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TMI Blog2020 (9) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred from such activity is also revenue in nature. As per policy of DGCA, certain internal spare parts of Aircraft are to be replaced. The exchange loss which arose on account of purchase of spare parts was capitalized and exchange loss arose on account of undertaking regular maintenance hence it is a revenue expenses. - Decided in favour of assessee. Disallowance of depreciation - AO was of the view that the assessee has not followed extraction of Iron Ore during the relevant year and had no activity of mining during the relevant year and was engaged only lifting of closing stock during the year - HELD THAT:- Mining company was a running company. It had stopped production for the time being in order to cater to the decision of the Hon ble Supreme Court. Importantly, when an asset is procured, it goes into the block of assets. The only aspect is the use. If an asset goes into the block of assets, the same goes into depreciation. There is no doubt that the assessee was also the owner of the machinery. The decision of the Calcutta High Court in CIT vs. Norplex Oak India [2011 (3) TMI 620 - CALCUTTA HIGH COURT] clearly decides the case in favour of the assessee. Dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 1875/Kol/2019, for A.Y. 2016- 17,wherein the grounds of appeal raised by the revenue are as follows: 1. The ld. CIT(A) has erred in law and in facts in deleting the addition of ₹ 2,63,708/- made by the Assessing Officer on account of periphery development expenses where assessee has failed to furnish any evidences to establish that the above expenses are related to business expenses as per the mining provisions as the assessee had made those expenses directly without contributing the same in periphery development fund under the aegis of the periphery development society and periphery development committee. 2. The ld. CIT(A) has erred in law in deleting the addition of ₹ 1,84,620/- made by the Assessing Officer on account of the Exchange Rate Fluctuation. As per the details submission filed by the assessee, the assessee had not exported any raw materials to overseas country in which the exchange loss had accrued. 3. The ld. CIT(A) has erred in law in deleting the addition of ₹ 2,54,61,464/- made by the Assessing Officer on account of depreciation where the assessee had no activity of mining during the relevant year and was engaged only in li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns made by the ld. A.R. of the assessee. There is no doubt that CSR activities are business expenditure. However, expenses against malaria eradication, distribution of mosquito nets, etc. do not appear to be the expenditure in the case in hand as claimed by assessee. As noted by the ld. A.O., they are towards the Orissa Flood Relief and building of temple, road, etc. This expenditure is also part of the ledger account of the assessee. It is done in consultation with State Government authorities. The ld. A.R. has submitted details of vouchers incurred towards Peripheral Development Expenses. The Id. A.O. has not doubted any of the vouchers or memos. He is only doubting the expenditure on account of the provisions of Income-tax Act, 1961. He has stated that expenditure above 5% is not permitted. 8. I am afraid the stand of the A.O. cannot be accepted. The Periphery Development Expenses, if incurred have to be taken as a business expenditure. The maximum that was to be explained as per the Id. A.O. was 5%. He has sort of accused the assessee for spending more that 5%. This stand of the Id. A.O. cannot be accepted in as much as how much the assessee spends legitimately is the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings the assessing officer noticed that the assessee had claimed an amount of ₹ 1,84,620/- under the head of Exchange Rate Fluctuation . The AO was of the view that the assessee company had not exported any raw materials to overseas country in which the exchange loss had accrued. The Id. A.O. also distinguished the decision of CIT vs. Woodward Governor India (P) Ltd. 312 ITR 0254 (SC), and made addition of ₹ 1,84,620/-. 12. Aggrieved by the order of the Assessing Officer the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer observing the following: 17. I have gone through the order of the Id. A.O. and the submissions made by the assessee. There is no doubt there was an exchange rate fluctuation on purchase of parts of Aircraft. The said spareparts were changed as per the rules of DGCA. This is a mandatory requirement. Thus, once the mandatory loss are being pursued, for a capacity which is as per the regulations, the said loss does not lead to trading activities. In my view, the Id. A.O. has erred in distinguishing with the case of Woodward Governor India (P) Ltd. Once an asset is purchased, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer made an addition of ₹ 2,54,61,464/-. 18. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer observing the following: 13. I have gone through the order of the Id. A.O. and the submissions made by the assessee. The issue here is that the mining company was a running company. It had stopped production for the time being in order to cater to the decision of the Hon ble Supreme Court. Importantly, when an asset is procured, it goes into the block of assets. The only aspect is the use. If an asset goes into the block of assets, the same goes into depreciation. There is no doubt that the assessee was also the owner of the machinery. The decision of the Calcutta High Court in CIT vs. Norplex Oak India reported in 198 Taxman 0470 clearly decides the case in favour of the assessee. In Para Nos. 11 to 17, the issue has been dealt at length and in favour of the assessee. In the light of the above discussion, the assessee succeeds in ground of appeal No.7 19. Aggrieved by the order of the ld. CIT(A) the revenue is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA No. 11/Kolkata./2013 when it has been stated in Para 3, 4 and 5 as under:- 3. At the time of hearing, it was submitted by the Id. A.R. that in Ground No.1 the assessee has challenged the action of the Id. CIT(Appeals) in confirming the disallowance of the employees contribution to the Provident Fund which was paid within the prescribed due date. It was the submission that the employees contribution to Provident Fund was paid on 14.02.2008 for which he showed the copy of the challans at page 23 of the paper book. It was the submission that the assessment year was 2008- 09. It was the submission that in view of the decision of the Hon ble Jurisdictional High Court in the case of CIT -vs.- Vijay Shree Limited reported in 224 Taxman 12 (Cal.) the disallowance was liable to be deleted. 4. In reply, the Id. D.R. vehemently supported the order of the Assessing Officer and ld. CIT(Appeals). 5. We have considered the rival submissions. As it is noticed that the employees contribution to the Provident Fund has been paid before the due date of filing of the return as also before 31st March, 2008, in view of the decision of the Hon ble Jurisdictional High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s engaged in the business of mining of iron ore. The Assessing Officer observed that in written submission shortage to the extent of ₹ 7863 MT of iron ore, has been shown which is also shown in the audited accounts, thereforeassessing officer added a sum of ₹ 3,14,52,000/- at the market apparent price and on the basis of iron ore. 30. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer observing the following: 8. I have gone through the order of the ld. Assessing Officer and the assessee. There is no doubt that the Balance Sheet and H1 analysis have been prepared on two different states and period. Thus, taking them as the difference would be an error. I have checked the two analysis and the Books of Accounts carefully u/s 250(4) of the Income Tax Act, 1961. I have found no difference. As such, assessee succeeds in Ground of Appeal no. 3. 31. Aggrieved by the order of the ld. CIT(A) the revenue is in appeal before us. 32. The ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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