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TMI Blog1978 (9) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that such expenses were of capital nature. Being aggrieved thereby the assessee preferred an appeal. It was contended before the AAC that where coal was extracted by open-cast method in places where coal seam was near the surface, it was absolutely necessary to remove the overburden for reaching the coal seam. The expenditure incurred on such removal did not result in any enduring benefit as the process had to be repeated immediately in the neighbouring area. Such contentions were not controverted and the AAC accepted the same. From the order of the AAC, the revenue preferred an appeal to the Tribunal. The Tribunal confirmed the order of the AAC accepting, inter alia, the contention that the expenditure incurred for the removal of over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the cases are not altogether satisfying to some minds. It may seem strange that a purchase of a heap of tailings, as in the Golden Horse Shoe case [1933] 18 TC 280 (CA) should be regarded as a purchase of raw material or stock-in-trade, whereas the sums expended in acquiring a quantity of caliche or nitrates embedded in a quarry, as in the Alianza case[1904] 5 TC 60 (CA) should be a capital expense ; or again that, as I think is the result in the present case, the right to obtain or win gravel lying in the soil should be a capital expense ... In my view, when all the authorities are looked at, it is reasonably plain that an asset such as that acquired by the taxpayers in the present case must be regarded as a capital asset and not as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication in the facts and circumstances in this reference. He submitted that both the AAC and the Tribunal have found as a fact : (a) that removal of overburden was a necessary process involved in raising coal in open-cast or quarry mining, (b) that removal of overburden did not bring about an enduring benefit to the assessee. Such findings of fact not having been challenged the matter was concluded in favour of the assessee. Mr. Sengupta for the revenue contended in reply that there was no evidence on the basis of which the authorities could come to such findings and that such findings were based on mere contentions raised at the hearing. It appears to us that the decisions cited and which were not considered in Amalgamated Jambad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e neither in the nature of rent nor royalty but were payments for acquiring a capital asset of enduring benefit. In the instant case, the expenses incurred in removing the overburden were not for acquiring any right of property either on the land or on the product but were incurred in the course of winning coal from an open-cast mine. The question is whether this is a revenue expenditure or an expenditure capital in nature. It has been found as a fact that the expenditure has not brought about any enduring benefit to the assessee. The contentions of the assessee in this behalf before the AAC and the Tribunal were at no time controverted nor were sought to be denied on behalf of the revenue. The findings were based on the admitted statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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