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TMI Blog2019 (7) TMI 1853X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 2012-13 on 29.09.2012 declaring loss of (-) Rs. 11,17,87,318/-. The return of income was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was taken up for scrutiny for this Assessment Year. The assessment was concluded under section 143(3) of the Act vide order dated 25.03.2015, wherein the assessee's loss was determined at Rs. (-) 10,54,76,673/- in view of the following additions/disallowances:- (i) Under Section 14A r.w.r. 8D - Rs. 38,04,113/- (ii) Interest from GESCOM - Rs. 6,532/- (iii) Disallowance of contribution to FIMI - Rs. 25,00,000/- The assessee's appeal was dismissed by the CIT(A), Gulbarga vide order dated 30.08.2018. 3.1. Aggrieved by the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITAT - Delhi Bench in the case of Rio Tinto India Pvt. Ltd., Vs. ACIT in ITA No. 363/Del/2012 dated 22.06.2012; wherein on the similar issue of contribution to FIMI by that assessee, the said expenditure was held to be allowable revenue expenditure. 3.3. Per contra, the learned DR for Revenue supported the orders of the authorities below. 3.4.1. We have considered the rival contentions/submissions and the material on record; including the judicial pronouncement cited. The facts of the matter, as emerge from the record, are that in the year under consideration, the assessee made a contribution of Rs. 25,00,000/- to FIMI by way of cheque bearing No. 496968 dated 29.10.2011 and claimed it as a revenue expenditure. The authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of business. Inter alia, the AO relied upon decision in CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC) and distinguished the decision relied upon by the assessee in CIT Vs. Kamal and Co. 203 ITR 1038 (Raj.). 14. On appeal, the ld. CIT(A) upheld the disallowance, holding as under:- "6.1 I have carefully considered the assessment order and the submission made by the learned AR. The payments of '5.0 lacs is towards the building fund of FIMI i.e. Federation of Indian Mineral Industries. The payment cannot be said to be for the purpose of business and revenue in nature. The appellant's plea that the payment has been made to FIMI as it provides support to the mining industries and therefore should be allowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, Honble Apex Court in K.T.M.T.M. Abdul Kayoom v. CIT. 44 ITR 689 (SC) held that each case depends on its own facts and close similarity between one case and another is not enough. even a significant detail may alter the entire aspect. It was observed that what is decisive is the nature of business, the nature of the expenditure, the nature of the right acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases. In Sri Venkata Satyanarayana Rice Mill Contractors Co. v. CIT, 223 ITR 101 (SC), Honble Apex Court held that the correct test is that of commercial expediency. In Chemicals & Plastics India Ltd. (supra), Hon'ble Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector. Following this decision, Hon'ble Kerala High Court in Co-operative Sugars Ltd. (supra) held that the contribution made by the company at the suggestion of the State Minister concerned, for sharing of cost incurred for cement lining of an irrigation canal serving sugarcane cultivators was allowable as revenue expenditure under section 37(1) of the Act, as it went to the advantage of the company in the form of better supply of sugarcane. 17.1 In the instant case, the assessee, rendering services to mining Industry, contributed towards building fund of Federation of Indian Mineral Industries, of which the assessee is a member. Indisputably, the assessee is rendering services to the mining industry. The said federation has over ..... X X X X Extracts X X X X X X X X Extracts X X X X
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