, disallowed Rs. 2321.00 lakhs. 111. On appeal before the CIT(A), it was submitted that the liability towards performance related pay and superannuation benefits has accrued and crystallised during the year under consideration, which is evident from the Office Memorandum dated 2/7.5.2009 issued by Coal India Limited, the holding company of the assessee. Based on the said Office Memorandum and also relying on judicial decisions, the CIT(A) deleted the addition. It was informed during the course of hearing that no such addition has been made in the subsequent assessment years against the claim of the assessee. Therefore, we see no reason to interfere with the order of the CIT(A) and dismiss this ground of appeal of the revenue for the assessment year 2010-11 and 2011-12, respectively. 112. The next issue relates to deletion of Rs. 1694.10 lakhs made on account of provisions. 113. The Assessing Officer found that in the computation of return of income, the assessee has added provision of Rs. 401.33 lakhs to the returned figure. The Assessee cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in the appeals filed by the revenue. The relation portion of findings of the Tribunal is as under: "13. The learned AR of the assesses reiterated the submissions as were made before the learned CIT(A) and submitted that the assessee Company has contributed the aforesaid amount under the head "Contribution to Rehabilitation Fund" under the direction of Govt, of India, Ministry of Coal conveyed to CIL as additional levy from all the subsidiaries except ECL and BCCL since these two companies are already sick and additional burden of levy may cause disharmony. On receipt of the said letter by CIL, the Board of Directors of CIL decided and instructed all its subsidiaries to pay @ ?6 per Ton of dispatch of coal to CIL. These facts could not be negated by the Revenue before us. Whenever the assessee is able to establish that the assessee Company has incurred the expenditure on the directions/instructions of the Central/State Government and other Govt, organisation which are having direct control over the business of the assessee Company then the same are allowable as deductions as business expenditure u/s.37(l) of the incometax Act,1961. This was so held by the ITAT, Cuttack Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40 lakhs towards training expenses for the assessment year 2010-11. 119. The Assessing Officer observed that although in the books of account, a sum of Rs. 630.50 lakhs towards training expenses includes a sum of Rs. 520.40 lakhs levied by the Coal India Limited @ 50 paise per ton of coal dispatched, in reality such levy at fixed rate is not directly related to any training expenses incurred. Therefore, he made the addition. 120. The CIT(A) deleted the addition by observing as under: "I have gone through the related documents in respect of training expenses incurred by the appellant company under the broad head "social facilities expenses". The expenditure in question is levied by Coal India Ltd., the holding company on coal produced on account of payment to the Indian In statute of Coal Management, Ranchi. This act has been disclosed at para No.14.2 to Notes on accounts (Schedule-F) of the Annual Report & Accounts of the appellant company. Similar expenditure i.e. apex office expenditure was disallowed by the AO in the earlier years i.e. AY 2005-06, 2006-07 & 2007-08. On appeal, the above disallowance was deleted by the CIT(A). On second appeal by the Department, the ITAT, Cut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the existing assets beyond their original estimated economic life could not be a ground to return a finding that it was not a case of repairs. We find that ld D.R. could not point out any specific error in the order of the CIT(A) or place any positive material on record that the amount spent on repair of railway tracks are not allowable expenditure. In view of above, we uphold the findings of the CIT(A) and dismiss this ground of appeal of the revenue. 126. The next issue relates to deletion of disallowance u/s.14A of the Act of Rs. 189.74 lakhs and Rs. 516.59 lakhs towards for the assessment year 2012-13 and 2013-14, respectively. 127. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the assessee had received tax free income of Rs. 18.32 crores from interest on 8.5% tax free bonds, interest on IRFC bonds and dividend from mutual fund. The Assessing officer observed that the value of assets which yielded the above income was Rs. 478.53 crores as on 31.3.2012 and the expenditure towards finance cost claimed by the assessee was Rs. 5.38 crores and hence, the Assessing Officer resorted to Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer authorities and materials available on record. The Assessing Officer has disallowed the claim of the assessee the above provision should not be allowed as business expenditure. The CIT(A) observed that the assessee has created the provision for mines closure plan as per the guidelines of the Ministry of Coal, Government of India, which states that the assessee is to prepare the plan and divide the expenditure among useful life of the mines by creating provision for such in each year. Further, the guidelines required the company financial assurance by opening an Escrow account with the Coal Controller Organisation as exclusive beneficiary. Therefore, the assessee company has made a fresh provision for expenditure towards mines closure plan and has reversed the earlier provision booked under the head reclamation of land. Hence, in view of the guidelines, the assessee has deposited in the Escrow Account the provision. We find no good reason could be given by ld D.R. pointing out the requirement to interfere with the order of the CIT(A), which is in the spirt of guidelines issued by Ministry of Coal, Government of India. We, therefore, do not find any merit in this ground of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing company. The CIT(A) found that similar disallowance was deleted by the CIT(A) in earlier years and the same was confirmed by the ITAT. Therefore, the CIT(A) deleted the addition made by the Assessing Officer. 136. We after hearing the rival submissions, find no infirmity in the order of the CIT(A) who has followed the decision of the Tribunal order dated 12.9.2011 for the assessment years 2004-05 to 2007-08 in assessee's own case, wherein, it has been held as under: " 41. The amount in question is claimed by the assessee- Company to have been paid to Coat India Ltd., (CIL) @ Rs. 5 per ton of coal produced towards rendering various services like procurement, foreign contract, marketing & corporate services based n agreement entered with them. The Assessing Officer observed that this payment to Coal India Limited has been worked out on the basis of Rs. 5 per ton of coal produced and not for any expenses incurred or services rendered on actual basis by the CIL. Accordingly, he was of the view that this payment is basically on presumptive basis and cannot be said that the whole amount is spent for wholly and exclusively for business purpose. Thereafter, he examined the debit mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er disallowed grants to school and institution of Rs. 1674.00 lakhs, Rs. 1868.00 lakhs and Rs. 2818.00 lakhs for the assessment years 2012-13, 2013-14 and 2014-15, respectively being not satisfied how such expenditure is related to business of the assessee. On appeal, the CIT(A) deleted the disallowance on the ground that since the mines are located in remote areas where no civil facilities are facilities and in order to retain the employees at those areas, the assessee was required to provide for schools and other institutions. Therefore, the expenditure is relatable to welfare of the employees of the company. 139. Before us, ld A.R. submitted that similar disallowance made by the revenue in the case of Northern Coalfields Ltd., was deleted by the ITAT, Jabalpur vide order dated 21.10.2013. Ld D.R. could not point out any specific reasons to deviate from the findings of the CIT(A). Hence, we dismiss this ground of appeal of revenue the assessment years 2012- 13, 2013-14 and 2014-15, respectively. 140. The next issue relates to deletion of disallowance of Rs. 7347.88 lakhs towards Central Excise duty. 141. We have heard the rival submissions, perused the orders of lower authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble apex court in the case of Sarvana Spg. Mills Pvt Ltd., 293 ITR 201(SC) and Hon'ble P&H High Court in the case of Vishal Paper Industries, 351 ITR 578(P&H). No contrary decision was placed on record by the revenue. Hence, we uphold the findings of the CIT(A) and dismiss this ground of appeal of the revenue. 148. The next issue relates to deletion of addition towards per tax of Rs. 168.54 lakhs for the assessment year 2011-12. 149. Having heard both the sides, we find that the amount towards Perk Tax is not claimed as an expenditure, rather it is reflected in balance sheet under the broad head "loans & advance". Since there was no claim by the assessee, there is no reason to disallow the same by the Assessing officer. The CIT(A) has rightly deleted the addition made by the Assessing Officer. Hence, this ground of revenue for the assessment year 2011-12 is dismissed. 150. The next which requires our adjudication in revenue's appeal for the assessment year 2014-15 relates to deletion of addition of Rs. 4594.00 lakhs towards difference in opening stock of coal. 151. The Assessing Officer made an addition of Rs. 4594 lakhs being the difference in valuation of closing stock as on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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