ACIT, Circle-16(1), Hyderabad, Hyderabad V. National Mineral Development Corporation Limited, Hyderabad, Hyderabad

ITA 148/HYD/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2524 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 31-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Depreciation; Additional depreciation; Revenue expenditure
• Section: 143(3); 263

Judgement Text

ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.148/HYD/2017 (ASSESSMENT YEAR: 2012-13) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(1) HYDERABAD VS M/S. NATIONAL MINERAL DEVELOPMENT CORPN. LTD HYDERABAD PAN: AAACN 7325 A FOR REVENUE : SMT. G. APARNA RAO, DR FOR ASSESSEE : SHRI LAXMI NIWAS SHARMA O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2012-13. IN TH IS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF TH E CIT (A)-4 DATED 21.11.2016. THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL: 1. THE LD. CIT(A), ERRED IN DELETING DISALLOWANCE ON ACCOUNT OF MINE CLOSURE OBLIGATION. 2. THE LD. CIT(A), ERRED IN HOLDING THAT MINE CLOSURE OBLIGATION IS AN ASCERTAINED LIABILITY AND ALLOWABLE. 3. THE LD. CIT(A), ERRED IN ALLOWING THE DEPRECIATION ON LEASE HOLD LAND TREATING THE SAME AS INTANGIBLE ASSET. DATE OF HEARING : 04.05.2017 DATE OF PRONOUNCEMENT : 09.05.2017 ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 2 OF 9 4. THE LD. CIT(A), ERRED IN ALLOWING THE CLAIM OF EXPENDITURE TOWARDS CORPORATE SOCIAL RESPONSIBILITY. 5. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A)-4, HYDERABAD, ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE ISSUES HAD ARISEN IN THE ASSESSEES OWN CASE IN THE EARLIER A.YS AND THE ISSUES HAD TRAV ELLED UP TO THE INCOME TAX APPELLATE TRIBUNAL WHEREIN RELIEF HAS BE EN GRANTED TO THE ASSESSEE. HE SUBMITTED THAT THE CIT (A) HAS ONL Y FOLLOWED THE OBSERVATIONS OF THE INCOME TAX APPELLATE TRIBUNAL F OR GIVING RELIEF TO THE ASSESSEE AND THEREFORE, THE ORDER OF THE CIT (A) SHOULD BE SUSTAINED. 3. THE LEARNED DR SUPPORTED THE ORDERS OF THE AO AN D SUBMITTED THAT THE ISSUES ARE NOW PENDING ADJUDICAT ION BEFORE THE HON'BLE HIGH COURT OF TELANGANA & ANDHRA PRADES H. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE, A PUBLIC SECT OR UNDERTAKING, ENGAGED IN THE MINING OF IRON ORE, DIAMONDS, WIND P OWER GENERATION AND SALE, FILED ITS RETURN OF INCOME FOR THE A.Y 2012-13 ON 24.09.2012. DURING THE ASSESSMENT PROCEEDINGS U/ S 143(3) OF THE ACT, THE AO MADE THE FOLLOWING DISALLOWANCES: ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 3 OF 9 I. DISALLOWANCE OF MINE CLOSURE OBLIGATION RS.9,12,00,000 II. DISALLOWANCE OF DEPRECIATION ON INTANGIBLE ASSETS RS.14,19,31,410 III. DEMURRAGES ON SHIPMENT CHARGES RS.65,25,000 IV. DISALLOWANCE OF EXPENSES ON ACCOUNT OF CORPORATE SOCIAL RESPONSIBILITY RS.63,32,00,000 V. DISALLOWANCE OF ADDITIONAL DEPRECIATION WRONGLY CLAIMED RS.17,40,11,599 VI. DISALLOWANCE U/S 40(A)(IA) FOR NON DEDUCTION OF TAX ON COMMISSION PAID RS. 7,64,20,400 VII. DISALLOWANCE U/S 35(2AB) RS. 1,89,32,004 5. AGGRIEVED BY THE DISALLOWANCES MADE BY THE AO, T HE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) WHO GRA NTED RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDERS OF THE TRIBUNA L IN THE ASSESSEES OWN CASE FOR THE EARLIER A.YS. 6. AS REGARDS GROUND NO.1 & 2 IS CONCERNED, WE FIND THAT THE TRIBUNAL FOR THE A.Y 2009-10 IN ITA NO.287/HYD/2 013 DATED 18.7.2014 HAS CONSIDERED THIS ISSUE AT LENGTH AND H AS HELD AS UNDER: 19. THE NEXT EFFECTIVE GROUND OF THE ASSESSEE IN TH IS APPEAL RELATES TO ADDITION OF RS.15,38,26,817 MADE BY THE ASSESSING O FFICER AND SUSTAINED BY THE CIT(A) ON ACCOUNT OF MINE CLOSURE OBLIGATION . 20. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE REVENUE AUTHORITIES ON THIS ISSUE AND OTHER MATERIAL AVAILA BLE ON RECORD. IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL F OR THE ASSESSEE, WHICH HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPA RTMENTAL REPRESENTATIVE, THAT THIS ISSUE IS COVERED BY THE D ECISIONS OF THE TRIBUNAL IN ASSESSEE'S OWN CASES DATED 28.2.2014 FO R ASSESSMENT YEAR 2008-09 IN ITA NO.714/HYD/2012 AND DATED 9.5.2014 F OR ASSESSMENT YEAR 2010-11 IN ITA NO.1795/HYD/2013. WE FIND THAT THE COORDINATE BENCHES OF THIS TRIBUNAL, VIDE PARAS 9 AND 9.1 OF I TS ORDER DATED 28.2.2014 FOR ASSESSMENT YEAR 2008-09, CITED SUPRA, DECIDED THE ISSUE IN THE FOLLOWING MANNER: ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 4 OF 9 '9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES , PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS CITED. IN AY 2006-07, THE COORDINATE BENC H IN ASSESSEE'S OWN CASE (SUPRA), HELD AS FOLLOWS: '11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RE CORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS OBSERVED THAT THE BASIS OF CALCULATION FOR THE RELEVANT AY 2006-07 FOR RS. 71.18 CRORES WAS SUBMITTED DURING THE ORIGINAL ASSESSMENT AND ACCEPT ED BY THE AO. THE DETAILED CALCULATION OF RS. 21.31 CRORES CHARGED TO P&L A/C (ON THE BASIS OF RS. 71.18 CRORES) WAS ALSO ENCLOSED AND PR ODUCED BEFORE THE CIT. HENCE, THE CIT IS WRONG IN HIS OBSERVATION THA T THE ESTIMATE OF RS. 21.31 CRORE IS EXCESSIVELY ON A HIGHER SIDE AND ABS OLUTELY NO REALISTIC OR RATIONAL BASIS FOR SUCH CALCULATION. 12. THE CIT IS NOT CORRECT IN INVOKING THE PROVISIO NS OF SECTION 263 AS WE FIND THAT THE ISSUE IS DEBATABLE AND WHEN TWO VI EWS ARE POSSIBLE THE AO HAS TAKEN ONE VIEW. THE APEX COURT IN THE CASE O F MALABAR INDUSTRIAL CO. LTD. VS. CIT REPORTED IN 243 ITR 83 AS WELL AS CIT VS. MAX INDIA LTD. REPORTED IN 295 ITR 282 HAS HELD THA T WHEN THERE ARE TWO VIEWS POSSIBLE AND THE AO HAS TAKEN ONE VIEW, THE O RDER OF THE AO CANNOT BE CONSIDERED AS ERRONEOUS AND HENCE THE CIT CANNOT EXERCISE REVISIONAL POWER U/S 263. AS POINTED OUT ABOVE, THE PROVISIONS FOR AN ACCRUED EXISTING LIABILITY, EVEN THOUGH, THE ACTUAL EXPENDITURE MAY TAKE PLACE AT A LATER DATE, IS AN ALLOWABLE DEDUCTION AN D THE CIT ERRED IN TREATING IT AS AN UNASCERTAINED LIABILITY. THEREFOR E, WE SET ASIDE THE ORDER OF THE CIT PASSED U/S 263 AND THE ORDER OF THE AO I S RESTORED.' 9.1 THE ABOVE DECISION RELIED UPON BY THE AR OF THE ASSESSEE, THOUGH, IT WAS DELIVERED IN ASSESSEE'S OWN CASE FOR AY 2006-07 CANNOT BE APPLIED TO THE FACTS OF THE CASE AS THAT ORDER WAS DELIVERE D BY THE TRIBUNAL IN CONNECTION WITH THE ORDER PASSED U/S 263. THE ORDER PASSED U/S 263 READ WITH SECTION 143(3) AND THE ORDER PASSED U/S 143(3) READ WITH SECTION 251 ARE STANDING ON DIFFERENT FOOTING. THE SCOPE OF SECTION 263 IS NOT PAR WITH THE PROVISIONS OF SECTION 251 OF THE ACT. BEING SO, WE CANNOT BORROW SUPPORT FROM THE ORDER OF THE TRIBUNAL PASSE D IN ITA NO. 991/HYD/2011 FOR AY 2006-07, ON WHICH RELIANCE PLAC ED BY THE ASSESSEE'S COUNSEL. IN THE PRESENT CASE, THERE IS A CATEGORICAL FINDING GIVEN BY THE CIT(A) THAT THERE ARE CERTAIN MINES NO T YET COMMENCED. ON THAT MINE CLOSURE OBLIGATION WORKS OUT TO RS. 4,98, 058/- CANNOT BE ALLOWED. FURTHER, MINES AT KUMARASWAMY AND LALPUR W HERE THERE IS NO PRODUCTION, BEING SO, NO OBLIGATION IS ALLOWABLE. F URTHER, ASSESSEE HAS NOT GIVEN YEAR-WISE BREAK- UP. BEING SO, THE CIT(A) DIRECTED THE AO TO ASCERTAIN THE ACCOUNT OF YEAR-WISE MINING, WHICH HA S BEEN DONE FROM THE REMAINING MINES AND ALLOW MINE CLOSURE OBLIGATION T O THE EXTENT MINING DONE CORRESPONDING TO THE CURRENT YEAR. HE FURTHER GAVE A DIRECTION TO THE AO IF THE ASSESSEE FAILS TO PROVIDE SUCH DATA, THEN , PRO RATA H AS TO BE APPLIED. THUS, THE CIT(A) HAS GIVEN A CATEGORICAL F INDING IN PARAS 4.3 & 4.4 OF HIS ORDER. THEREFORE, WE DO NOT FIND ANY INF IRMITY ON THAT P ART OF ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 5 OF 9 THE ORDER AND ACCORDINGLY, WE CONFIRM THE SAME. THI S GROUND RAISED BY THE ASSESSEE IS DISMISSED'. FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL DATED 28.2.2014, COORDINATE BENCH OF THIS TRIBUNAL, VIDE PARAS 47 AN D 48 OF ITS ORDER DATED 9.5.2014 FOR THE ASSESSMENT YEAR 2010-11 IN I TA NO.1795/HYD/2013, THOUGH HELD THAT MINE CLOSURE OBL IGATION IS NOT A CONTINGENT LIABILITY, BUT AN ASCERTAINED LIABILITY, RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER, FOR RECOMPUTING THE DISALLOWANCE, IN THE FOLLOWING MANNER- '48. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE HOLD THAT MINE CLOSURE OBLIGATION IS NOT A CONTINGENT LIABILITY BU T ASCERTAIN LIABILITY. HOWEVER, IT HAS TO BE VERIFIED THAT WHETHER ASSESSE E HAS MADE THE CLAIM ON THE MINES WHICH ARE IN WORKING CONDITION WHICH A RE BEING OPERATED OR NOT. IF THE ASSESSEE HAS MADE THE CLAIM ON MINES WHICH HAVE NOT STARTED OPERATIONS, THE SAME CANNOT BE ALLOWED. AS RIGHTLY HELD BY THE CIT(A) IN A.Y. 2008-09, ASCERTAINABILITY OF LIABILI TY IS TO BE ASCERTAINED YEAR-WISE. THEREFORE, TO THAT EXTENT, FOLLOWING THE COORDINATE BENCH DECISION, WE DIRECT THE ASSESSEE TO FURNISH THE REL EVANT DATA TO THE A.O. TOWARDS THE MINES CLOSURE OBLIGATION AND A.O. IS DI RECTED TO VERIFY AND ALLOW THE AMOUNT ACCORDINGLY. SUBJECT TO THE ABOVE OBSERVATIONS, THE GROUND NO.2 IS CONSIDERED AS ALLOWED FOR STATISTICA L PURPOSES.' 21. IN THIS VIEW OF THE MATTER, FOLLOWING THE CONSI STENT VIEW TAKEN BY THE TRIBUNAL IN ASSESSEE'S OWN CASES FOR OTHER YEARS NO TED ABOVE, WE HOLD THAT THE MINE CLOSURE OBLIGATION IS NOT A CONTINGEN T LIABILITY BUT AN ASCERTAINED LIABILITY. SINCE THE QUANTUM OF SUCH AS CERTAINED LIABILITY HAS TO BE DETERMINED YEAR-WISE, AS OBSERVED IN THE ORDE R FOR ASSESSMENT YEAR 2010-11, EXTRACTED ABOVE, WE DIRECT THE ASSESS EE TO FURNISH THE RELEVANT DATA TO THE ASSESSING OFFICER TOWARDS MINE S CLOSURE OBLIGATION. THE ASSESSING OFFICER SHALL VERIFY SUCH DATA AND RE COMPUTE THE DISALLOWANCE, IF ANY, WARRANTED, IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASS ESSEE. ASSESSEE'S GROUNDS ON THIS ISSUE ARE TREATED AS ALLOWED FOR ST ATISTICAL PURPOSES . 7. RESPECTFULLY FOLLOWING THE SAME, WE REJECT THE G ROUNDS OF APPEAL NO. 1 & 2. 8. AS REGARDS GROUND OF APPEAL NO.3, WE FIND THAT T HE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y 2009 -10 HAS CONSIDERED THIS ISSUE AT LENGTH AND HELD AS UNDER: ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 6 OF 9 22. THE NEXT EFFECTIVE GROUND OF THE ASSESSEE IN TH IS APPEAL RELATES TO ADDITION OF RS.10,66,56,599 MADE BY THE ASSESSING O FFICER AND SUSTAINED BY THE CIT(A), BY DISALLOWANCE OF ASSESSE E'S CLAIM FOR DEPRECIATION ON LEASE HOLD LAND. 23. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE REVENUE AUTHORITIES ON THIS ISSUE AND OTHER MATERIAL AVAILA BLE ON RECORD. IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL F OR THE ASSESSEE, WHICH HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPA RTMENTAL REPRESENTATIVE, THAT THIS ISSUE IS COVERED BY THE D ECISIONS OF THE TRIBUNAL IN ASSESSEE'S OWN CASES DATED 28.2.2014 FO R ASSESSMENT YEAR 2008-09 IN ITA NO.714/HYD/2012 AND DATED 9.5.2014 F OR ASSESSMENT YEAR 2010-11 IN ITA NO.1795/HYD/2013. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL, VIDE PARA 22 AND 22.1 OF IT S ORDER OF THIS TRIBUNAL DATED 28.2.2014 FOR ASSESSMENT YEAR 2008-0 9, CITED SUPRA, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING MANNER; '22. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIE S AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE M/S. NATIONA L MINERAL DEVELOPMENT CORPORATION LIMITED, HYDERABAD AUTHORITIES BELOW. S IMILAR CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF ITAT, CUTTACK IN CASE EAST INDIA MINERALS LTD. VS. JCIT IN ITA NO. 224/CTK/2012, VID E ITS ORDER DATED 25/06/2012, ON WHICH RELIANCE PLACED BY THE ASSESSE E, WHEREIN IT HAS BEEN HELD AS FOLLOWS: '7. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE FACTS AND CIRC UMSTANCES OF THE CASE, WE UPHOLD THE CONTENTION OF THE LEARNED COUNSEL FOR TH E ASSESSEE FOR THE SIMPLE REASON THAT THE DENIAL OF CLAIM OF DEPRECIATION HAS BEEN MADE ON MISINTERPRETATION OF LAW AND THE APPLICABILITY THER EOF. EXPLANATION TO SECTION 32(1)(II) LEANS IN FAVOUR OF THE ASSESSEE TO THE EXTENT THAT IT IS THE ACTUAL ACTION OF PUT TO USE WHICH ENTITLES THE ASSESSEE TO CLAIM DEPRECIATION. A STRAIGHT LINE METHOD OF CLAIMING THE WRITING OFF OF LEASE HOLD RI GHTS FOR THE PERIOD OF LEASE CANNOT BE DENIED TO THE ASSESSEE FOR THE SIMPLE REA SON IT BEING INTANGIBLE ASSET HAS BEEN WRITTEN OFF WHICH PERTAINS TO LAND BEING A INTANGIBLE ASSET. IT IS NOBODY'S CASE THAT THE LAND EITHER BELONGED TO THE LESSEE OR TO THE GOVERNMENT. THIS SIMPLY INDICATES THAT A DEPLETION OF THE LAND AGAINST THE PAYMENT OF PREMIUM IT WAS LEASED HAS TO BE CLAIMED AFTER CAPIT ALIZATION THEREOF BY THE ASSESSEE WHICH IS FOR THE PURPOSE OF ITS MAIN BUSIN ESS. ALL EXPENSES ARE INCURRED FOR THE PURPOSE OF BUSINESS AND ARE INCIDENTAL TO T HE HOLDING OF RIGHTS WERE CLAIMED U/S.32(1)(II) BEING THE LICENSE TO CARRY OU T THE MINING THEREFORE COULD NOT BE DENIED INSOFAR AS THE GOVERNMENT AND THE LES SEE ARE IN CONTROL OF THE ASSET. THE DEFINITION OF DEPRECIATION THEREFORE HAS BEEN MISCONSTRUED FOR THE PURPOSE OF ALLOWING DEDUCTION BY THE ASSESSING OFFI CER 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 I.E. AS SESSMENT YEAR 2003-04. IN THIS VIEW OF THE MATER, WE ARE INCLINED TO HOLD THA T THE ASSESSEE IS ENTITLED TO DEPRECIATION AS CHARGED TO THE P & L ACCOUNT IN ACC ORDANCE WITH ITS BUSINESS ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 7 OF 9 EXIGENCIES. WE DIRECT ACCORDINGLY. ON THE CLAIM OF DEDUCTION/S.80G, THE A.O., IS DIRECTED TO VERIFY THE RECEIPTS AND ALLOW THE DE DUCTION IN ACCORDANCE WITH THE PROVISIONS OF INCOME-TAX ACT ,1961.' 22.1 SINCE THE ISSUE UNDER CONSIDERATION IS MATERIA LLY IDENTICAL TO THAT OF THE CASE DECIDE BY THE TRIBUNAL IN THE CASE OF EAST IND IA MINERALS LTD., RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE ORDER OF THE C IT(A) AND DIRECT THE AO TO DELETE THE ADDITION MADE IN THIS REGARD'. FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL DATED 28.2.2014, COORDINATE BENCH OF THIS TRIBUNAL, VIDE PARAS 36 AN D 37 OF ITS ORDER DATED 9.5.2014 M/S. NATIONAL MINERAL DEVELOPMENT CO RPORATION LIMITED, HYDERABAD FOR THE ASSESSMENT YEAR 2010-11 IN ITA NO.1795/HYD/2013, DECIDED THIS ISSUE IN FAVOUR OF T HE ASSESSEE. IN THIS VIEW OF THE MATTER, FOLLOWING THE CONSISTENT VIEW T AKEN BY THE TRIBUNAL IN ASSESSEE'S OWN CASES FOR OTHER YEARS NOTED ABOVE , WE DELETE THE ADDITION OF RS.10,66,56,599 MADE BY THE ASSESSING O FFICER AND SUSTAINED BY THE CIT(A), BY DISALLOWING THE ASSESSE E'S CLAIM FOR DEPRECIATION ON LEASE HOLD LAND. ASSESSEE'S GROUNDS ON THIS ISSUE ARE ACCORDINGLY ALLOWED . 9. THUS, GROUND OF APPEAL NO.3 IS REJECTED. 10. AS REGARDS GROUND NO.4, WE FIND THAT THIS ISSUE HAS ALSO BEEN CONSIDERED IN THE ASSESSEES OWN CASE FOR THE A.Y 2009- 10 WHEREIN AND IT WAS HELD AS UNDER: 26. THE NEXT EFFECTIVE GRIEVANCE OF THE ASSESSEE I N THIS APPEAL RELATES TO ADDITION OF RS.33,30,05,797 MADE BY THE ASSESSIN G OFFICER AND SUSTAINED BY THE CIT(A), BY DISALLOWANCE OF ASSESSE E'S CLAIM FOR EXPENDITURE STATED TO HAVE BEEN INCURRED IN DISCHAR GE OF CORPORATE SOCIAL RESPONSIBILITY. 27. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE REVENUE AUTHORITIES ON THIS ISSUE AND OTHER MATERIAL AVAILA BLE ON RECORD. IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL F OR THE ASSESSEE, WHICH HAS NOT BEEN NOT CONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, THAT THIS ISSUE IS COVERED BY THE D ECISIONS OF THE TRIBUNAL IN ASSESSEE'S OWN CASES DATED 28.2.2014 FO R ASSESSMENT YEAR 2008-09 IN ITA NO.714/HYD/2012 AND DATED 9.5.2014 F OR ASSESSMENT YEAR 2010-11 IN ITA NO.1795/HYD/2013. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL, VIDE PARA 35, 36 AND 36.1 O F ITS ORDER DATED 28.2.2014 FOR ASSESSMENT YEAR 2008-09, CITED SUPRA, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING MANNER: ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 8 OF 9 35. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE RECORD. WE FIND THAT THE ISSUE IN DISPUTE IS SQUARELY M/S. NATIONAL MINE RAL DEVELOPMENT CORPORATION LIMITED, HYDERABAD COVERED BY THE DECISION OF COORD INATE BENCH IN ASSESSEE'S OWN CASE FOR AY 2005-06 IN ITA NO. 1791/HYD/2008 DA TED 30/09/2009 WHEREIN IT HAS BEEN HELD AS FOLLOWS: '14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. NO DOUBT THE ASSE SSEE INCURRED AN EXPENDITURE OF RS. 5,00,00,000/- AS CONTRIBUTION FOR ESTABLISHI NG A MEDICAL COLLEGE. THE FACT THAT THE ASSESSEE IS HAVING A MINING UNIT AND A STEEL PLANT IN CHHATTISGARH IS NOT DISPUTE. T HE OBJECTION OF THE DEPARTMENT APPEARS TO BE THAT THE MEDICAL COLLEGE WAS LOCATED A T A DISTANCE OF 1 6 KM S. AND THE ASSES SEE, INSTEAD OF PROVIDING RELIEF TO THE AFFECTED PEOPLE, DIRECTLY INCURRED THE EXPENDITURE FOR ESTABLISHING THE MEDICAL COLLEGE. T HE FACT REMAINS THAT ONE OF THE CONDITIONS FOR CONTRIBUTING THE MONEY WAS TO GI VE FREE MEDICAL TREATMENT TO THE ADIVASIS WHO WERE AFFECTED BY THE ASSES SEE'S P ROJECT IN THE LOCALITY. MOREOVER, THE EMPLOYEES OF THE ASSESSEE AND THEIR D EPENDENTS WERE TO BE TREATED FREE OF COST. FIVE SEAS WERE RESERVED IN THE MEDICA L COLLEGE FOR THE CHILDREN OF THE EMPLOYEES OF THE ASSESSEE. IN FACT ADMISSION WA S ALSO GIVEN TO THE CHILDREN OF THE EMPLOYEES OF THE ASSESSEE AS PER THE CONDITI ON STIPULATED WHILE CONTRIBUTING THE MONEY. THE ASSESSEE ALSO HAD A REP RESENTATION IN THE BOARD. IN VIEW OF THE ABOVE, IN OUR OPINION, THE CONTRIBUTION OF RS. 5 CRORES IS ONLY A WELFARE MEA SURE FOR THE UPLIFTMENT OF THE ADIVASIS IN THE LOCALITY WHERE THE MINING UNIT WAS SITUATED AND ALSO FOR THE WELFARE O F THE EMPLOYEES OF THE ASSES SEE. THIS CONTRIBUTION WOULD DEFINITELY GO A LONG W AY IN CONDUCTING THE ASSES SEE'S MINING BUSINESS IN A PROFITABLE MANNER. WHEN THE ASSESSEE IS HAVING A MINING UNIT IN A REMOTE CORNER OF THE COUNTRY, THE COOPERATION OF THE VILLAGERS IS VERY MUCH REQUIRED FOR CONDUCTING THE BUSINESS. MOR E PARTICULARLY, THE COOPERATION OF THE PEOPLE WHO ARE AFFECTED BY THE M INING OPERATION OF THE ASSES SEE IS REQUIRED. MERELY BECAUSE THE HOSPITAL AND ME DICAL COLLEGE ARE SITUATED 16 KMS AWAY FROM THE UNIT, THAT WILL NOT DETER THE MED ICAL INSTITUTION IN GIVING TREATMENT TO THE AFFECTED PEOPLE. MOREOVER, ADMISSI ON WAS GIVEN TO THE CHILDREN OF THE ASSESSEE'S EMPLOYEES IN THE MEDICAL COLLEGE. THEREFORE, INDIRECTLY THE CONTRIBUTION MADE BY THE ASSESSEE TAKES CARE OF THE EDUCATION OF THE EMPLOYEES' CHILDREN. THIS WOULD CERTAINLY BE A WELFARE MEASURE ON THE PART OF THE ASSES SEE FOR CARRYING OUT THE BUSINESS IN AN EFFECTIVE AND E FFICIENT MANNER. M/S. NATIONAL MINERAL DEVELOPMENT CORPORATION LIMIT ED, HYDERABAD THEREFORE, IN OUR OPINION, THE CONTRIBUTION OF RS. 5,00,00,000 HAS TO BE TREATED AS REVENUE EXPENDITURE FOR THE PURPOSE OF THE BUSIN ESS. THEREFORE, WE DO NOT FIND ANY JUSTIFICATION IN DISALLOWING THE SUM. ACCO RDINGLY, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE ENTI RE ADDITION.' 36. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICA L TO THAT OF AY 2005-06, WE DELETE THE ADDITIONS M A DE UNDER THE HEADS FROM (I ) TO VII). 36.1 HOWEVER, WE MAKE IT CLEAR THAT THE EXPENDITURE INCURRED AT RS. 3,48,04,548/- SHOWN AS MISCELLANEOUS EXPENSES CANNO T BE ALLOWED AS THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF EXPENDITU RE, THEREFORE, IN THE ABSENCE OF ITA NO 148 OF 2017 NMDC LTD HYDERABAD PAGE 9 OF 9 REQUISITE INFORMATION THE SAID EXPENDITURE CANNOT B E ALLOWED. ACCORDINGLY, THIS GROUND IS PARTLY ALLOWED. ' FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL DATED 28.2.2014, COORDINATE BENCH OF THIS TRIBUNAL, VIDE PARAS 41 AN D 42 OF ITS ORDER DATED 9.5.2014 FOR THE ASSESSMENT YEAR 2010-11 IN I TA NO.1795/HYD/2013, DECIDED THIS ISSUE IN FAVOUR OF T HE ASSESSEE, SUBJECT TO THE OBSERVATION THAT THE ASSESSING OFFICER SHALL EXAMINE THE EXPENDITURE IN THAT YEAR ALSO AND ALLOW THE SAME AC CORDINGLY. IN THIS VIEW OF THE MATTER, FOLLOWING THE CONSISTENT VIEW T AKEN BY THE TRIBUNAL IN ASSESSEE'S OWN CASES FOR OTHER YEARS NOTED ABOVE , WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE NATURE OF THE EXPE NDITURE CLAIMED IN THIS YEAR ALSO AND ACCORDINGLY REDETERMINE THE ALLO WABILITY OF SUCH EXPENDITURE IN ACCORDANCE WITH LAW AND IN CONSONANC E WITH THE OBSERVATIONS OF THE TRIBUNAL FOR EARLIER YEARS NOTE D ABOVE. ASSESSEE'S GROUNDS ON THIS ISSUE ARE ACCORDINGLY TREATED AS AL LOWED. 11. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND OF APPEAL IS REJECTED. 12. GROUND NOS. 5 & 6 ARE GENERAL IN NATURE AND NEE D NO ADJUDICATION. 13. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MAY, 2017. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 9 TH MAY, 2017. VINODAN/SPS COPY TO: 1 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(1) 1 ST FLOOR, BLOCK B IT TOWER, MASAB TANK, HYDERABAD 2 M/S. NATIONAL MINERAL DEVELOPMENT CORPN. LTD, KHA NIJ BHAVAN, 10-3-311/A CASTLE HILLS, MASAB TANK, HYDERABAD 3 CIT (A)-4 HYDERABAD 4 PR. CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER