DCIT, Hyderabad V. M/s National Mineral Development corporation Ltd, Hyderabad

ITA 1085/HYD/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53541 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C R PATI
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1085/HYD/2010 : ASSESSMENT YEAR 2006-07 DY. COMMISSIONER OF INCOME - TAX CIRCLE 16(1), HYDERABAD VS NATIONAL MINERAL DEVELOPMENT CORPORATION LTD., HYDERABAD (PAN AAACN 7325 A ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.R. PATI RESPONDENT BY : SHRI LAXMI NIWAS SHARMA O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2006-07 IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME- TAX(APPEALS). 2. GROUND OF APPEAL OF THE REVENUE ARE AS UNDER- (1) WHETHER CIT(A) IS CORRECT ON THE FACTS AND CIRCUMSTANCES THAT CONTRIBUTION TO MEDICAL COLLEGE OF RS.5 CRORE HAS TO BE TREATED AS REVENUE EXPENDITURE FOR THE PURPOSE OF BUSINESS. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED TH AT CONTRIBUTION TO MEDICAL COLLEGE SHOULD NOT BE TREATED AS REVENUE EX PENDITURE IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT THE DECI SION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING Y EAR, VIZ. ASSESSMENT YEAR 2005-06 AND FOR THE SUCCEEDING YEAR , VIZ. ASSESSMENT YEAR 2007-08 ARE NOT APPLICABLE TO THE C ASE OF THE ITA NO.1085/H/2010 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD. HYD 2 ASSESSEE FOR THE RELEVANT YEAR, VIZ. ASSESSMENT YEA R 2006-07, FOR THE REASON THAT DURING THE RELEVANT YEAR, THE CONTRIBUT ION WAS MADE BY THE ASSESSEE TO THE MEDICAL COLLEGE AND NOT TO THE MEDICAL HOSPITAL AS WAS THE CASE OF THE ASSESSEE FOR THE EARLIER AND SU BSEQUENT ASSESSMENT YEARS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE HAS OPPO SED THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTAT IVE. HE SUBMITTED THAT THE GROUND OF APPEAL OF THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE TRI BUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2005-06 AN D SUBSEQUENT ASSESSMENT YEAR 2007-08. HE SUBMITTED THAT THE ASS ESSEE HAS INCURRED EXPENDITURE OF RS.5 CRORES IN THE ASSESSME NT YEAR 2005-06 AS CONTRIBUTION FOR ESTABLISHMENT OF MEDICAL COLLEG E IN THE REMOTE AREA OF CHHATTISGARH AND DURING THE RELEVANT ASSESS MENT YEAR 2006- 07, FACTS ARE IDENTICAL AND THE ASSESSEE HAS CONTRI BUTED A SIMILAR AMOUNT OF RS. 5 CRORES TO THE ESTABLISHMENT OF A ME DICAL COLLEGE. HE RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND H AVE PERUSED THE ORDERS OF THE COORDINATE BENCH OF THE HYDERABAD TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASS ESSMENT YEAR 2005- 06 IN ITA NO.1791/HYD/2008 DATED 30 TH SEPTEMBER, 2009 AND FOR THE SUBSEQUENT ASSESSMENT YEAR 2007-08 IN ITA NO.13 0/HYD/2011 DATED 13.4.2011. WE FIND THAT THE ASSESSEE HAS INCU RRED AN EXPENDITURE OF RS.5 CRORES AS CONTRIBUTION FOR ESTA BLISHING A MEDICAL COLLEGE IN CHHATTISGARH WHERE THE ASSESSEE IS HAVIN G A MINING UNIT AND STEEL PLANT. IN THE ASSESSMENT YEAR 2005-06, F ACTS WERE SIMILAR AND THE ASSESSEE HAS INCURRED AN EXPENDITURE OF RS. 5 CRORES AS ITA NO.1085/H/2010 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD. HYD 3 CONTRIBUTION FOR ESTABLISHING A MEDICAL COLLEGE AT THE SAME PLACE IN CHHATTISGARH AND THE TRIBUNAL VIDE ITS ORDER DATED 30.9.2009 CITED SUPRA, HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE AND HAS HELD THAT THE AMOUNT IS ALLOWABLE AS REVENUE EXPENDITURE . THE TRIBUNAL RECORDED IN ITS ORDER THAT ONE OF THE CONDITIONS FO R CONTRIBUTING THE MONEY IS TO COVER MEDICAL TREATMENT FOR ADIVASIS WH O WERE AFFECTED BY THE ASSESSEES PROJECT IN THE LOCALITY AND ALSO THE EMPLOYEES OF THE ASSESSEE AND THEIR DEPENDENTS WERE TO BE TREATED FR EE OF COST. THE TRIBUNAL HAS RECORDED THAT COOPERATION OF THE PEOPL E WHO WERE AFFECTED BY THE MINING DIVISION OF THE ASSESSEE WAS REQUIRED. WE BEING IN AGREEMENT WITH THE DECISION OF THE COORDIN ATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING Y EAR, VIZ. ASSESSMENT YEAR 2005-06 AND SUCCEEDING YEAR, VIZ. A SSESSMENT YEAR 2007-08, DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY, THE GROUND OF THE REVENUE IN THIS APPEAL IS REJECTE D. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 5.8.2011 SD/- SD/- (CHANDRA POOJARI) ( G.C. G UPTA) A CCOUNTANT MEMBER V ICE PRESIDENT DATED THE 5 TH AUGUST, 2011 COPY FORWARDED TO: 1. NATIONAL MINERAL DEVELOPMENT CORPORATION LTD., KHAN IJ BHAVAN, 10-3-311/A, CASTLE HILLS, MASAB TANK, HYDERABAD 2. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 16(1) , HYDERABAD ITA NO.1085/H/2010 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD. HYD 4 3. CIT(A)-V, HYDERABAD. 4. COMMISSIONER OF INCOME - TAX - IV HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S