9911796707
TMI Blog2023 (10) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... . [ 1992 (7) TMI 2 - SUPREME COURT ] as been held that capital expenditure would not become revenue expenditure simply by reasons of the fact that it was incurred in connection with business activities which ultimately resulted in efficiently carrying on the day to day business. Enduring nature does not necessarily mean that the benefit is derived for a very long period of time. Even if an asset has a life of five years, the expenditure incurred for acquiring the same, is a capital expenditure, even though the asset has to be replaced after five years and in that case, the period of five years is long enough to qualify as one bringing the asset of enduring benefit and in that case, it has to be treated as a capital expenditure and not as a revenue expenditure. Decided against assessee. Disallowance of Guest House Expenses - AO restricted the claim of the assessee company to 50% of the total expenditure - CIT(A) reduced and restricted the addition made by the AO to Rs. 1.21 lakhs on account of failure to establish the expenditure fully to the extent claimed in the profit and loss account - HELD THAT:- No reason to interfere with the findings recorded by the ld. CIT(A). Thus, this gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in the area which was benefitted by the provision of such basic amenities mainly comprised of the workers of the assessee-company and their families. He also appears to have overlooked the fact that such basic amenities could not have been provided to the assessee's employees in isolation as the said expenditure in any case had to be incurred for the entire area as a whole. Before us, assessee has contended that over 90 per cent of the population residing in that area constituted assessee's own workers and their families and it appears from the record that this fact has not been disputed by the Revenue at any stage. Moreover, in the absence of such facilities in that area, it would not have been possible for the assessee- company to get the proper work force for its operation without which it was not possible to carry on its business effectively and efficiently. The labour by itself is an important input for any type of business, more particularly for the business of the assessee-company of mining operation and, therefore, the expenditure incurred mainly for the welfare of the labour force has to be treated as incurred wholly and exclusively for the purpose of it's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of expenses on trees plantation and others. Disallowance of claim for OBR adjustment - HELD THAT:- As in assessee s own case in [ 2019 (12) TMI 203 - ITAT RAIPUR ] wherein Tribunal following the decision of the Jabalpur Bench of the Tribunal in the case of Northern Coalfields Ltd. [ 2015 (6) TMI 36 - ITAT JABALPUR ] has dismissed this ground of revenue as held there is nothing on record to establish, or even suggest, that expenses incurred on removal of overburden at the surface level, which were capital expenditure in nature, have been claimed as revenue deduction on the strength of coal mining in another piece of land within that coal mine. Disallowance of expenditure on actuarial valuation of employee compensation - assessee has created the provision towards fatal accident under the actuarial valuation done by Coal India Limited, i.e., the parent entity of the assessee - HELD THAT:- The analogy articulated by Hon ble Apex Court in the case of M/s. Excide Industries Ltd. [ 2020 (4) TMI 792 - SUPREME COURT ] would be the most appropriate ratio of law that has to be adopted wherein has held that concededly, it is a provision to attach conditionality on deductions otherwise allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the license fee is in the nature of rental income earned by the assessee and therefore, the same should be charged for tax under the head income from house property . See Universal Plast Limited [ 1999 (3) TMI 15 - SUPREME COURT ] Accordingly, the decision of the Ld. CIT(A) with respect to disallowance of depreciation on Apollo Hospital building is justified and thus, needs no interference. Disallowance of expenditure on account of land revenue - HELD THAT:- From facts coming out from the orders of the revenue authorities, it is not clear whether the expenditure booked under the head miscellaneous expenditure was for acquisition of land or towards compensation in lieu of employment. This aspect needs to be examined. Therefore, in the interest of natural justice, the issue demands and justifies being restored back to the file of the A.O to verify the nature of expenditure incurred in terms of our observations and readjudicate the same accordingly. Disallowance of prior period expenses - HELD THAT:- Considering facts to allow any expenditure which pertains to a year earlier to the relevant assessment year, in that case in order to compute the true profit and gains of the year so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the reliability of expenses incurred under the head CSR was also doubtful. With all such observations, the claim of the assessee was not allowed by the A.O. On perusal of appellate order, it is not discernible as to whether ld. CIT(A) has verified the required documents, which were sought by the AO during the course of assessment proceedings, which was the main cause for the disallowance. Therefore, we cannot take the finding of Ld CIT(A) on proper examination and appreciation of the facts, thus are unable to endorse the view taken by the ld. CIT(A) on the basis of theoretical submissions of the assessee in deleting the disallowance made by the AO without addressing the issues raised by A.O while making the addition under the head in doubt - restore this issue to the file of AO for verification and examination - ground of the revenue is allowed for statistical purposes. Reopening u/s. 147 - assessment was done on account of audit objection - whether the additional depreciation u/s. 32(1)(iia) is allowable on caterpillers and 240 Dumpers treating them as machineries ? - HELD THAT:- In the present case, the reopening u/s. 147 was initiated after recording reasons u/s. 148(2) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on grant of TDS credit due to income mismatch - HELD THAT:- It is clear from the assessment order as well as the appellate order that the assessee had claimed the credit of TDS without offering the corresponding income to the income tax and, therefore, both the authorities have rightly denied the TDS credit by virtue of provision of section 199 of the Act read with rule 37BA of the IT Rules, 1962. Ld. AR of the assessee also could not brought to our notice any cogent evidence to substantiate its claim that the corresponding income has been offered to tax. In view of the above, we uphold the findings accorded by both authorities below, in this regard. However, we direct the AO to grant TDS credit in the year in which corresponding income is declared by the assessee. Thus, this issue is partly allowed for statistical purposes. Reversal of interest disputed deposits w.r.t. MPGATSVA/Terminal Tax - HELD THAT:- The issues pertaining to interest on disputed deposits on behalf of third parties which are considered as liability by the assessee company, since the same belongs to deposits of third parties under trust. Accordingly, the assessment of such income should be completed treating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puter software. This issue is partly allowed for statistical purposes. Disallowance of land crop compensation - HELD THAT:- We send this issue back to the file of the A.O to verify the nature of the expenditure incurred, if the same is in lieu of employment which helps the assessee company to avoid recurring revenue expenditure in the nature of salary and other administrative legal hassles, then the same would be considered as revenue in nature and should be treated as an allowable expenditure. Write off/depreciation of railway siding leased out to Aryan Coal Beneficiation (ACB) - HELD THAT:- AO has rightly relied on the Section 27(iiib) r.w.s. 269UA - assessee is not eligible to claim depreciation as the asset of the assessee has already been given on lease and currently not in possession of the assessee - AR by way of submission or arguments was also unable to substantiate that how the case laws relied upon are applicable on the facts and circumstances of the present case and helpful in substantiating contention of the assessee. Accordingly, no good reason to interfere with the order of the ld. CIT(A) upholding the disallowance made - thus, we dismiss this ground of assessee. Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of land for mining purpose for a limited period is an allowable revenue expenditure. 1(c) That no the facts and circumstances of the case, the learned CIT (Appeals) erred in not appreciating that expense incurred on rehabilitation of people/villagers is revenue in nature hence allowable. 1(d) Without prejudice to above grounds no. 1(a) to 1(c), the learned CIT(Appeals) should have directed the Assessing Officer to allow income tax depreciation on such expenditure. 2. That on the facts and circumstances of the case, the learned CIT(Appeals) erred in confirming disallowance of Rs. 1.21 lacs on account of guest house expenses. 3(a) That on the facts and circumstances of the case, the learned CIT(Appeals) erred in confirming 50% of the expenditure disallowed by the Assessing Officer amounting to Rs. 477.31 lacs incurred on assets not belonging to the company. 3(b) That on the facts and circumstances of the case, the action of the learned CIT(Appeals) in confirming 50% of the disallowance has no basis whatsoever and the same has been made on an ad-hoc basis. 4(a) That on the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming disallowance upto 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mining, 5.1 Brief facts of the case are that the assessee is a Public Sector Undertaking, a domestic company, in which the public are substantially interested. It is wholly owned subsidiary of Coal India Ltd. The assessee company is engaged in the activities relating to the development of mines and extraction of coal from various mines under its control and sale of coal. The assessee had filed its original return of income electronically for the year A.Y. 2009-2010 on 25.09.2009 declaring a total income of Rs. 17,45,54,12,238/- and income u/s. 115JB at Rs. 18,09,19,45,593/-. Later on, the assessee also filed copy of Tax Audit Report dated 13.09.2009 in Form No. 3CA and 3CD. The case of the assessee was selected for scrutiny through CASS and returned income was assessed by the AO at Rs. 26,36,85.49 lakhs by making various additions/disallowances aggregating to Rs. 8,91,31.37 lakhs. 5.2 Aggrieved by the assessment order, the assessee preferred appeal before the CIT(A) and the CIT(A) partly allowed the appeal of the assessee. 5.3 Now, the assessee is in further appeal before the Tribunal with the following grounds. 5.4 First, we shall decide the additional ground being 1(E) raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land against the payment of premium it was leased has to be claimed after capitalization thereof by the assessee which is for the purpose of its main business. All expenses are incurred for the purpose of business and are incidental to the holding of rights were claimed u/s. 32(1)(ii) being the license to carry out the mining therefore could not be denied insofar as the Government and the lessee are in control of the asset. The definition of depreciation therefore has been misconstrued for the purpose of allowing deduction by the Assessing Officer and the learned CIT(A) in holding a view on the promulgation of Section 32(1)(ii) with effect from the year 1998-99 which has been further amended w.e.f. Assessment Year 2003-04. In this view of the mater, we are inclined to hold that the assessee is entitled to depreciation as charged to the P L account in accordance with its business exigencies. We direct accordingly. 29. We have perused the case records and given considerable thought to the submissions made by the Ld. AR of the assessee regarding ground No. 1E and we have also observed and considered the findings of the Co- ordinate Bench, Cuttack. In the interest of justice, this gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adhered to. 5.8 Our aforesaid view is duly fortified by the order of Co-ordinate Bench of ITAT, Delhi, D Bench, in the case of Concentrix CVG Customer Management Group Inc. Vs, DCIT ( International Taxation), IT Appeal Nos. 1086 and 1281 (Delhi) of 2022 dated 06.03.2023 reported in [2023) 151 taxmann.com 412 (Delhi-Trib.) wherein it is observed that the assessee may be agitating the same issue before Ld. High Court however, as of today the relevant observations and findings of the Tribunal in assessee s own case for aforesaid AY need to be followed on principle of consistency. Accordingly, these grounds are decided against the assessee. 5.9 Similar issue was also dealt with by Special Bench of ITAT, Mumbai, I Bench in the case of DCIT Vs. Summit Securities Ltd., ITA No. 4977/Mum/2009 dated 10.08.2011 reported in (2011) 12 taxmann.com 372 (Mum.) (SB) wherein it is observed as under: 3. In the case of PNB Finance Ltd. Vs. CIT [(2008) 307 ITR 75 (SC)], Punjab National Bank Limited vested in Punjab National Bank on nationalization in 1969. On that account it received compensation of `10.20 crore during the previous year relevant to the assessment year 1970-71. The assessee claimed cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on record. On perusal of the order of the coordinate bench of the Tribunal in assessee s own case for A.Y. 1997-1998 in ITA No. 141/NAG/2001, order dated 10.05.2019, in para 11, the Tribunal has dismissed this issue after observing as under :- 11. We have perused the case records and heard the rival contentions and given considerable thought to the judicial pronouncements placed before us on record. That while perusing the order of the Ld. CIT(Appeals) we find that he has stated therein that his issue was already decided against the assessee for assessment year 1989-90 and 1996-97. That all the cases laws relied on by the assessee are substantially distinguishable on facts and therefore, is of no help to the assessee. The principle imbibed in the ratio laid down by the Hon'ble Supreme Court in the case of Arvind Mills Ltd. Vs. CIT (1992) 197 ITR 422 wherein it has been held that capital expenditure would not become revenue expenditure simply by reasons of the fact that it was incurred in connection with business activities which ultimately resulted in efficiently carrying on the day to day business. Enduring nature does not necessarily mean that the benefit is derived for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure has been incurred by the assessee-company to acquire the surface rights as well as the right to possession in respect of the leasehold land for enduring benefits and the same being not in the revenue field, the decision in the case of Gotan Lime Syndicate has no application to the facts of the present case. As regards the reliance placed by the learned counsel for the assessee on the decision of Honble Supreme Court in the case of Madras Auto Service (P) Ltd. (supra), it is observed that the assessee in that case had made substantial savings in monthly rent for the entire lease period by spending the amount on construction of a new building on the land taken on long lease and as the said expenditure resulted in a saving of rent which was a revenue expenditure, the Honble Apex Court allowed the said expenditure as revenue expenditure. Similarly, in the case of CIT v. Associated Cement Companies Ltd.(1988) 172 ITR 257 (SC), the assessee by bearing the cost of laying pipelines as per the agreement entered into with the government/municipality, was not needed to pay municipal taxes for 15 years and considering that the assessee in the absence of the said arrangement would h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the revenue, the Honble Apex Court observed that the aim and object of the expenditure would determine the character of expenditure whether it is a capital or revenue and the source or the manner of payment would then be of no consequence. In the present case, the expenditure was incurred by the assessee-company with aim and object to acquire the surface rights as well as the right to possession in respect of the leasehold land for a long period and, therefore, the nature of such expenditure was certainly of capital nature. The revenue has also relied on the decision of Honble Mysore High Court in the case of N. Peer Sahib v. CIT (supra) in respect of which the learned counsel for the assessee has contended that the lease amounts having been paid to the surface owners by the assessee therein for extracting iron coal at the beginning of the mining operation, it was considered as capital in nature whereas in the present case the assessee has made the relevant payments during the currency of the lease period. After carefully perusing the said decision of Honble Mysore High Court, it however, appears that the payment made to the Pattedars who were occupying rights over the land which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion in respect of the leasehold land to facilitate the enjoyment of surface rights. Moreover, as the said acquisition resulted into accrual of enduring benefits to the assessee-company for the balance period of lease, the same has to be treated as capital expenditure, as held by the Honble Supreme Court in the case of Assam Bengal Cement Co. Ltd. v. CIT (supra). As such, considering all the facts of the case and legal position enumerating from the judicial pronouncements discussed hereinabove, we are of the considered opinion that the impugned expenditure incurred by the assessee for acquiring surface rights as well as the right to possession in respect of leasehold land for enduring period was a capital expenditure and the learned Commissioner (Appeals) was fully justified in upholding the action of the assessing officer in treating the same as capital expenditure and thereby disallowing the deduction claimed by the assessee in respect of the same. Therefore, even in assessee's own case, the Co-ordinate Bench of the Tribunal, Nagpur has decided this issue in favour of the Revenue. Further, before us no material has been placed by the assessee to demonstrate that the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther reduced and restricted the addition made by the AO to Rs. 1.21 lakhs on account of failure to establish the expenditure fully to the extent claimed in the profit and loss account. 5.14 At the outset, ld. CIT-DR submitted that the coordinate bench of the Tribunal in assessee s own case for A.Y. 2008-2009 in ITA No. 05/BLPR/2012 vide order dated 06.11.2019 has already decided this issue in favour of the revenue after observing in paras No. 38, 39, 40 41 as under :- 38. The issue raised in ground No. 4 is against disallowance of Rs. 2.10 lakhs on account of guest house expenses. 39. The brief facts on the issue are the assessee company has claimed a sum of Rs. 90.78 lakhs as Guest House expenses. The Assessing Officer observed that the assessee company has neither filed the details of expenditure station wise in respect of guest houses nor has produced registers / records for occupants. The Assessing Officer held that in the absence of any concrete evidences to the effect that the guest houses were used wholly and exclusively for business purposes, the claim could not be allowed in full and restricted disallowance to 50% and accordingly added Rs. 45.39 lakhs to the total income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it results in faster and smooth movement which is essential considering the vast area over which the operations of the assessee are carried out. Such expenses are dully accounted for and approved by the CAG. In this regard, ld. AR referred to the earlier decision of the coordinate bench of the Tribunal in assessee s own case for in ITA No. 141/NAG/2001 Ors (supra) dated 10.05.2019, wherein the Tribunal in ITA No. 124/JAB/2007 has deliberated this issue and decided by following the decision of the ITAT Kolkata Bench of the Tribunal in the case of Integrated Coal Mining Ltd. ITA No. 788/Kol/2010 for A.Y. 2003-2004, has allowed this issue in favour of the assessee after observing as under :- 96. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to disallowance of business expenditure being repair and maintenance of assets not belonging to the assessee. It is an undisputed fact the assessee has incurred the expenses on the assets which does not belong to the assessee. However, it is assessee's contention that by incurring the expenses on such assets, assessee is also benefited and such expenses helps in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connected with the business activity of the assessee and it is difficult to resist the conclusion that the amount of Rs. 50,000 contributed by the assessee towards meeting the cost of construction of the roads under the Sugarcane Development Scheme was laid out wholly and exclusively for the purpose of the business of the assessee. These roads were undoubtedly advantageous to the business of the assessee as they facilitated the transport of sugarcane to the factory and the outflow of manufactured sugar from the factory to the market centres. There can be no doubt that the construction of these roads facilitated the business operations of the assessee and enabled the management and conduct of the assessee's business to be carried on more efficiently and profitably. It is no doubt true that the advantage secured for the business of the assessee was of a long duration inasmuch ITA No. 187/JAB/2008 Ors South Eastern Coalfield Ltd. as it would last so long as the roads continued to be in motorable condition, but it was not an advantage in the capital field, because no tangible or intangible asset was acquired by the assessee nor was there any addition to or expansion of the profit-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs. 3.57 cr. as revenue expenditure. This issue of the revenue's appeal is dismissed. 97. We are of the view that the issue in the present case is identical to that of Kolkata Bench of the Tribunal cited here-in-above. Further before us, Revenue has not pointed out any contrary binding decision in its support. We therefore relying on the aforesaid decision of Kolkata Bench of the Tribunal, hold that the assessee is eligible for deduction of expenses incurred on the assets not owned by assessee and thus, the ground No. 4 of the assessee is allowed. 5.17 Respectfully following the above observations of the coordinate bench of the Tribunal, we are of the view that the assessee is eligible for deduction of expenses incurred on the assets not belonged to the assessee. This ground of assessee is allowed. 5.18 Before parting with it would be essential to mention here that the issue raised in ground No. 3 of the present appeal which was decided by following the decision of the Co-ordinate Bench of ITAT in ITA No. 124/JAB/2007 dated 10.05.2019 is admitted and under sub-judice before the Hon ble Jurisdictional High Court of Chhattisgarh vide Appeal No. TAXC/14/2020. Until any judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. AR of the assessee submitted that TDS has been deducted u/s. 194C of the Act for all these payments. But neither before the Revenue Authorities nor before us, any documentary evidences co- relating TDS u/s. 194C vis- -vis payments made to ESM Companies were furnished. Further, no copies of income tax returns of these ESM Companies were filed before us. Onus is on the assessee to prove the genuineness of any transaction not only verbally but also by relevant documents placed on record which in this case the assessee has not done. We find that the Hon'ble Punjab Haryana High Court in the case of Commissioner of Income Tax Vs. S.G. Exports in ITA No. 624 of 2010 has held that a perusal of the findings of the CIT(A) and the Tribunal shows that both the Authorities have placed onus on the Revenue to establish the in- genuineness and non-existence of the parties. According to the Hon'ble High Court this finding is wrong since the assessee who has claimed that it had incurred expenses on account of labour charges, therefore, the onus is on the assessee to prove the said facts by producing cogent and convincing evidences including the identity of the parties along with ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liberty to decide the issue as per materials available on record. Hence, ground Nos.5 and 6 raised in appeal by the assessee are allowed for statistical purposes. 11. Since the issues are common and parties are also similar and the very fact that genuineness of transaction is in doubt and is not clear even in the relevant assessment year and since no evidences were brought on record by the Ld. AR for the assessee, therefore, in the interest of justice, the matter should be remitted back to the file of the Assessing Officer maintaining the same parity in justice, for determining the allowability of expenses as directed in our earlier order. We order accordingly. Thus, ground No. 3 raised by assessee is allowed for statistical purposes. 5.20 Respectfully following the above observations of the Tribunal, we also direct the AO to determine the allowability of expenses as directed in the aforesaid observations of the Tribunal. Accordingly, we allow this ground of assessee for statistical purposes. 5.21 With respect to status of the aforesaid decision of the ITAT pertaining to coal transport expense paid to ESM incurred by the company as submitted by the Ld. AR, accordingly to informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court in the case of Exide Industries Limited (supra), we remit the issue to the file of AO to verify, examine and allow the payment towards leave encashment in the year of actual payment of leave encashment. If the same has been paid before the due date of filing of the return for the relevant assessment year, then the expenditure is allowable to such extent, if the payment has been made after the due date of filing of the return of income, the amount is to be disallowed. Needless to say, assessee shall be provided with reasonable opportunity of being heard. Accordingly, this ground of assessee is partly allowed for statistical purposes. 5.24 In the result, the appeal of the assessee in ITA No. 201/BIL/2012 for A.Y. 2009-2010 is partly allowed for statistical purposes. ITA No. 204/BIL/2012 for A.Y. 2009-2010 (Revenue s Appeal) 6.1 Now, we shall take the appeal of the revenue in ITA No. 204/BIL/2012 for A.Y. 2009-2010, on the following grounds :- 1(a) That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on fact in deleting the addition which had been made on account of disallowance of Community Development Expenditure amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al nature etc. 5. That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on fact in deleting the addition amounting to Rs. 2310. 67 lakhs which had been made by disallowing the expenditure incurred on reimbursement of LPG cylinders to the employees in spite of the facts on records that during the course of assessment proceedings the assessee company could not explain the admissibility of the claim. 6. That on facts and in circumstances of the case the Id CIT(A) erred in law and on facts in restricting the disallowance from Rs. 954.62 lakhs to Rs. 477.31 lakhs made by the AO towards assessee's claim of expenditure on assets not belonging to the assessee. 7. That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on fact in deleting the addition amounting to Rs. 1273.09 lakhs which had been made by disallowing the expenditure on plantation of trees and reclamation of land respectively in spite of the facts on records that above expenditure is a capital expenditure because the expenditure incurred under the above heads ensure a permanent benefit to the assessee. 8. That on the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und No. 1: Disallowance of community Development Expenditure; 6.3 Ld. CIT-DR relied on the order of AO and submitted that the ld. CIT(A) has wrongly deleted the addition made by the AO on account of community development expenditure claimed by the assessee as there was no admissible material produced by the assessee either before the AO or before the CIT(A) to substantiate the claim. It was also submitted by the ld. CIT-DR that the expenditure claimed by the assessee was in the nature of charity and it could not be said to have been incurred for the purpose of business. Therefore, the ld. CIT-DR submitted that the addition deleted by the ld. CIT(A) may kindly be reversed and that of the order of the AO may be restored. 6.4 Ld. AR before us submitted that the very same issue has been decided by the coordinate bench of the Tribunal in assessee s own case in ITA No. 141/JAB/2001 Ors., order dated 10.05.2019 and also in ITA No. 187/JAB/2008 Ors dated 06.11.2019, wherein the Tribunal following its earlier order dated 28.02.2002 passed in ITA Nos.18-22/NAG/2001, allowed the issue in favour of the assessee. Therefore, it was the prayer to decide the covered issue in accordance with earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the AO, however, ignored a very relevant and material fact that the population residing in the area which was benefitted by the provision of such basic amenities mainly comprised of the workers of the assessee-company and their families. He also appears to have overlooked the fact that such basic amenities could not have been provided to the assessee's employees in isolation as the said expenditure in any case had to be incurred for the entire area as a whole. Before us, the learned counsel for the assessee has contended that over 90 per cent of the population residing in that area constituted assessee's own workers and their families and it appears from the record that this fact has not been disputed by the Revenue at any stage. Moreover, in the absence of such facilities in that area, it would not have been possible for the assessee- company to get the proper work force for its operation without which it was not possible to carry on its business effectively and efficiently. The labour by itself is an important input for any type of business, more particularly for the business of the assessee-company of mining operation and, therefore, the expenditure incurred mainly f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is charged 30 units per month, which is microscopic in nature. According to the learned AO, there are around 60,000 staff quarters in townships in SECL, which are provided with electricity. He stated that most reasonable and modest estimate of average consumption of power by employees would not be less than 200 units per month of electricity per family because almost all of the employees reside in smaller houses whereas some of the employees also live in higher class of accommodations. He estimated that since Electricity Board charges electricity to the Assessee at rates applicable to industrial units, the average rate of electricity comes to Rs 4.50 per unit. Thus, the quantum of non-business expenditure on this account will be less than 50% of total claim. Accordingly, the ld. CIT-DR submitted that the ld. AO has rightly disallowed 50% of the total expenditure claimed under this head. However, without considering the relevant facts and materials available on record, the CIT(A) has wrongly allowed the assessee s claim relying its earlier order which deserves to be reversed. Ld. CIT-DR also referred to the decision of the coordinate bench of the Tribunal in assessee s own case deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause he has done the entire exercise of estimation without using any factual data of number of quarters in townships and their types and sizes, average size of family to estimate average electricity consumption per household. Moreover, as stated and as the Assessee's submission is partly reproduced by the learned AO in the assessment order, it can be seen that vast majority of the electricity expenditure is incurred towards common areas of township and is as such incurred for the purposes of business. 6.11 We have considered the rival submissions and perused the record carefully along with the order of the coordinate bench of the Tribunal referred to (supra) in assessee s own case wherein the Tribunal has partly allowed this ground after holding as under :- 62. After hearing the parties on this issue, we are of the considered view that it is undisputed fact that a National Coal Wage Agreement has been entered into by the assessee with the employees and there itself free usage of electricity is mentioned as 30KWH per employee per month, anything beyond that is supposed to be chargeable. The CIT(A) s order does not disclose or provide any finding regarding having of any evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2008-2009 in ITA No. 03/BLPR/2012, order dated 06.11.2019, wherein the Tribunal has dismissed this ground of revenue after following the reasoning given by the coordinate bench of the Tribunal in ITA No. 18- 22/NAG/2001, order dated 18.02.2002. The relevant observations of the Tribunal in this regard are as under :- 64. The brief facts on the issue are that the assessee company has debited expenses on account of grant to schools and institutions at Rs. 1135.86 Lakhs. The submission of the assessee in this regard has been depicted in the assessment order. The Assessing Officer noticed that the disallowance on this issue was made in respect of other subsidiaries of Coal India Ltd and expenses on education can be allowed to the extent of reimbursement of tuition fees of the students who are children of the assessee s employees only. Further the Assessing Officer observed that as regard the assessee s contention that the first Appellate Authority has allowed the claim of the assessee is concerned, he observed that the order of First Appellate Authority has not been accepted by the Department and has preferred appeal before the Income Tax Appellate Tribunal on this issue. He noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 40A(9) was only to discourage contribution to any trust which do not benefit the employees in any manner. In the instant case, reading of the trust deed would clearly reveal that the beneficiaries of the trust are the assessee's employees. Hence, having regard to the legislature intention in introducing the said section and the fact that the contribution constituted employees welfare measures as well as with such contribution made pursuant to an agreement with the employees is a requirement under the Industrial Dispute Act violation of which would result in penalty to the defaulter, an assessee is entitled for the allowance of the relief asked for. 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 it's 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 Dispute 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed his predecessor s order and observed that the assessee company has claimed to have treated the reimbursement of expenditure on account of the provision of LPG to the employees as perquisite and has been deducting income tax thereon, the AO s action is disallowing the above expenditure is not justified. Therefore, we are of the considered view that the order of the Ld. CIT(A) on this issue is fair and reasonable and the same does not call for any interference. Thus, ground No. 5 raised by the Revenue is dismissed. 6.18 Respectfully following the above observations of the Tribunal, this ground of revenue is dismissed. 6.19 Apropos, status of the issue pertaining to welfare expenses-LPG, the department has preferred an appeal before the Hon ble Jurisdictional High Court in ITA No. TAXC/23/2020 against the order of ITAT in ITA No. 03/BLPR/2012 for the A.Y. 2008-09, however, the admission of the same was not reflected on the website of Hon ble High Court as on 31st July, 2023, therefore, till the issue is admitted and decided by the Hon ble High Court, the decision of Tribunal following the principle of consistency shall prevail and thus, has been followed. Ground No. 6 : Disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s:- (i) CIT Vs. Malayalam Plantation Ltd. (1964) 53 ITR 140 (SC) (ii) CIT Vs. Gogte Minerals (1996) 220 ITR 29 (Kar) (iii) Smt. K. Suryakumari Venu Vs. ACIT (2016) 70 taxmann.com 81. We have heard the rival contentions and perused the record. We find that the Assessing Officer has disallowed the expenditure incurred by the assessee on account of tree plantation expenses and others to be capital in nature, whereas the CIT(A) relying on the orders of his predecessors has deleted the disallowance made by the Assessing Officer by stating it as revenue expenditure. We find that this issue is squarely covered by the ratio laid down by the Hon ble Supreme Court in the case of CIT Vs. Malayalam Plantation Ltd. (supra),CIT Vs. Gogte Minerals (supra) and Smt. K. Suryakumari Venu Vs. ACIT (supra).Before us, no fallacy with the finding of CIT(A) has been pointed by Ld. DR. We therefore find no reason to interfere with the order of CIT(A). Hence, we uphold the order of CIT(A) in deleting the disallowance made by the Assessing Officer on account of expenses on trees plantation and others. Thus, the ground No. 7 raised by the Revenue is dismissed. 6.22 Respectfully following the above observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve noted in paragraph 22 earlier in this order, is uniform all along not only in this case of this assessee but in the case of other similarly placed assessees, and the revenue authorities have accepted that criterion all along. It is a purely a factual matter which permeates through different assessment years, and for the detailed reasons discussed earlier, there is no good reason to disturb this criterion. In any case, the authorities below have neither suggested any alternative criterion, which will be appropriate on the facts of this case, nor have they have demonstrated that the facts implicit in their stand actually exist. As a matter of fact, the apprehensions of the Assessing Officer seem to be purely hypothetical and in the realm of conjectures and surmises inasmuch as not one instance is shown in which the overburden removal expenses, booked in the accounts as revenue expenditure, actually pertain to removal of overburden only at the surface level and should be, therefore, treated as capital expenditure. Similarly, while declining the deduction of overburden removal as capital expenditure, the Assessing Officer, as also the CIT(A), has not treated any part of this expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing effective grounds, which have been argued during the course of hearing :- 1 Non consideration of revised return. 2 Disallowance of expenditure on actuarial valuation of employee compensation; 3 Disallowance of depreciation on Apollo Hospital Building; 4 Disallowance of expenditure on account of land revenue; 5 Disallowance of prior period expenses 6 Disallowance of Land Compensation Rehabilitation Expenses; 6E Amortization of land rehabilitation 7 Disallowance u/s. 40(a)(ia) of the Act; 8 Disallowance of expenditure on assets not belonging to company (roads etc.); 9 Disallowance of coal transportation expense paid to ESM companies; 10 Disallowance of expenditure on accumulated liquidated damages penalty; 11 Short grant of TDS/TCS credit 12 Levy of interest u/s. 234 B,C D of the Act. Ground No. 1 : Non consideration of revised return. 7.2 The Ld. AR of the assessee at the very outset submitted that they do not wish to press this ground, therefore, the same has been permitted to be withdrawn and thus, stands dismissed. Ground No. 2 : Disallowance of expenditure on actuarial valuation of employee compensation: 7.3 Facts of the issue, as emanated from the orders of the lower autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the decision of Hon ble Supreme Court in the case of Metal Box India Ltd., 73 ITR 53(SC) and submitted that the liability of gratuity created on the basis of actuarial valuation is scientifically created liability. The relevant part of the said Circular is extracted as under: .At the relevant time when this circular was issued, the Supreme Court s decision in the case of Metal Box Co. of India Ltd. Vs. Their Workmen (1969) 73 ITR 53 was available and taking note of certain observations in this particular decision of the Supreme Court, it was held that provision of gratuity on a scientific basis ( in the form of actuarial valuation carried out every year) could be considered to represent a real liability of the employer to the employees. Accordingly, the Board decided that such provision would not be a contingent liability and may be treated as admissible deduction under section 37(1). Further the provisions created on the basis of actuarial valuation are made on scientific basis because field of actuary is named as actuarial Science . Moreover, AS 15 used by the Institute of the Chartered Accountants of India deal with employee benefits. Para 64 of the said AS provides for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is amenable to a deduction if there is an element of certainty that it shall be incurred and it is possible to estimate the liability with reasonable certainty even though the actual quantification may not be possible as such a liability is not of a contingent nature. See Bharat Earth Movers (supra). The principles enunciated above have been applied by the Supreme Court also in the case of Metal Box Company (supra) wherein the Supreme Court was considering the question whether estimated liability under gratuity schemes were amenable for deduction from gross receipts shown in the P L a/c. The observation of the Supreme Court being pertinent are extracted hereinbelow : But the contention was that though Sch. VI to the Companies Act may permit a provision for contingent liabilities, the IT Act, 1961, does not, for under s. 36(v), the only deduction from profits and gains permissible is of a sum paid by an assessee as an employer by way of his contribution towards and approved gratuity fund created by him for the exclusive benefits of his employees under an irrevocable trust. This argument is plainly incorrect because s. 36 deals with expenditure deductible from out of the taxable inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated above, the case of Indian Molasses Co. (supra) is different from the present case. As stated above, in the present case we are concerned with an army of items of sophisticated (specialiased) goods manufactured and sold by the assessee whereas the case of Indian Molasses Co. (supra) was restricted to an individual retiree. On the other hand, the case of Metal Box Company of India (supra) pertained to an army of employees who were due to retire in future. In that case the company had estimated its liability under two gratuity schemes and the amount of liability was deducted from the gross receipts in the profit and loss account. The company had worked out its estimated liability on actuarial valuation. It had made provision for such liability spread over to a number of years. In such a case it was held by this Court that the provision made by the assessee-company for meeting the liability incurred by it under the gratuity scheme would be entitled to deduction out of the gross receipts for the accounting year during which the provision is made for the liability. The same principle is laid down in the judgment of this Court in the case of Bharat Earth Movers (supra). In that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashment scheme proportionate with the entitlement earned by employees of the company, inclusive of the officers and the staff, subject to the ceiling on accumulation as applicable on the relevant date, is entitled to deduction out of the gross receipts for the accounting year during which the provision is made for the liability. The liability is not a contingent liability. The High Court was not right in taking the view to the contrary. 7.9 Referring to the aforesaid decisions relied upon by the assessee, it was the contention of the assessee that the provision made for employee s compensation on fatal accident on the basis of actuarial valuation as directed by the holding company i.e. Coal India Ltd., copy of sample actuarial valuation pertaining to various employee benefit liabilities including fatal mine accidental benefit duly signed by Mr. Bhudev Chatterjee, actuary as on 31.03.2015 issued on 27th April, 2015 was furnished. The certificate issued by the actuary was the certification of actuarial valuation as supplied by the company and the data was accepted by the actuary for valuation purpose. The total amount of liability as at 31.03.2015 was Rs. 41,08,83,271/-. The certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability is carved in the nature of a beneficial provision and leave can only be encashed by the employees in accordance with the terms and conditions of employment. It is further 3 (2000) 6 SCC 645 contended that since the due date for encashment of leave does not arise in the same accounting year in which provision is made, there is no question of subjecting the deductions against such liability upon actual payment. 43B (f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee, shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Inconsistency of clause (f) and absence of nexus with Section 43B 31. The High Court has supported its finding of invalidity by recording two observations vis-a-vis the previously existing (unamended) clauses of Section 43B first, that clause (f) is inconsistent with other clauses and nature of deduction targeted in clause (f) is distinct from other deductions. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not hold good in terms of another Circular No. 146 dated 26.09.1974, since after the judgment by the Hon ble Supreme Court in the case of Bombay Dyeing and Manufacturing Company Ltd. Vs. CWT reported in 1974, 93 ITR 603 (SC) wherein their Lordships have observed that the decision in Metal Box Company s case (supra) was rendered under a different Act and in a different context. In view of this, the earlier instruction of Board referred to above stands withdrawn with immediate effect. Under such circumstances, assessee s claim to allow provision for employee compensation on fatal accident within the provisions of Section 37(1) does not deserves to be acceptable. 7.12 Under such facts and circumstances, the analogy articulated by Hon ble Apex Court in the case of M/s. Excide Industries Ltd. (supra) would be the most appropriate ratio of law that has to be adopted wherein Hon ble Apex Court has held that concededly, it is a provision to attach conditionality on deductions otherwise allowable under the Act in respect of specified heads, in that previous year in which the sum is actually paid irrespective of method of accounting , though the observations of the Hon ble Apex Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to scarcity of the specialised doctors, the assessee company had to enter with an agreement with Apollo Hospital for treatment of its employees and their dependants. The Apollo Hospital is bound to treat all the patients referred to by the SECL at the concessional rate. He submitted that since this hospital is intended for use by SECL for its employees, depreciation has been claimed by the assessee company as eligible business expenditure. Ld AR relied on the following decisions: i) Indusind Bank Ltd vs ACIT, 135 ITD 165 (Mum) ii) Chennai Properties Investments Ltd., 373 ITR 673 (SC) iii) Sultan Brothers Pvt Ltd. vs CIT, 51 ITR 353 (SC) iv) CIT vs National Newsprints Paper Mills Ltd., 114 ITR 388 (MP) v) CIT vs Wamer Hindustan Ltd., 364 ITR 208(AP) 7.14 Further, ld AR relied on the decision of Hon ble Supreme Court in the case of ICDS Ltd vs CIT, 212 Taxman 550, wherein, it has been held that if there is a specific stipulation in lease agreement that in case of default committed by the lessee, the lessor is empowered to repossess plant and machinery and on termination of lease, leased plant and machinery will be returned to lessor in the same condition in which they are taken, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee on hospital building. C. Decision of the CIT(A) and its basis (page numbers of the appellate orders of the respective years are as in the above table) The learned CIT(A) by confirming order of the learned AO held that rental income received from Apollo Hospital should be asseseed as income from house property and not income from business as treated by the assessee company. D. Assessee's arguments before the Hon'ble Tribunal Before adverting to the arguments on applicable law, it might be useful to appreciate the facts. which are listed as under: 1) The assessee company has undertaken to fulfil its obligation of striving for construction of hospital for its employees, which arises from each successive National Coal Wage Agreements signed with employees. 2) It obtained lease of the land from the State Government, on which construction of only hospital is permitted by the State Government. 3) It has almost completed construction of the hospital, when it signed licence agreement with Apollo Hospital for running hospital because as stated, initially it wanted to run the Hospital. 4) The assessee signed licence agreement with the Apollo Hospital after obtaining No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties. That intention may be ascertained by framing the following questions: Was it the intention in making the lease and it matters not whether there is one lease or two. that is, separate leases in respect of the furniture and the building that the two should be enjoyed together? Was it the intention to make the letting of the two practically one letting? Would one have been let alone and a lease of it accepted without the other? If the answers to the first two questions are in the affirmative, and the last in the negative then, in our view, it has to be held that it was intended that the lettings would be inseparable. As stated, providing advanced medical care to its employees to fulfil its obligation under National Coal wage Agreement is the assessee company's dominant objective under this agreement. Accordingly, rental income should be assessed as business income. Argument 3 Income earned from renting out is business asset for efficient conduct of its business is assessed as Income from Business and hence, corresponding depreciation is a business expense. Depreciation claimed on company's residential quarters, employee residential township assets etc. are allowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief to which the assessee is entitled even though there was no plea in that regard. E. Case laws relied on (Copies attached) Universal Plast Ltd v CIT [(1999) 237 ITR 454 (SC)], copy placed as Attachment M1 Sultan Brothers (P) Ltd v CIT [(1964) 51 ITR 353 (SC)], copy placed as Attachment M2 CIT v National Newsprint Paper Mills Ltd [(1978) 114 ITR 388 (MP)], copy placed as Attachment M3 CIT v Mcleod Co Ltd [(1993) 203 ITR 290 (Calcutta)], copy placed as Attachment M4 Vyline Glass Works Ltd v ACWT [(2012) 20 taxmann.com 32 (Chennai)], copy placed as Attachment M5 ITO v Shanaya Enterprises [ITA No 3647/Mum/2010, dated 30.06.2011] (Page 5, 2nd para) copy placed as Attachment M6 ITO V Tejmalbhai Co [(2006) 99 ITD 399 (Rajkot)] (para 8), copy placed as Attachment M7 DCIT v Tewari Warehousing Co [(2018) 92 taxmann.com 168 (Kolkata - Trib.)] (para 8.1 and 8.2), copy placed as Attachment M8 ITO v RR Industries Ltd [(2012) 21 taxmann.com 448 (Chennai)] (para 14), copy placed as Attachment M9 CIT v Ramnath Goenka [(2001) 252 ITR 653. 654 (Mad)], copy placed as Attachment M10 7.15 In reply, ld CIT DR strongly supported the orders of the AO and ld CIT(A). He submitted that the rent being paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any manner as it desires. Provided however that it shall not affect the right of licensor under the said agreement. The licensee was also restricted by Clause No. 4.9 to mortgage the said premises with any bank or financial institution or other entity as security for loans or otherwise so long as the agreement is subsisting. On further perusal of the license agreement in Para 5 under the head Covenants and obligations of licensee the licensee was under obligation to arrange additional power facilities at its own cost after depositing necessary fee/ deposits to the electricity board. The licensee was required to employ its own staff including doctors, nurses, technicians for running of the hospital, the persons so employed shall have no nexus or connection with the licensor or Coal India or any of its group companies. Such covenants / obligations cast upon the licensee clearly shows that the licensor has provided the land and building to the licensee for running of the hospital and the licensor was in no way connected with the day to day operation of the hospital. Under such facts and circumstances, we are of the considered view that the license fee is in the nature of rental income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee is partly allowed for statistical purposes. Ground of appeal No. 4 : disallowance of expenditure on account of land revenue 7.18 The next ground relates to disallowance of expenditure on account of land revenue. In this regard, ld. AR submitted that the expenditure incurred by the assessee as compensation paid to displaced persons on acquisition of their land in lieu of their employment. It was also submitted that the expenditure on account of land revenue is revenue expenditure and not capital in nature because there is neither acquisition of any capital asset nor any enduring benefit arising to the assessee. The aforesaid expenditure has been incurred purely as a matter of condition precedent to conduct its business. The ld. AR further submitted that the assessee has to incur such expenses on a continuous basis and hence the same is revenue in nature and eligible for the deduction while computing the income tax. In this regard, ld. AR relied on the decision of coordinate bench of the Tribunal in the case of Western Coal Fields Ltd., vs DCIT in ITA No. 475/Nag/2007 dated 10.8.2009, wherein, it is held that the nature of the expenditure as compensation in lieu of em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that the Division Bench of this Court in Airport Authority of India (supra) does not lay down the correct law. We accordingly over rule the same holding that such an expenditure if incurred by the assessee would be on revenue account and is not capital in nature. Having held so, we turn to the reasons given by the Tribunal in denying this expenditure. 7.21 On the issue of payment of compensation, Hon ble High Court of Calcutta in the case of Shyam Burlap Company Ltd. Vs. CIT, reported in (2016), 380 ITR 151 (Cal.) has held that where rental income earned by the assessee was taxable as business income, compensation paid to existing tenants to obtain vacant possession of building so as to earn higher rental income by letting it out to new tenants had arisen out of business necessity and commercial expediency which was to be allowed as revenue expenditure. 7.22 Respectfully following the above observations and principle of law laid down by the Hon ble Delhi High Court and Hon ble Calcutta High Court in the case of Airport Authority of India, (supra) and Shyam Burlap Company Ltd. Vs. CIT (supra), we are of the opinion that if the amounts have been incurred by the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR of the assessee submitted that the expenditure was crystalized during the A.Y. 2010-11 on account of write off of stores and towards contractual liability for employee wages arising from national coal agreement. The assessee placed reliance on Saurashtra Cement and Chemical Industries Ltd. Vs. CIT (1995) 213 ITR 523 ( Guj) wherein the Hon ble High Court has held that: merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year in question on the basis of maintaining accounts on the mercantile basis. In each case where the accounts are maintained on the mercantile basis it has to be found in respect of any claim, whether such liability was crystallized and quantified during there previous year so as to be required to be adjusted in the books of account of that previous year. If any liability, though relating to the earlier year, depends upon making a demand and its acceptance by the assessee and such liability has been actually claimed and paid in the later previous years, it cannot be disallowed as deduction merely on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round No. 1 in assessment year 2009-10(supra) in ITA No. 201/BIL/2012. In line with our decisions in that appeal, this issue is decided against the assessee. Consequently, this ground of the assessee is dismissed. Additional Ground No. 6E : amortization of land rehabilitation 7.27 This issue is also identical to the ground raised by the assessee in additional ground No. 1E for the assessment year 2009-10 in ITA No. 201/BIL/2012 (supra). While adjudicating this issue, we have restored the matter to the file of the AO to decide the same afresh in line with the decision of the Co-ordinate Bench of this Cuttack Tribunal in the case of East India Minerals Limited (supra) after providing reasonable opportunity of hearing to the assessee. Thus, in line with our decision, this additional ground raised by the assessee is allowed for statistical purposes. Ground No. 7 : disallowance u/s. 40(a)(ia) of the Act 7.28 The AO disallowed few of the expenses u/s. 40(a)(ia) of the Act on the ground that the assessee have not deducted tax at source on said expenses. The CIT(A) in appeal confirmed the order of the AO and stated that the amendment in Section 40(a)(ia) of the Act was brought in Finance a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in that appeal, this issue is decided in favour of the assessee. In line with our above decision, for this year also, accordingly this ground of the assessee is allowed. Ground No. 9 : coal transportation expenses paid to ESM companies. 7.33 This ground is identical to the issue raised by the assessee in ground No. 4 in assessment year 2009-10 (supra) in ITA No. 201/BIL/2012. In line with our decision and observation in the said appeal, we also direct the AO to determine the allowability of expenses as directed in the above observations of the Tribunal. This ground is allowed for statistical purposes. Ground No. 10 : accumulated liquidated damages penalty. 7.34 In this case, the assessee had received liquidated damages from various parties during the year under consideration for belated supply of the machineries and the assessee treated the same as capital receipt. During the course of assessment proceedings, the AO noticed that the liquidated damages received from various parties is compensation for the loss of profit during to belated supply of the machineries and hence, the AO treated the same as revenue in nature. It was also noted by the AO that the assessee did not provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the judgments, the settled position of law is that if the compensation relates to delay in procurement of capital assets, the same should be treated as capital asset, therefore, if the amount received by the assessee towards compensation for sterilization of the profit earning source and not in ordinary course of its business, the same should be treated as capital receipt in the hands of the assessee. Considering the nature of receipt explained by the assessee towards liquidated damages on account of belated supply of machinery by the suppliers has been held as capital receipt. However, in the present case since the assessee was failed before the revenue authorities to substantiate the fact that the liquidated damages are capital in nature, in our opinion, when the assessee could not prove with any relevant and supporting documents as to how the liquidated damages are capital in nature, and since many of the other grounds in the present appeals are being restored to the file of the A.O in the interest of justice, we find it appropriate to provide the assessee one more opportunity to substantiate its claim by submitting relevant information/ evidence before the A.O., with the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elates to deleting the disallowance of overburden removal expenses. This ground is similar to the ground No. 9 raised by the revenue in its appeal for A.Y. 2009-2010 in ITA No. 204/BIL/2012, wherein the Tribunal following the decision of the Jabalpur Bench of the Tribunal in the case of Northern Coalfields Ltd., reported in 59 taxmann.com 394 (Jabalpur.Trib.) has dismissed this ground of revenue. Respectfully following the reasoning and observations given by us in the appeal of the revenue for A.Y. 2009-2010, we also dismiss this ground of appeal of the revenue. Ground No. 3 : grant to school and institutions 8.4 This ground relates to deleting the addition made on account of expenditure on grant to school and institutions. This ground of revenue is similar to the ground No. 4 raised by the revenue in its appeal for A.Y. 2009-2010 in ITA No. 204/BIL/2012, wherein we have dismissed this ground of revenue after following the reasoning and observations given by the coordinate bench of the Tribunal in ITA No. 18/NAG/2001, order dated 18.02.2002. In view of the above, we also respectfully following the same, dismiss this ground of revenue and uphold the findings given by the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n perusal of the assessment order, as per the Ld. AO the assessee company is being harping on the same issue on the guidelines issued by the Government of India for past several years, but the assessee failed to furnish the required documents to substantiate its claim. The CIT(A) though followed the decision of the coordinate bench of the Tribunal in ITA No. 121 122/Nag/2001, order dated 28.02.2002 for A.Ys. 1995-96 1996-97, however, on perusal of the assessment order, wherein the A.O has observed that the assessee was kept on relying on the guidelines issued by the Govt. of India so as to substantiate the claim of expenses under the head CSR. However, while the information pertaining to name, address and TDS in respect of CSR was called for, no such details were furnished by the assessee. The Ld. AO further stated that under such circumstances, veracity of expenses remained unconfirmed, the reliability of expenses incurred under the head CSR was also doubtful. With all such observations, the claim of the assessee was not allowed by the A.O. On perusal of appellate order, it is not discernible as to whether ld. CIT(A) has verified the required documents, which were sought by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciding the appeal of the revenue in Ground No. 8 for A.Y. 2009-2010 in ITA No. 204/BIL/2012, wherein we have remitted the issue to the file of AO for determining the allowability of expenses in view of the direction given in the earlier orders of the Tribunal as stated supra. Thus, this ground of revenue is allowed for statistical purposes. 8.12 Thus, appeal of the revenue for A.Y. 2010-2011 in ITA No. 382/BIL/2014 is partly allowed for statistical purposes. ITA No. 162/BIL/2014 (AY:2010-2011) (Assessee s Appeal) 9.1 This appeal is filed against the order of Ld. CIT(Appeals), Bilaspur dated 23.12.2016 in turn arising from the order of the Ld. AO i.e. ITO, Circle-1(1), Bilaspur u/s. 143(3) r.w.s.147 dated 30.07.2015. The Grounds of appeal raised by the assessee are as under: 1(a) That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals) ['Ld. CIT(Appeals)'] has erred in not appreciating that the order passed by the Learned Assessing Officer ('Ld. AO') under section 143(3)/147 of the Income Tax Act. 1961 (Act') dated 30 July 2015 was bad in law, void ab initio and liable to be struck down. 1(b) That on the facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal has furnished a written submissions in Enclosure D , which reads as under: Ground 1: Reassessment is bad in law Re-assessment proceedings are invalid in case an issue or query is raised and answered by assessee in the original assessment proceedings and AO did not make addition in the original assessment order. Hence, re-assessment proceedings is based on his change of opinion , which is not permissible. Reliance is placed on: - Aroni Chemicals Ltd v DCIT [(2014) 367 ITR 405 (Bom)] (Para 14) Monarch Quershi Builders v UO! [(2021) 133 taxmann.com (Bom)] (Para 13) Pfizer Ltd V ACIT [(2022) 134 taxmann.com 97 (Bom)] (para 4) Commissioner of Income Tax v Rubix Trading (P.) Ltd [(2019) 108 taxmann.com 177 (SC)). Change of opinion on reappraisal of same facts The reasons to believe provided to the assessee [Page 1-2 of Supplementary PB filed on 28 October 2019] refer to details of additions in plant and machinery and additional depreciation claimed thereon provided by the assessee company before the AO during assessment proceedings. It is settled that for taking an action under section 147 of the Act, it is vital for the Assessing Officer to have valid reason(s) for reopening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tax officer subsequent to the assessment based on which reassessment could be resorted to under section 147 of the Act. Reliance is placed on the following judicial precedents: Commissioner of Income Tax vs. The Simbhaoli Sugar Mills Limited [Delhi High Court] [ITA no. 1391/2009, 1362/2009 and 1130/2009 decided on March 9, 2011] Indian Eastern Newspaper Society vs CIT [(1979) 119 ITR 996 COL A Ground 1: Disallowance of additional depreciation on merits The Assessee has claimed additional depreciation u/s 32(1)(iia) of the Act on Caterpillars and 240 Tonne Dumpers treating them as machineries. Items like Caterpillars or 240 tonne Dumpers have special tyre adopted for use in the enclosed premises of the mining areas only. Therefore, as per the provisions of the Motor Vehicles Act 1988, these items as described are not vehicles within the ambit of the Motor Vehicles Act 1988. The dumpers have specialised tyres called Off the Road (OTR), which are not fit for using in regular roads. Section 2(28) of the Motor Vehicle Act reads as: motor vehicle or vehicle means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Attachment D4 Rasalika Trading and Investment Company Private Limited Vs DCIT [(2014) 365 ITR 447 (Del) copy placed as Attachment D5 Calcutta Discount Co Ltd v ITO ((1961) 41 ITR 191 (SC)] copy placed as Attachment D6 CIT v Eicher Ltd [(2007) 294 ITR 310 (Delhi)] copy placed as Attachment D7 JCIT v Cognizant Technology Solutions India Pvt Ltd [TS-06-SC-2023] dated 03.01.2023 copy placed as Attachment D8 CIT vs. Gotan Lime Stone Khanij Udyog [(2008) 299 ITR 0368 (Raj HC)] copy placed as Attachment D9 . Commissioner of Income Tax Vs. Bajrang Enterprises [(2004) 134 Taxman 0659 (Mad HC)] copy placed as Attachment D10 Commissioner of Income Tax Vs. Sibson Construction Co. [(1 997) 90 Taxman 0175 (Gauhati HC)] copy placed as Attachment D11 Agrawal Flooring Stone Co Vs. CIT (1995) 216 ITR 757 ( Raj.) Copy placed as Attachment D12 ITO v Ghuge Co (1993) [47 TTy 33 (Pune)} 9.4 While submitting the aforesaid written submissions the Ld. AR further drew our attention to Page 166 of the paper book containing questionnaire dated 16.10.2012 issued by the A.O during the original assessment proceedings u/s. 143(3). According to question No. 54 and 55, the A.O has specifically asked following queri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of audit objection raised. Reliance was placed in the case of the Simbhaoli Sugar Mills (supra) and Indian Eastern Newspaper Society (supra). With the aforesaid submissions, Ld. AR requested to hold the reassessment proceedings initiated u/s. 147 as bad in law and void ab initio. 9.6 On the other hand, the Ld. CIT-DR vehemently supported the orders of the revenue authorities. 9.7 We have considered the rival submissions, perused the material available on record and case laws placed before us for our consideration. Admittedly, the issue pertaining to disallowance of additional depreciation on caterpillars and Dumpers was reopened and assessed by way of reopening u/s. 147 of the Act and the assessment was done on account of audit objection. The validity of the reopening of assessment has been challenged by the assessee on account of change of opinion including other contentions that if there is no observation by the Ld. AO in the assessment order the same cannot be reason for drawing an adverse opinion against the assessee. The contention of the assessee was that once the material which was the foundation for reopening of assessment was available with the A.O during the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assessment therefore, there was no conclusive formation of opinion. Further, the Ld. AO while issuing the reasons recorded u/s. 148(2) of the Act has categorically mentioned that he has reason that income chargeable to tax has escaped assessment within the meaning of Section 147 of the Act. Consequently, the argument by the Ld. AR based on certain judgments referred to (supra) which are distinguishable from the facts of the present case, accordingly the claim of the assessee that there was change of opinion is not found to be substantiated and thus, the same is rejected. With respect to the contention of the assessee that information available at the time of original assessment proceedings, following the order of Hon ble Delhi High Court in the case of Rasalika (supra) that the reopening proceedings based upon stale information which was available at the time of original assessment and in fact, appears to have been used by the A.O at the relevant time during the completion of proceedings u/s. 143(3) of the Act, found to be misplaced as in the present case, there was no whisper about the availability and use of such information by the A.O which was the basis for reopening of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein provisions of Section 32(iia) were reproduced and had categorically mentioned that he has the reason to believe that the income chargeable to tax has escaped assessment. The reasons recorded by the A.O has no mention about the audit objection; therefore, even if the reopening is prompted by the Audit objection but was based on analysis of information available in the form of audited accounts of the assessee and not merely on the basis of audit objection. Under such circumstances, the plea of the Ld. AR that reassessment proceedings cannot be initiated on the basis of audit objection, does not survive. 9.9 The second contention of the Ld. AR on merits regarding the disallowance of additional depreciation that the Assessee has claimed additional depreciation u/s 32(1)(iia) of the Act on Caterpillars and 240 Tonne Dumpers treating them as machineries. Items like Caterpillars or 240 tonne Dumpers have special tyre adopted for use in the enclosed premises of the mining areas only. Therefore, as per the provisions of the Motor Vehicles Act 1988, these items as described are not vehicles within the ambit of the Motor Vehicles Act 1988. The dumpers have specialised tyres called 'Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0659 (Mad HC)] Commissioner of Income Tax Vs. Sibson Construction Co. [(1997) 90 Taxman 0175 (Gauhati HC)] Agrawal Flooring Stone Co v CIT [1995] 216 ITR 757 (Raj); and ITO v. Ghuge CO (1993) [47 TTJ 33 (Pune)] 9.12 On the other hand, ld. CIT-DR relied on the orders of the authorities below. 9.13 We have considered the rival submissions, perused the relevant material available on record and case laws relied upon by the assessee. The issue to be decided on the merits is that whether the additional depreciation u/s. 32(1)(iia) is allowable on caterpillers and 240 Dumpers treating them as machineries. To under the applicability of Section 32(1)(iia) of the Act, the provision of the said section from the Act is extracted as under: In the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March 2005, by an assessee engaged in the of manufacture or production of any article or thing for in the business of generation or generation and distribution of power], a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that no deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the mine owners who used dumpers within their mining premises to the effect that the dumpers are vehicles not adapted for use upon roads and, therefore, are outside the Scope of the Taxation Act and held that these dumpers run on tyres, in marked contrast to chain plates like caterpillars or military tanks. It was also held that by the use of rubber tyres it is evident that they have been adapted for use on roads, which means they are suitable for being used on public roads and on the mere fact that they are required at places to run at a particular speed is not to detract from the position otherwise clear that they are adapted for use on roads. The very nature of these vehicles make it clear that they are not manufactured or adapted for use only in factories or enclosed premises. The mere fact that the dumpers or rockers as suggested are heavy and cannot move on the roads without damaging them is not to say that they are not suitable for use on roads. The word 'adapted' in the provision was read as 'suitable' in Bolani Ores Case by interpretation on the strength of the language in Entry 57 List II of the Constitution. On the fact situation, therefore, it must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of Hon ble Mumbai High Court Western Coalfields Ltd. (supra) based on the principle of law guided by the Hon ble Apex Court in the case of Baloni Ors Ltd. (supra) is squarely applicable in the facts and circumstances of the present case. We, thus, hold that the disallowance on account of additional depreciation made by the Ld. AO and confirmed by the Ld. CIT(Appeals) is on right footing and thus, sustained. In the result, Grounds No. 2(a) (b) (c) are dismissed in terms of our aforesaid observations. 9.16 With regard to request of the assessee qua the consequential depreciation by effecting the requisite changes in WDV in the block of assets when the Dumpers are held as ineligible for additional depreciation, in the interest of substantial justice revenue is duty bound to grant the assessee consequential relief of normal depreciation by computing the closing WDV of the block of assets removing the effect of additional depreciation from the relevant assessment year. 9.17 In the result, appeal of the assessee in ITA No. 162/BIL/2017 (AY:2010-2011) is dismissed in terms of our aforesaid observations. ITA No. 115/BIL/2015 (AY : 2011-2012) (Assessee s Appeal) 10.1 Though the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground has not been pressed by the ld. AR, as has been noted in the chart provided before us during the course of hearing. Therefore, we dismiss this ground as not pressed. Ground No. 2: Disallowance of Land Compensation Rehabilitation Expenses. 10.5 This issue of disallowance of Land Compensation Rehabilitation Expenses has already been decided by us in favour of the revenue while considering the appeal of the assessee in Ground No. 1 for A.Y. 2009-2010 in ITA No. 201/BIL/2012, wherein we have dismissed the ground of assessee following the reasonings given by the earlier orders of the coordinate bench of the Tribunal. Respectfully following the same, we uphold the findings of the ld. CIT(A) and dismiss this ground of assessee. Ground No. 3 : Disallowance of expenditure on accumulated liquidated damages penalty. 10.6 This issue of disallowance of expenditure on accumulated liquidated damages penalty has already been decided by us while considering the appeal of the assessee in Ground No. 10 for A.Y. 2010- 2011 in ITA No. 401/BIL/2014, wherein we have set aside this ground of assessee following the reasonings and observations given by us. Respectfully following the same, we allow t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the holding company, Coal India Limited. For AY 2011-12 to 2014-15, the Escrow A/c could not be created due to absence of the notification of the procedural modalities, and hence, the corresponding provision, though created, could not be deposited into the Escrow Account during the respective years. The communication in this regard was issued by Coal India Limited on 26 June 2013 (photocopy enclosed as Attachment I1) and the Escrow account was during Nov 2014, after obtaining necessary internal board and other approvals (obtaining quotes from banks, signing formalities, etc.). The funds pertaining to these years (i.e. AY 2011-12 to 2014-15) along with the amount provisioned for AY 2015-16 was credited to the Escrow A/c in FY 2014-15 (i.e. AY 2015-16). The claim of deduction made in AY 2015-16 was specific to the amount set-aside for the AY 2015-16. For the subsequent years (i.e. AY 2016-17 to AY 2017-18), the company has deposited the amount of the provision created in the respective years into the Escrow account. However, the Learned AO without appreciating that the basis of the disallowance is absence of the Escrow account, has continued with the disallowances even after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirement, the Assessee has ownership and control over the funds so created. C. Decision of the CIT(A) and its basis (page numbers of the appellate orders of the respective years are as in the above table) On appeal, the learned CIT(A) held that a provision is a liability which can be measured only by using a substantial degree of estimation. It is recognised when an enterprise has a present obligation as a result of the past event, it is probable that an outflow can be made on amount of the obligation. If these conditions are not met, no provision can be recognized by relying on the decision in the case of Rotork Controls India Pvt Ltd [(2009) 314 ITR 62], Accordingly, he confirmed the disallowance as according to him, this was unascertained liability. D. Assessee s arguments before the Hon ble Tribunal The learned AO has disallowed the provision mainly on aground that assesses company during the year did not open the Escrow account and therefore, control over provided money was with the assessee. Secondly, the learned CIT(A) held that the liability was not ascertainable. The learned AO failed to appreciate that reason for not opening the Escrow account was of the absence of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears and upholds that the claim for these years should be disallowed in absence of the amount credited to the Escrow A/c, the Assessee humbly prays that a direction be given the corresponding deduction be granted, in the year in which such amount was deposited to the Escrow A/c. E. Case laws relied on Udaipur Mineral Development Syndicate Pvt. Ltd v. DCIT [261 ITR 706] M/s Manganese Ore (I) Ltd [(2013) ITA No 123/Nag/2012] - copy placed as Attachment I2 Hon'ble Bombay High Court in M/s Manganese Ore (I) Ltd (PB Page 228-229, PB of AY 2012-13- ITA 102/RPR/2017) CIT v. Gogte Minerals [(1996) 220 ITR 29] PCIT vs Rajasthan States Mines and Minerals Ltd [ITA 151/2016] (Para 5) - copy placed as Attachment I3 PCIT vs Rajasthan States Mines and Minerals Ltd [ITA 39/2019] - copy placed as Attachment I4 Barmer Lignite Mining Co v DCIT [ITA No 510/JP/2017 dated 12.10.2017] (Para 15) - copy placed as Attachment I5 Rajasthan States Mines and Minerals Ltd v ACIT [ITA no 144/JP/2014 124/JP/2014 dated 12.02.2016] (Para 29- 30.3 to 30.5) - copy placed as Attachment I6 Mahanadi Coal Fields Ltd v DOT, [ITA 397 and 421/Ctk/2013 dated 20.03.2018] (Para 130-131, Page 56).. - copy placed as Attachmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the opinion that matter may be restored to the file of AO to verify and examine as to whether the expenditure incurred during the year under consideration. It is also not clear as to whether the amount has been credited to escrow account or not. Therefore, we restore this issue to the file of AO to grant corresponding deduction in the year in which such amount was actually incurred by depositing the same to the escrow account. This issue is allowed for statistical purposes. Ground No. 5 : disallowance on account of actuarial valuation of employee compensation 10.10 This issue of disallowance on account of actuarial valuation of employee compensation has already been decided by us while considering the appeal of the assessee in Ground No. 2 for A.Y. 2010-2011 in ITA No. 401/BIL/2014, wherein we have set aside this issue following the reasonings and observations given by us. Respectfully following the same, we allow this ground of appeal for statistical purposes. Ground No. 6 : Non grant of TDS credit due to income mismatch 10.11 The ld. AR of the assessee with regard to the above ground submitted as under :- The Assessee would like to humbly submit that the credit of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on: Kartik Vijaysinh Sonavano v DCIT [(2021) 132 taxmann.com 293 (Gujarat)] ACIT v Om Prakash Gattani [(2001) 117 Taxman 549 (Gauhati)] Yashpal Sahni v Rekha Hajarnavis [(2007) 165 TAXMAN 144 (Bom)] ACIT v Peddu Srinivasa Rao, [ITA 324/Vizag/2009 dated 03.03.2011] (para 8 to 10) Vijay Bhavani Constructions Pvt Ltd v DCIT [(2017) 9 ITR (Trib) 99 (Hyd)] (para 9 to 12.1) Sadbhav Engineering Ltd v DCIT, [ITA no 610, 1834, 1835, 2053, 2054 and 2055/Ahd/2009 dated 19.12.2013] (para 23 to 26) Greatship (India) Ltd v DCIT, [ITA 5562/Mum/2018 dated 08.01.2020] (para 6 and 7) Supreme Renewable Energy Ltd v ITO [(2010) 3 ITR (Trib) 339 (Chennai)] (para 6 to 10) AO cannot recover taxes from assessee, if deductor does not deposit taxes. - Ashok Kumar Chowatia v JCIT [(2021) 128 taxmann.com 230 (Mad)] Without prejudice to the above, if the above ground is held against the Assessee, then. Learned AO may be directed to grant TDS credit in a year in which corresponding income is declared. E. Case laws relied on Kartik Vijaysinh Sonavane v DCIT [(2021) 132 taxmann.com 293 (Gujarat)], copy placed as Attachment Q1 ACIT v Om Prakash Gattani [(2001) 117 Taxman 549 (Gauhati)], copy placed as Attachment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to substantiate its claim that the corresponding income has been offered to tax. In view of the above, we uphold the findings accorded by both authorities below, in this regard. However, we direct the AO to grant TDS credit in the year in which corresponding income is declared by the assessee. Thus, this issue is partly allowed for statistical purposes. Ground No. 7 : Part: disallowance of provision for leave encashment 10.14 This ground relates to provision for leave encashment. This issue has already been considered by us while deciding the appeal of the assessee in Ground No. 5 for A.Y. 2009-2010 in ITA No. 201/BIL/2012, wherein considering the prayer of the assessee and in view of the judgment of the Hon ble Supreme Court in the case of Exide Industries Limited (supra), we remit the issue to the file of AO to verify and examine as to whether the payment towards leave encashment have been made to the employee in the year of actual payment of leave encashment. If the same has been paid before the due date of filing of the return for the relevant assessment year, then the expenditure is allowable and to such extent, if the payment has been made after the due date of filing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the AY 2011-12, the Learned Aa has made an addition of Rs. 21,12,000 on account of interest W.r.t. disputed deposits of coal customers, which consists of the disallowance of reversal of interest made by the Assessee of Rs. 11,37,248, which was declared as its income in the earlier years and reversed during the impugned year under the head prior period and addition of Rs. 9,75,024 pertaining to interest accrued in the current year but was not offered to tax by the Assessee. Thus, the learned Aa made the total addition of Rs. 11,37,248 and of Rs. 9,75,025 totalling Rs. 21,12,000. The assessee had received deposits from certain purchasers against coal purchased by them from it. Subsequently, the assessee stopped selling coal to them and retained part of their deposits with it after the assessee learnt that these purchasers had used fake papers for making purchases for their non- existent brick kilns. Aggrieved by stoppage of sale of coal to them, Shri Basant Jain and Shir Subhash Gupta - middlemen - approached Hon'ble MP high court for getting refund of their balance deposits. Hon'ble High Court directed the assessee to deposit money with Collector, Shahdol directing him to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2005 on behalf of the State Government of MP. Taxes collected by the assessee company could not be handed over to the MP Government because some of the customers challenged the constitutional validity of the Act in the Court. Subsequently, the assessee company invested the collected tax amount in Corporate Liquid Term Deposits. The assessee earned total interest of Rs 20,94,71,000 over the years, which it duly declared every year as its income in its return of income and paid tax on it. The case between M/s Jai Prakash Associates Ltd v State of M P went up to the Hon'ble Supreme Court, in which the said company had contested constitutional validity of such levy of Rural Infrastructure and Road Development Tax by the state of MP. The case filed before the Hon'ble Supreme Court of India was tagged with the case of M/s Jai Prakash Associate Ltd vide No 2055/2007 and was disposed of by a common interim order dated 02.08.2010. It was observed that the Hon'ble Supreme Court in its interim order dated 02.08.10 had directed, each of the assessee-company(s) to file its respective returns under 2005 Act in respect of each year . (Page 207 of PB for ITA 115/RPR/2015) As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est income to the Profit and Loss statement and have booked corresponding liability by debiting the Profit and Loss statement. D. AO's reasons for making disallowance or addition (para numbers of the assessment orders of the respective years are as in the above table) The learned AO stated that the assessee did not enclose the copy of the opinion given by the Solicitor General of India along with its reply submitted to the learned AO. He stated that in his opinion, the ASG has clearly stated that the Agents are not entitled to claim interest on balance deposits lying with the assessee company. Accordingly, the learned AO has made the addition of Rs 21,12,000, which consisted of the disallowance of reversal of interest made by the assessee of Rs 11,37,248 declared in earlier years as its income under the year prior period and made the addition of Rs 9,75,024 accrued in the current year but was not offered to tax. W.r.t, MPGATSVA, the Learned AO stated that, it is seen on perusal of Audit Query that the CAG has nowhere advised to reverse interest income, which was offered to tax in earlier years. Neither did it suggest that accrued interest of Rs 13,77,00,000 should not be routed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's arguments before the Hon'ble Tribunal The Assessee's arguments consist in following parts: Whether interest income earned from FDs made out of money not belonging to the assessee, can constitute its income? TDS credit claimed by the assessee on interest income declared in the years prior to AY 2011-12 and consequences on reversal of interest TDS credit claimed by the assessee in the years subsequent to the AY 2011-12 but corresponding income not declared to tax Whether interest income earned from FDs made out of money not belonging to the assessee, can constitute its income? W.r.t interest on disputed deposits of coal customers, the assessee company is holding deposits of third parties as trustee. Interest income earned on such deposits can never be considered as its own money. If the assessee is not the owner of the money in the deposits, then interest earned thereon also is its liability. W.r.t. interest on deposits of MPGATSVA and terminal tax, the learned AO and Learned CIT(A) both have not adjudicated the fundamental question as to whether the deposits or interest thereon constitutes the assessee's income or its liability? Their decisions pre-supposes th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is well-settled. Further, in the case of PCIT v New World Synthetics Ltd [(2018) 97 Taxmann.com 399 (Delhi)] held that non-payment of outstanding liability which is admitted and acknowledged as due and payable by an assessee does not indicate remission or cessation of liability. The assessee company acknowledges its debt towards purchasers of coal and towards the Government for the taxes collected on its behalf. Therefore, debt exists in the eyes of law. The creditors have not granted remission w.r.t. interest liability on disputed deposits of coal customers. Similarly, the government has not granted remission on interest liability w.r.t. disputed deposits of MPGATSVA and Terminal Tax. As held by the Honourable Apex court that creditor can initiate a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in the Limitation Act. Therefore, interest income on deposits of third party cannot constitute the assessee's Income. Accordingly, the addition made by the learned AO may be deleted. TDS credit claimed by the assessee on interest income declared in the years prior to AY 2011-12 and consequences on reversal of interest TDS credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his return, the IT Department cannot refuse to give credit merely by contending that the income had not been disclosed in the return filed by the assessee for the assessment year. The assessee may as per relevant provisions of IT Act, consider the income either as not taxable in his hands or as being relatable to a different assessment year and he may even claim set off of loss or other deductions against such income. The assessee may also be not chargeable to tax on the income because of the overriding provisions of Double Taxation Avoidance Agreement and/or because of the provision for exemption of such income, whether wholly or partly, under some provisions of the IT Act. It would be, therefore, improper and even impermissible for the Revenue to swallow the amount of TDS after having received and enjoyed the same. It cannot be ignored that every item of TDS carries with it an obligation of trust and accountability to return the amount and/or give credit for the amount so deducted depending upon the tax liability of the recipient to be determined in the course of his assessment. Assessee's income for which tax is deducted at source should not be refused to be given credit. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the transactions with the NHAI were of the same amount as that of transactions with the Sub-Contractor, the balance in the above said ledger account was 'Nil'. On account of back-to-back arrangement and there was no profit accruing to the Assessee. With this background, after considering the amended section 199 of the Act, as well as amended Rule 37BA, the Hon'ble Tribunal directed the AO to allow the TDS credit, even though the corresponding receipts were not offered to tax. Similar decisions are also rendered by the Hon'ble IT AT in the following cases: Vijay Bhavani Constructions Pvt Ltd v DCIT [(2017) 9 ITR (Trib) 99 (Hyd)] (para 9 to 12.1) (credit not granted on TDS made on mobilisation advance- follows Peddu Srinivasa Rao) Sadbhav Engineering Ltd v DCIT, [ITA no 610,1834,1835,2053,2054 and 2055/Ahd/2009 dated 19.12.2013] (para 23 to 26) credit not granted on TDS made on mobilisation advance- follows Peddu Srinivasa Rao) Toyo Engg India Ltd v JCIT [(2006) 100 TT J 373 (Mum)] (TDS credit claimed but Income declared in subsequent year as per project completion method) Accordingly, it is prayed that the company may be allowed to continue availing the TDS credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The interest accrued during the current year for Rs. 9,75,024/- was also not offered to tax by the assessee. Both these figures in aggregate were added back to the income of the assessee by the Ld. A.O for the reason that the TDS credit corresponding to the said interest income was claimed by the assessee. The reason for such reversal of income explained by the Ld. AR was that the assessee company had received certain deposits from the purchaser of coal subsequently when the assessee company has learnt that those purchasers had used fake papers for making such purchases, therefore, the transaction with such purchasers were stopped. Aggrieved by this stoppage of sale of coal Shri Basant Jain and Shri Subhas Gupta, the middleman approached Hon ble MP High Court for getting refund of their balance deposits. As an outcome of the said case before the Hon ble M.P High Court the assessee was directed to deposit money with Collector Shahdol directing him to return the money to original depositors. Against the said decision SLP is filed before the Hon ble Apex Court by the complainants, wherein vide order dated 25.11.2017, Hon ble Apex Court had directed the assessee to return deposit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m to act as the del credere agents:, The Court accepted the stand of the petitioners (Querist) and directed that the amount of deposit be disbursed amongst the brick kiln owners and for this purpose appointed a two-member committee consisting of the General Manager, District Industries Centre, Sheopuri and the District Collector-cum-District Magistrate, Sheopuri. That committee reported back to the Hon ble Supreme Court that ...none of these 21 applicants have deposited any money with the petitioner. The Committee, in its report has given particulars of the statements made by each of the applicants and their willingness or unwillingness for accepting the money which was admittedly not theirs, All of them have stated that the money was not deposited by them with the petitioner. The Committee, in the light of the statements made by the 1 applicants, has come to the conclusion that It Is not possible to distribute the money to these 21 persons as they have not deposited any money with the petitioner. The Committee has therefore prayed for further directions. The Hon'ble Court finally concluded ....Since it is now found that none of these 21 applicants is entitled to the money, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicants have filed. their Individual affidavits in this Court stating In categorical terms that the amounts were paid by the two respondents and that they had no objections to the amounts being refunded to the respondents who were their gel erecters agents, the amount should no longer be paid to the 21 applicants individually. He further stated that if now the payments are made individually to 21 applicants, they may change their mind and money would be lost to the respondents. Since the fear was expressed by the counsel for the petitioners with regard to the Identity of the 21 applicants and also with regard to the validity of the discharge to be given by them, the learned, counsel for the respondents suggested that those 21 applicants should be called to this Court at the cost of the petitioner. They could be identified before such officer of the Court as the Court may name, and upon their identification, and acceptance of the fact that they had flied the relevant affidavits, the money should be paid to the respondents. He also submitted that since the petitioner had the money in their possession ever since 30th March/2nd April, 1991, the petitioner should be asked to pay inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Querist must, before actually releasing the amount of deposit, secure bonds of indemnity from them against any possible claims, which be put forward by brick-kiln owners for refund in their favour for an amount of deposit. It is only after the necessary indemnity bonds have been secured from them that the amount of deposit may be released in their favour, subject of course, to their evidence that this amount was actually deposited by them. I opine accordingly and have nothing further to add. Sd/- (Altaf Ahmed) Additional Solicitor General of India 24 October, 2002 New Delhi 10.19 According to the aforesaid opinion of the Addl. Solicitor General of India, as interpreted by the assessee, the interest income offered to tax till A.Y. 2011-12 has been reversed, taking into consideration that the interest income earned on deposit of third parties cannot constitute its income. On perusal of the order of Ld. CIT(A), it was the observation of the Ld. CIT(A) that the assessee had right to receive interest that has arisen out of such deposits during the year under consideration and there is no such evidence on record to conclusively prove that such a right is not present and therefore, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case, the right and fair approach would be that, the assessee company have to set apart such receipt of or accrual of interest income as the same pertains to third parties and also preserve an amount equivalent to TDS on such interest being the tax on income of the third parties which have utilized by the assessee company, under a separate reserve fund on behalf of such third parties. 10.21 Another contention raised by the Ld. AR in context to the interest earned on disputed deposits of third parties was that, the interest on disputed deposit of coal customer are hold by the assessee company as trustee of those third parties, therefore, interest income earned on such deposits can never be considered as its own money/income. If the assessee is not owner of the money of the deposits, then interest earned thereon also is its liability. The contention of the Ld.AR that the deposits and interest are liability of the assessee company and therefore the same are hold as trustee of those third parties. In such a situation, if the interest income are not taxed in the hands of recipient i.e. the assessee company or in the hands of the owner of such funds, who are not identifiable at pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of clause (iv), to be a trust declared by a duly executed instrument in writing if a statement in writing, signed by the trustee or trustees, setting out the purpose or purposes of the trust, particulars as to the trustee or trustees, the beneficiary or beneficiaries and the trust property, is forwarded to the Assessing Officer, (i) where the trust has been declared before the 1st day of June, 1981, within a period of three months from that day; and (ii) in any other case, within three months from the date of declaration of the trust. Explanation 2. For the purposes of clause (v), oral trust means a trust which is not declared by a duly executed instrument in writing [including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913),] and which is not deemed under Explanation 1 to be a trust declared by a duly executed instrument in writing. (2) Every representative assessee shall be deemed to be an assessee for the purposes of this Act. Liability of representative assessee. 161. (1) Every representative assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal settlement of the liability, and the certificate so obtained shall be his warrant for retaining that amount. (3) The amount recoverable from such representative assessee or person at the time of final settlement shall not exceed the amount specified in such certificate, except to the extent to which such representative assessee or person may at such time have in his hands additional assets of the principal. 10.23 In view of aforesaid discussions and deliberations, the issues pertaining to interest on disputed deposits on behalf of third parties which are considered as liability by the assessee company, since the same belongs to deposits of third parties under trust. Accordingly, the assessment of such income should be completed treating the assessee company as representative assessee as deliberated in the foregoing discussions. The issue, therefore, is restored back to the file of Ld. AO for fresh adjudication after examining and verifying the facts of the issue. Needless to say, the assessee shall be given sufficient opportunity of hearing. Thus, ground Nos.7 (part) 8 are partly allowed for statistical purposes. 10.24 Our decision rendered in case of interest on disputed depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee for A.Y. 2009-2010, we also restored this issue to the file of AO for determining the allowability of expenses as claimed by the assessee for the year under consideration. Ground No. 12 13 : short grant of TDS/TCS credit without any explanation and levy of interest u/s. 234B, 234C 234D 10.28 The next issues are with regard to short grant of TDS/TCS credit without any explanation and levy of interest u/s. 234B, 234C 234D of the Act are consequential, which do not need separate adjudication. 10.29 Thus, the appeal of the assessee in ITA No. 115/BIL/2015 for A.Y. 2011-2012 is partly allowed for statistical purposes. ITA No. 103/BIL/2015 (AY : 2011-2012) (Department s Appeal) 11.1 On perusal of the grounds of appeal in ITA No. 103/BIL/2015 (AY : 2011-2012) filed by the department, it is found that the following effective grounds raised by the department were similar to the grounds raised by the department in the assessee s case for the earlier years, therefore, instead of deciding those issues again we are furnishing hereunder a table showing grounds of present appeal covered by our decision in the grounds of appeals already decided in terms of our observations herei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customers; 7 8 of ITA No. 115/BIL/2015 A.Y. 2011-12 4. Disallowance u/s. 14A read with rule 8D; Adjudicated in the ensuing paras of this order 5. Disallowance on account of actuarial valuation of employee compensation; 2 of ITA No. 401/BIL/2014 for A.Y. 2010-11 6. Disallowance u/s. 40(a)(ia) of the Act; 7 of ITA No. 401/BIL/2014 for A.Y. 2010-11 7. Disallowance of land compensation rehabilitation expenses; 1 of ITA No. 201/BIL/2012 for A.Y. 2009-10 7A. (additional ground) Amortization of land rehabilitation expenses. 1E of ITA No. 201/BIL/2012 for A.Y. 2009-10 8. Disallowance on accumulated liquidated damages penalty; 10 of ITA No. 401/BIL/2014 for A.Y. 2010-11 9. Disallowance of provision made for mine closure; 4 of ITA No. 115/BIL/2015 A.Y. 2011-12 10. Disallowance of prior period expenses 5 of ITA No. 401/BIL/2014 for A.Y. 2010-11 11. Disallowance of claim for OBR adjustment; 9 of ITA No. 204/BIL/2012 for A.Y. 2009-10 12. Disallowance of depreciation on Appollo Hospital Building; 3 of ITA No. 401/BIL/2014 for A.Y. 2010-11 13. Interest liability of BG encashment (LANMCO); This ground is dismissed as not pressed 14. Addition on account of short credit of interest income w.r.t.disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order of all the years. In the second last para of the reproduced submission, the assessee explained that it has not incurred any expenditure towards making investments in mutual funds because it has made investment of surplus funds on short-term basis. The correctness of the assessee s contention of short-term investments, by comparing year-end investment value in mutual funds as mentioned in row 7 with dividend earned in row 9 in the table above. It is obvious that dividend earning of Rs. 34.92 cr out of investment of Rs. 60 cr in AY 2013-14 and of Rs 47.13 cr out of investment of Rs 55.05 cr is disproportionality high whereas dividend earning of Rs 9.51 cr from investment of Rs 600 cr in AY 2012-13 is disproportionately low. It is clear from these amounts of income and year-end investments that the assessee company is earning dividend income from making investments on short term basis. The learned AO without examining the assessee s explanation, has not agreed with the assessee and has invoked Rule 8D. The learned AO has invoked Rule 8D without recording satisfaction merely by making general observations and without examining correctness of its accounts and the facts in lig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 449 (SC)] (para 38) - copy placed as Attachment S9 CIT v HDFC Bank Ltd [(2014) 366 ITR 505 (Bom)] - copy placed as Attachment S10 E. Case laws relied on PCIT v TV Today Network Ltd (2022) 141 taxmann.com 275 (Delhi), - copy placed as Attachment S1 Kesoram Industries Ltd v PCIT (2022) 441 ITR 642 (Cal), - copy placed as Attachment S2 PCIT v Bajaj Finance Ltd (2019) 110 taxmann.com 303 (Bombay), - copy placed as Attachment S3 PCIT v Hindusthan Aeronautics Ltd (2022) 143 taxmann.com 357 (Karnataka), - copy placed as Attachment S4 CIT v Sociedade De Fomento Industrial (P) Ltd (2020) 429 ITR 358 (Bombay), - copy placed as Attachment S5 H T Media Ltd v PCIT (2017) 399 ITR 576 (Delhi), - copy placed as Attachment S6 CIT v Gujarat Apollo Industries Ltd (2015) 55 taxmann.com 158 (Gujarat), - copy placed as Attachment S7 Maxopp Investment Ltd v CIT (2018) 402 ITR 640 (SC) (para 41 ), - copy placed as Attachment S8 Godrej Boyce Manufacturing Co Ltd v DCIT (2017) 394 ITR 449 (SC) (para 38), - copy placed as Attachment S9 CIT v HDFC Bank Ltd (2014) 366 ITR 505 (Bom), - copy placed as Attachment S10 F. Paper Book references AY 2013-14 ITA 102/RPR/2017 (Assessee s appeal) Page 19 Balance shee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment Ltd. given by the Hon ble Delhi High Court in 2011, has no occasion to refer to the judgment of the Hon ble Apex Court on the issue which was decided by various courts till 2015, similar was the position of Ld. CIT(A), who had decided the issue on 24.10.2016. Also, the aspect like the investment was made out of sufficient interest free funds available with the assessee, which is the contention of the assessee before us has been assailed before the revenue authorities or not, is not evident from the orders of the revenue authorities. Under such facts and circumstances, whether the disallowance u/s. 14A r.w.r. 8D made by the Ld. AO will survive or not is dependent on verification of facts from the financials of the assessee and also, depends upon the judgment of Hon ble Apex Court wherein the provisions of Section 14A r.w.r. 8D and their applicability has been interpreted. In the backdrop of such facts and circumstances of the case we are of the considered opinion that this issue should be restored back to the file of the A.O for adjudicating the same afresh in light of the various binding judicial pronouncements by the Hon ble Courts, applying the provisions of extant law. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and documents relating to actual amount of purchase of computer software. This issue is partly allowed for statistical purposes. 12.7 Thus, the appeal of the assessee for A.Y. 2012-2013 in ITA No. 102/BIL/2017 is partly allowed for statistical purposes. ITA No. 98/BIL/2017 (Department s appeal)(AY: 2012-2013) 13.1 On perusal of the grounds of appeal in ITA No. 98/BIL/2017 (AY : 2012-2013) filed by the department, it is found that the following effective grounds raised were similar to the grounds raised by assessee/revenue in the assessee s case for the earlier years, therefore, instead of deciding those issues again we are furnishing hereunder a table showing grounds of present appeal covered by our decision in the respective grounds of appeals already decided in terms of our observations hereinabove. Accordingly, our decision rendered in the foregoing paras of this order under respective grounds of the appeal No. referred in the table below will mutatis mutandis applicable and accordingly, are disposed off. Ground No of ITA No. 98/BIL/2017 Grounds of appeal Covered by corresponding grounds of ITA Remarks 1. Disallowance of expenditure under the head grants to schools and instit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 401/BIL/2014 A.Y. 2010-11 7. Disallowance of provision made for mine closure 4 of ITA No. 115/BIL/2015 A.Y. 2011-12 8. Disallowance of claim for OBR adjustment; 9 of ITA No. 204/BIL/2012 A.Y. 2009-10 9. Disallowance of depreciation on Appollo Hospital Building; 3 of ITA No. 401/BIL/2014 A.Y. 2010-11 10. Disallowance of land crop compensation N.A Adjudicated in the ensuing paras of this Order 11. Disallowance of expenditure on assets not belonging to company (roads. Etc.); 3 of ITA No. 201/BIL/2012 for A.Y. 2009-10 12. Addition made on account of short credit of interest income w.r.t. disputed deposits 7 8 of ITA No. 115/BIL/2015 A.Y. 2011-12 13. Disallowance of coal transportation expenses paid to ESM companies; 4 of ITA No. 201/BIL/2012 for A.Y. 2009-10 14. Disallowance of Write off/Depreciation of Railway Siding leased out to Aryan Coal Beneficiation (ACB) Adjudicated in the ensuing paras of this order 15. Levy of interest u/s. 234B, 234C and 234D of the Act. 12 of ITA No. 401/BIL/2014 A.Y. 2010-11 Ground No. 10 : disallowance of land crop compensation. 14.2 It was submitted by the ld. AR that heavy blasting conducted in the coal mines by the assessee to loose coal and rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the order of the ld. CIT(A), wherein the ld CIT(A) has upheld disallowance made by the AO under the head land crop compensation relying on the order of the ITAT Nagpur Bench of the Tribunal in ITA No. 18-22/Nag/2001, which according to the assessee was not on the similar facts and thus, nowhere covers the issue with respect to the expenses paid for land crop compensation incurred by the assessee. The order passed by the ITAT Nagpur Bench of the Tribunal is dated 28.02.2002. However, subsequently in ITA No. 475/Nag/2007, vide order dated 10.08.2009 in the case of assessee s sister concern has deleted the disallowance/addition made under the head crop compensation. Since the expenditure incurred and disallowed on account of land crop compensation is on the basis of facts and was dealt with by the Nagpur Tribunal in assessee s own case and in the case of M/s. Western Coalfields Ltd. (supra) i.e. sister concern of the assessee in different manner, which suggests that the facts under these two appeals were on different footings and therefore, the facts in the present case needs to be examined whether those are similar with the nature and facts similar to which one of these two ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lump sum payment which. In our opinion. Is not a correct criteria to decide the nature of a payment, Tho assesses has placed reliance on various Judicial decisions on this aspect, however, we do not consider It necessary to deal with them In a specific manner as this proposition Is a settled one. Another objection of the - Revenue authorities Is that the assessee has capitalized this payment In the past and has also claimed the same as of capital nature even in the return of Income, hence, principles of consistency was to be applied. In this regard, first of all,-the assesses has submitted that the Impugned expenditure was Incurred and paid-only when the land mines so acquired have become revenue mines. In this regard, we have also perused the remand report of the A.O, wherein et one place the A.O. has Stated that the assessee did not produce documentary evidence to show that-such expenditure was connected with, revenue mines and in the very next Jine, he has stated that even though these conditions were fulfilled but the approval of the Board of Directors was not there. Both these findings are self-contradictory and rather show a state of uncertainty In the mind of the A.O. which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Electricity Board (SEB) and other customers. SEBs are customers of SECL as well as of Aryan Coal Beneficiation. Aryan Coal Beneficiation provides coal washing services to the SEBs and other customers before assessee company despatches coal by loading it in railway. Thus, the assessee company has leased its asset in course of its business of Mining to facilitate sales by providing value added service, which ACB provides to SEBs as an independent of the assessee company. Railway siding are used by the assessee company to load coal into wagons for despatching coal to different customers. The Railways siding leased to ACB is one the sidings owned by the assessee company. Thus, railway siding is assessee s commercial asset. It was also submitted by the ld. AR that railway siding is assessee company s commercial asset therefore income earned from commercial asset is assessed as income from business, with the result, depreciation should be allowed. Ld. AR also placed following case laws to support his contentions :- Reliance is placed on the following decisions: Universal Plast Ltd v CIT [(1999) 237 ITR 454 (SC)], copy placed as Attachment M1 CEPT v Shri Lakshmi Silk Mills Ltd [(1951) 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the disallowance made by the AO in not accepting the claim of the assessee for depreciation of railway siding leased out to M/s Aryan Coal Beneficiation (ACB). Thus, we dismiss this ground of assessee. 14.9 Thus, the appeal of the assessee for A.Y. 2013-2014 in ITA No. 103/BIL/2017 is partly allowed for statistical purposes. ITA No. 99/BIL/2017 (Department s Appeal for A.Y. 2013-2014) 15.1 On perusal of the grounds of appeal in ITA No. 99/BIL/2017 (AY : 2013-2014) filed by the department, it is found that the following effective grounds raised were similar to the grounds raised by assessee/revenue in the assessee s case for the earlier years, therefore, instead of deciding those issues again we are furnishing hereunder a table showing grounds of present appeal covered by our decision in the respective grounds of appeals already decided in terms of our observations hereinabove. Accordingly, our decision rendered in the foregoing paras of this order under respective grounds of the appeal No. referred in the table below will mutatis mutandis applicable and accordingly, are disposed off. The ground which were not covered by our aforesaid observations, are dealt with separately aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee had issued a communication to all its subsidiaries, mandating creation of such reserve and incurrence of such expenditure. Copy of such communication is placed in the paper book as Attachment K2. The AO disallowed the Sustainable expenses incurred by the Assessee on various contentions. On appeal, the Ld. CIT(A) passed the order in favour of the Assessee during AY 2013-14 by observing that the said expenditure is shown under the welfare expenses and the same had been allowed in earlier years in Assessee s own case. Therefore, the ld. AR submitted that the order of the ld. CIT(A) deserves to be upheld. 15.4 We have considered the rival submissions, perused the material evidence carefully. On perusal of the order of the ld. CIT(A) we found that the ld. CIT(A) has allowed the claim of the assessee after having the following observations :- Decision Since the welfare expenses are included as environmental expenses, sustainable development expenses and tree plantation, the issue is in the nature of earlier issues on social welfare and tree plantation expenses which had been under litigation for earlier years and my predecessor had been allowing in all assessment years. Respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A Remarks 1. General ground Separate adjudication not required. 2. Addition made on account of short credit of interest income w.r.t. disputed deposits from coal customers; 7 8 of ITA No. 115/BIL/2015 A.Y. 2011-12 3. Disallowance u/s. 14A read with rule 8D; 4 of ITA No. 102/BIL/2017 A.Y. 2012-13 4. Disallowance on account of actuarial valuation of employee compensation; 2 of ITA No. 401/BIL/2014 for A.Y. 2010-11 5. Disallowance of land compensation rehabilitation expenses; 1 of ITA No. 201/BIL/2012 A.Y. 2009-10 5A. Amortization of land rehabilitation expenses. 1E of ITA No. 201/BIL/2012 A.Y. 2009-10 6. Disallowance on accumulated liquidated damages penalty; 10 of ITA No. 401/BIL/2014 for A.Y. 2010-11 7. Disallowance of provision made for mine closure 4 of of ITA No. 115/BIL/2015 A.Y. 2011-12 8. Disallowance of claim for OBR adjustment; 9 of ITA No. 204/BIL/2012 A.Y. 2009-10 9. Disallowance of depreciation on Appollo Hospital Building; 3 of ITA No. 401/BIL/2014 for A.Y. 2010-11 10. Disallowance of sustainable development as Cap. Expenditure. 8 10 of ITA No. 99/BIL/2017 A.Y. 2013-14 11. Disallowance of expenditure on assets not belonging to company (roads. Etc.); 3 of ITA No. 201/BIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it was bound to comply with the Governmental orders. So much so, the parameters applicable to the case of a private company, that too with respect to the claim for business expenditure, are exactly not applicable to the case of a public sector company, whether it is under the control of the State Government or the Central Government. In fact, many public sector companies are not formed just to make profit alone, but are supposed to achieve larger objectives for the society and the State. Section 37(1) is the residuary provision provided under the Income-tax Act enabling the assessee engaged in business to claim all expenditure laid out or expended wholly and exclusively for the purposes of the business. By making payment of the service charges, the assessee-company had discharged only the obligation under the Governmental orders. It could not carry on business by violating the Government's Orders and remain as a defaulter to the Government. Therefore, on the face of it, payment of service charges to the Government was a business expenditure and it was paid every year and the payment are mandatory for carrying on the business. 16.3 Ld. CIT DR supported the order of authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee s case for the earlier years, therefore, instead of deciding those issues again we are furnishing hereunder a table showing grounds of present appeal covered by our decision in the respective grounds of appeals already decided in terms of our observations hereinabove. Accordingly, our decision rendered in the foregoing paras of this order under respective grounds of the appeal No. referred in the table below will mutatis mutandis applicable and accordingly, are disposed off. Ground No of ITA No. 188/RPR/2017 Grounds of appeal Covered by corresponding grounds of ITA Remarks 1. Disallowance of expenses on grants to schools and institutions. 4 of ITA No. 204/BIL/2012 A.Y. 2009-10 2. Disallowance of expenses on social overheads-fuel power; 3 of ITA No. 204/BIL/2012 A.Y. 2009-10 3 to 6. Disallowance of CSR Expenses; 5 of ITA No. 382/BIL/2014 A.Y. 2010-11 7 to 9 Disallowance of expenditure on planation of trees and disallowance of environmental expenses; 7 of ITA No. 204/BIL/2012 A.Y. 2009-10 10. Disallowance of Expenditure on assets not belonging to company (roads.) Etc. 3 of ITA No. 201/BIL/2012 A.Y. 2009-10 11. Disallowance of coal transportation expenses paid to ESM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 171/RPR/2018 (AY : 2015-2016) filed by the revenue further concise and submitted in form a chart, it is found that the following effective grounds raised were similar to the grounds raised by assessee/revenue in the assessee s case for the earlier years, therefore, instead of deciding those issues again we are furnishing hereunder a table showing grounds of present appeal covered by our decision in the respective grounds of appeals already decided in terms of our observations hereinabove. Accordingly, our decision rendered in the foregoing paras of this order under respective grounds of the appeal No. referred in the table below will mutatis mutandis applicable and accordingly, are disposed off. Ground No of ITA No. 171/RPR/2018 Grounds of appeal Covered by corresponding grounds of ITA Remarks 1. Disallowance of expenses on grants to schools and institutions. 4 of ITA No. 204/BIL/2012 A.Y. 2009-10 2. Disallowance of expenses on social overheads-fuel power; 3 of ITA No. 204/BIL/2012 A.Y. 2009-10 3 to 5 Disallowance of expenditure on planation of trees and disallowance of environmental expenses; 7 of ITA No. 204/BIL/2012 A.Y. 2009-10 6. Disallowance of land crop compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AY : 2016-2017) filed by the revenue further concise and submitted in form a chart, it is found that the following effective grounds raised were similar to the grounds raised by assessee/revenue in the assessee s case for the earlier years, therefore, instead of deciding those issues again we are furnishing hereunder a table showing grounds of present appeal covered by our decision in the respective grounds of appeals already decided in terms of our observations hereinabove. Accordingly, our decision rendered in the foregoing paras of this order under respective grounds of the appeal No. referred in the table below will mutatis mutandis applicable and accordingly, are disposed off. Ground No of ITA No. 54/RPR/2018 Grounds of appeal Covered by corresponding grounds of ITA Remarks 1. Disallowance of expenses on grants to schools and institutions. 4 of ITA No. 204/BIL/2012 A.Y. 2009-10 2. Disallowance of expenses on social overheads-fuel power; 3 of ITA No. 204/BIL/2012 A.Y. 2009-10 3 Disallowance of expenditure on planation of trees and disallowance of environmental expenses; 7 of ITA No. 204/BIL/2012 A.Y. 2009-10 4. Disallowance of land crop compensation 10 of ITA No. 103/BIL/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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