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TMI Blog2017 (7) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... l facts and circumstances of the case, we are of the view that the deduction claimed had to be allowed - Decided in favour of the assessee. Addition of environment expenses - HELD THAT:- As decided in own case AY 2003-04 to 2005-06 payment relates to afforestation/tree plantation Land reclamation and Payment of statutory duty for environment clearance like Water cess consent fees to Pollution Control Board etc. As rightly contended by the learned AR such payments cannot be disputed on the ground that there was want of proper vouchers. But for payment of these statutory dues the Assessee could not have carried on its business. In the given circumstances of the case, we are of the view that the deduction in question ought to be allowed. We direct the same to be allowed as deduction. Addition on account of hire charges of bus and ambulance - 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the relevant assessment year before 10% disinvestment of paid up equity capital as per Press Release dated 15.06.2010. In view of prescribed provisions, no tax was required to be deducted at source by the assessee and, therefore, disallowance u/s. 40(a)(ia) of the Act was not warranted and, therefore, action of the Ld. CIT(A) is upheld and this ground of appeal of revenue is dismissed. CIT(A) not admitting and adjudicating the additional grounds - claim of the assessee for deduction - mistake has taken place at the stage of filing of return of income - HELD THAT:- In S. R. Koshti Vs. CIT [ 2004 (12) TMI 62 - GUJARAT HIGH COURT] held, inter alia, that authorities under the Act are under an obligation to act in accordance with law - tax can be collected only as provided under the Act and that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. In the light of the aforesaid decisions of the Constitutional courts, we are inclined to admit the additional ground raised before us and remit the matter back to the fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N Driveshaft (India) Ltd. Vs. ITO Ors. (2003) 259 ITR 19 (SC). The Ld. CIT(A), therefore, has held that the reopening is bad in law since the procedure as mandated by the Hon ble Supreme Court that assessee s objection in respect to reopening has to be disposed of by speaking order has not been followed and, therefore, the Ld. CIT(A) allowed the appeal of assessee. We note that in the grounds raised before us, which has been reproduced (supra) the department has not challenged the aforesaid decision of the Ld. CIT(A), therefore, the revenue does not have any grievance of the action of the Ld. CIT(A) in allowing the appeal on the legal issue. Therefore, in any way the action of the Ld. CIT(A) in allowing the appeal is not under challenge before us. So, the grounds raised by the revenue in any way is academic, therefore, we are not inclined to adjudicate the grounds above so, the appeal of revenue is dismissed. 4. Coming to ITA No. 1637/Kol/2014 (Revenue s appeal) and ITA No. 1654/Kol/2014 (Assessee s appeal). Both revenue and assessee have filed cross appeal against the order of Ld. CIT(A). First, we will take up the revenue s appeal. Ground no.1 of revenue assails the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o respectfully following the decision of the Coordinate Bench of the Tribunal, supra, we uphold the order of the Ld. CIT(A) and dismiss this ground of appeal raised by the revenue. 7. Ground no. 2 of the revenue is against the action of the Ld. CIT(A) in deleting the addition of ₹ 78,38,000/- made by the AO on account of environment expenses. At the outset itself, the Ld. AR brought to our notice that this issue also has been covered by the decision of the Coordinate Bench in AY 2003-04 to 2005-06 in assessee s own case, supra, wherein the Tribunal has discussed this issue at para 17 para 25. We note that similar issue has been adjudicated by the Coordinate Bench at para 24 and the Tribunal has allowed the claim of the assessee vide para 27 by holding as under: 27. We have considered the rival submissions. We have perused the relevant evidence filed by the Assessee to substantiate claim of the Assessee. For AY 2003-04, these details are available at page 25 of the PB. The revenue does not dispute the fact that these expenses are incidental to the business and are revenue in nature. Similar evidence has been produced in respect of the other two AYs also. The only dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 12. Ground no. 4 is against the action of the Ld. CIT(A) deleting the addition of ₹ 87,88,03,000/- made by AO on account of Cess Equalisation Reserve under the head current liability . 13. At the outset itself, the Ld. AR brought to our notice that this issue is also examined in AY 2003-04 to 2005-06 in assessee s own case, supra, wherein this issue has been discussed at page 25 para 37. The AO has treated the amount shown as advance and deposit from customers as fictitious and made the addition. This issue has been adjudicated by the Tribunal at page 32 para 42 wherein the issue was allowed in favour of the assessee and the Tribunal vide para 42 has held as under: 42. From the rival contentions it can be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report in question. In perusing the judgment we find that the facts are absolutely identical and the Nagpur Bench by a detailed discussion on facts as also the case law, allowed the entire claim, observing in the process, at page 66, as under :- As a matter of fact, the impugned expenditure on account of contribution to various schools was not incurred by the assessee-company voluntarily but the same was incurred to discharge its obligation in terms of a national Coal Wage Agreement entered with the employees and as the said agreement was enforceable in law under the Indian Contract Act as well as the Industrial Disputes Act, the assessee-company was under a statutory obligation to incur the said expenditure. As such, considering all the facts of the case and keeping in view the aforesaid decisions including the decision of this Bench in the assessee's own case, we hold that the expenditure incurred by the assessee- company on account of grants made to various schools was an admissible business expenditure and the learned Commissioner of Income-tax (Appeals) was not justified in confirming the disallowance made, by the Assessing Officer on this count, His impugned order on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. u/s. 40(a)(ia) of the Act of ₹ 2,32,21,000/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to allow the same by holding as under: 7.1. Ld. A.0. has not discussed the issue in the assessment order but made the addition while computing the taxable income. The appellant submits that no explanation was called by the A. O. before resorting to disallowance of such interest. As per provisions contained in section 194A(3)(iii)(f) read with Notification No. S03489( dated: 22.10.1970), a company is not required to deduct tax at source from payment of interest to another company in which all the shares are held (whether singly or taken together) by Government or the Reserve Bank of India or a corporation owned by that Bank. All shares in Coal India Limited are held by Government of India at the relevant time before 10% disinvestment of paid up equity capital as per Press Release dated: 15. 06. 2010. In view of, prescribed provisions, no tax was required to be deducted at source by the assessee and therefore section 40(a)(ia) of The Income Tax Act, 1961 cannot be invoked for disallowance of interest paid to Coal India Limited in which 100% sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al) ought to have reduced the assessed income by ₹ 2,88,74,000/- as Ld. A.O., while computing the income in the assessment order, has wrongly taken the Net Profit as per P L Account at ₹ 340,53,32,000/- instead of correct figure of ₹ 337,64,58,000/-, resulting in enhancement of profit by ₹ 288,74,000/-, by not considering expenses crystallized during the relevant previous year though related to earlier year booked as prior period adjustment. 4. For that, without prejudice to the above and in view of facts and circumstances of the case, the Ld. A.O. erred on facts as well as in law in not appreciating the well settled legal issue that a person shall be assessed on real income by not taking an benefit of the mistake, ignorance and/or inadvertence of the assessee, considering the fact that assessment is being completed u/s 143(3) of the I.T. Act, 1961 after scrutiny of all the materials on the record and/or calling further information as the assessing officer may deem fit and proper. 20. We note that the assessee had raised this additional ground before the Ld. CIT(A). However, the Ld. CIT(A) was of the view that the issues concerned do not stem from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. 22. From the aforesaid observation itself, it is clear that the decision in Goetz India Ltd., supra by the Hon ble Supreme Court does not impinge on the power of the appellate authorities. Moreover, in S. R. Koshti Vs. CIT (2005) 276 ITR 165 (Guj), the Hon ble Gujarat High Court has held, inter alia, that authorities under the Act are under an obligation to act in accordance with law. The Hon ble High Court observes that tax can be collected only as provided under the Act and that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. In the light of the aforesaid decisions of the Constitutional courts, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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