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TMI Blog1962 (11) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... lease from owners of land to whom royalties were being paid. It is further stated that the several collieries were being worked by the company and the coal raised therefrom was sold. In other words, this is a simple case of a company working a mine, raising and selling the coal. The assessment years are 1950-51, 1951-52, 1952-53 and 1953-54. For these years, the assessee incurred liabilities for payment of three classes of expenses (1) road and P. W. D. cess, (2) education cess and (3) payments made on account of royalty-holders as per royalty agreements. We need not deal with the views of the Income Tax Officer or the Appellate Assistant Commissioner, but may straightaway mention that the Appellate Tribunal held that so far as the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter are in force, all immovable property on which the road and public works cesses are assessed according to the provisions of the Cess Act, 1880,shall be liable to the payment of a primary education cess. (2) The primary education cess shall be levied at the rate of three and a half piece on each rupee of annual net profits from mines and quarries and at the rate of five piece on each rupee of annual value of land and of annual net profits from tramways, railways and other immovable property as determined under the Cess Act, 1880." Coming now to the Income Tax Act, section 10 deals with the headings under which tax is payable and the allowances that are to be made for computing the income on the various headings. Section 10(I) pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (2). It would come under clause (xv) unless it is excluded by the proviso. The proviso seems to be without complication and excludes allowances of any sum paid on account of any cess levied on the profits or gains of any business. I have already mentioned that the assessee in this case carries on a mining business which consists of raising coal from the mines and selling the same. I do not see how it can be argued that the profit which is gained by raising the coal and selling the same does not come within the provisions of the Cess Act or the Education Cess Act or is not within the ambit of sub-section (4) of section 10. Mr. Mitter appearing on behalf of the assessee has argued that there is a subtle distinction between the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included in the profit that was enjoyed by sale of what has been termed as the "end product". It is apparent, therefore, that the facts of these cases are quite dissimilar to the present one. In the present case the assessee company, upon their own showing, carried on the business of raising coal from mines and having raised the coal, they carried out no operation of manufacture of any product but simply sold the coal. In my opinion, there is no reason why the complications that arose in the other cases should be introduced herein. It may be that, where a mining company does not sell the coal raised but uses it in some other operation, the question may arise as to the computation of profit which can be said to have arisen out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not himself carrying on the mining operations and, therefore, was not liable for payment of cess. This was negatived. It was held that the cess was not merely to be charged from the occupier but also from the owner. In my opinion, it is not necessary to deal in this case with the particular question that arose in the case above mentioned, namely, as to whether the cess follows the land or the profit arising therefrom. It is quite clear to me that the cess under both the Acts has to be paid because the assessee company carried on mining operations and enjoyed profit. Such payments, however, are not allowable under section 10(2) because of the provisions of sub-section (4) of section 10. If it was a kind of cess that is contemplated under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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