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TMI Blog2022 (11) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... the guidelines of the Ministry of Coal. The issue of ascertaining the said provision is covered in favour of the assessee by the decision of the Hon ble Rajasthan High Court in case of Rajasthan state Mines and Mineral Ltd. [ 2019 (6) TMI 305 - RAJASTHAN HIGH COURT] as per the contentions of the Ld. AR. But the observation of the CIT(A) that the said Mining Closure Funds is not in the nature of tax, duty, cess, fee etc. as per Section 43B, appears to be justifiable as the guideline of Ministry of Coal has given the procedure and time period for the closure expenses to be incurred by the coal mine owners who are operating coal mines without the approval of any Mine Closure Plan. Thus, Section 43B claim is not applicable in assessee s cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, Your Appellant, most respectfully submits that the Ld.CIT(A) has erred in law and on facts by confirming the addition in respect of Mine Closure expense of Rs.6,56,43,460/- by treating the same as deposit not considering the same as actual payment of liability. 3. The assessee-company is engaged in the business of mining of minerals and generation of power. The return of income was filed on 26.09.2013 declaring total income of Rs. 878,87,82,502/-. Subsequently, revised return of income was filed by the assessee on 22.07.2014 declaring total income of Rs. 878,53,47,676/-. The case was selected for scrutiny. Further, the scrutiny assessment u/s 143(3) of the Act was completed on 17.03.2016 determining the total income of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 10.10.2018, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that as per the guidelines issued by Ministry of Coal, the assessee company is required to make provision towards Mine closure expenses on an annual basis. The assessee company used to make provision in this regard which is disallowed u/s 43B every year and as and when the actual expenditure is made, the same is claimed u/s 43B. The assessee has been consistently applying the provisions of Section 43B of the Income Tax Act on such payments. Even in Tax Audit report, the Tax Auditor of the company has been covering this expenses u/s 43B of the Income Tax Act, 1961. Even during the year under consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Guidelines issued by Ministry of Coal and same relates to the business of the assessee. 6. The Ld. DR submitted that the deposit of Rs. 6,56,63,460/- in Mining Closure Fund is not in the nature of tax, duty, cess etc. or any other sum payable as provided in Section 43B of the Act. The same rightly disallowed by the Assessing Officer and confirmed by the CIT(A). The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The Ld. DR further submitted that the assessee s claim that entire provision made should be allowed as deduction on accrual basis is also not proper as the provision is contingent in nature and assessee itself added the same in the total income for the same reason. Thus, the Ld. DR prayed that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Ld. AR is rejected. 8. As regard to alternate argument that even if the Tribunal is of the view that provision of Section 43B are not applicable to mine Closure Expense than the amount or provision of for mine closure of Rs. 49,60,39,000/- already disallowed by the assessee company u/s 43B of the Act in its computation of income during A.Y. 2013-14, should be allowed as expenses as the same has been made on accrual basis as per the Guidelines issued by Ministry of Coal and same relates to the business of the assessee appears to be correct. Since the assessee has to make provision for mine closure as the requirement of the Mine owners, the same should be allowed as expenses. Thus, appeal of the assessee is partly allowed. 9. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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