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TMI Blog2018 (12) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... Once a claim is held to be legally allowed, there is thus no basis to restrict the quantum of such claim once other conditions for claiming such expenditure has been duly satisfied. Therefore, consistent with the position in the earlier year and following the decision of the Coordinate Bench referred supra, the whole of the expenditure of ₹ 60,00,000 incurred during the year is allowed as revenue expenditure u/s 37(1) - Decided in favour of assessee Addition towards contribution to PF and ESI - Held that:- The assessee company has deposited employee’s contribution to PF and ESI with delay of few days from the due dates, however the same were deposited before the due date of filing of the return of income U/s 139(1) which is evident from the order of the Assessing Officer. It was further submitted that the matter is squarely covered in favour of the assessee by the decisions in case of CIT vs. State Bank of Bikaner & Jaipur [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] and JAIPUR VIDYUT VITRAN NIGAM LTD AND RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD [2014 (1) TMI 1085 - RAJASTHAN HIGH COURT] - Decided in favour of assessee. - ITA No. 489/JP/2018, ITA No. 640/JP/2018 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESI beyond the prescribed time limit provided in the respective Act. (iii) Whether in the facts and circumstances of the case and in law the Ld. CIT(A) was justified in holding that the employees contribution to PF ESI are governed by the provisions of Section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961. 2. Regarding ground no. 1 of the assessee s appeal and the ground no. 1 of the Revenue s appeal, briefly the facts of the case are that the assessee company is engaged in mining, manufacturing and trading of minerals besides it derives income from mining contracts. The assessee company has mining area allotted by the Government of Rajasthan on lease for a period of 20 years. During the relevant previous year, the assessee company paid compensation for vacating the land, within the leased area, amounting to ₹ 60,00,000/-. In the books of accounts, the same was shown under the head mining rights forming part of the intangible assets and in the return of income depreciation amounting to ₹ 52,98,858/-, at the rate of 25% was claimed U/s 32 of the IT Act. During the course of assessment proceedings, the assessee alternativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as determined. However, after application of such percentage determined, assessed income, unknowingly, had become lower than the returned income whereas, the appellate authorities had never intended to give relief to the assessees, in such a manner, that their assessed income could go below the returned income. Neither, any such claim, at any point of time, was made by the assessee, before the AO or the appellate authorities. However, in the present case, a fresh claim, was made by the assessee company, allowable under section 37(1), before both the lower authorities, which was even accepted by the ld. CIT(A). 5.1 It was further submitted that in the case of New Mitherwal Construction Co. (Supra), the ITAT Jodhpur Bench adjudicated the issue under Miscellaneous Application filed u/s 254(2) by the Department. In this case, Net Profit % was estimated by the ITAT which resulted into the assessed income being lower than the returned income which was subsequently rectified by ITAT. It is a trite law that the powers of the ITAT are different from the powers, as assigned under the statute, to the AO, and CIT(A). The ITAT has to pass orders thereon as it thinks fit. Thus, the ITAT, ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1] 187 ITR 688 [SC], wherein the claim of the assessee of additional deduction in respect of its liability of purchase tax made during the hearing of appeal was held to be lawful and admissible. 5.4 Further, reliance was placed on the judgment of the Hon ble Supreme Court in the case of National Thermal Power Company Limited [1998] 229 ITR 383 (SC). In this case, assessee had deposited its funds not immediately required by it on short term deposits with banks. The interest received on such deposit was offered by the assessee company itself for tax and the assessment was completed on that basis. This, inclusion of the interest income was not challenged by the CIT(A), however, before the ITAT the company contended that such interest income was not includible in the total income. The Hon ble Supreme Court held such a claim made for the first time before ITAT allowable. 5.5 Needless to mention that in both the above situations, the decisions of the Hon ble Supreme Court resulted into the assessed income being lower than the returned income. Reliance is also placed on the judgment of the Hon ble Bombay High Court in the case of Pruthvi Brokers Shareholders [2012] 252 CTR 151 (Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at an amount lower than returned income by allowing all the deductions to which the assessee is lawfully entitled. 6. The ld. DR is heard who has relied on the order of the lower authorities. 7. We have heard the rival contentions and perused the material available on record. Firstly, on merits, undisputedly, there are no changes in the facts and circumstances of the case as compared to previous AY 2013-14 and the alternate claim of assessee U/s 37(1) made during the course of assessment proceedings is fairly covered by the decision of the Coordinate Bench in assessee s own case in AY 2013-14 (ITA No. 572/JP/17 dated 1.9.2017) wherein the Coordinate Bench has held as under:- 24. As held by the Hon ble Supreme Court, in considering the cases of mining business as in the instant case, the nature of the lease, the purpose for which expenditure is made, its relation to the carrying on of the business in a profitable manner should be considered. Where the assessee has an existing right to carry on a business, any expenditure made by it during the course of business for the purpose of removal of any restriction or obstruction or disability would be on revenue account, provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in his possession, a piece of land (Khasra No. 53, Araji No. 157, Rakba 3 bigha 8 biswa), as this piece of land was part of the total area allotted by the government to the appellant for mining the soap stone. The appellant had in the past also made such payments to other persons for getting possession of the land in order to do the mining in the area. The said finding of the ld CIT(A) remain uncontroverted before us. Given that the piece of land falls within the mining area in respect of which assessee has an existing right to carry on its mining operations and the fact that assessee wishes to carry on the mining area in that area, the assessee was required to pay compensation to the land owner so that the latter doesn t obstruct or challenge the carrying of the mining activity underneath the surface of land which belongs to him. The payment is for the purposes of removing the disability or obstruction and to facilitate the carrying on its business. No fresh rights have been acquired by the assessee by virtue of paying the said compensation. The assessee was already having a right to carry on the mining operations. The fact that land stand mutated in the name of the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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