Hindustan Zinc Limited, UDAIPUR V. Addl. CIT, UDAIPUR

ITA 224/JODH/2004

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6523 (ITAT-JODHPUR)
• Duration Of Justice: 10 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 1998-1999
• Appeal Filed On: 22-04-2004
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRA
• Keywords: Depreciation; Opportunity of being heard; Difference of opinion
• Section: 37(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH , JAIPUR (BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER) (AS THIRD MEMBER) ITA NO. 224/JU /2004 ASSESSMENT YEAR: 1998 - 99 PAN : AAACH 7354 K M/S. HINDUSTAN ZINC LTD. VS. THE ADDL. CIT (ASSTT.) YASHAD BHAWAN , SPECIAL RANGE UDAIPUR UDAIPUR (APPELLANT) (RESPONDENT) ITA NO. 298/JU /2004 ASSESSMENT YEAR : 1998 - 99 PAN : AAACH 7354 K THE JCIT V S. M/S. HINDUSTAN ZINC LTD. RANGE - 2, UDAIPUR YASHAD BHAWAN, UDAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH & SHRI DINESH GUPTA DEPARTMENT BY: SHRI SUBHASH CHANDRA DATE OF HEARING: 22 - 07 - 2014 DATE OF PRONOUNCEMENT: 22 - 07 - 2014 O R D E R PER: R.S. SYAL, A.M. THE HONBLE PRESIDENT HAS NOMINATED ME U/S 255(4) OF THE INCOME TAX ACT, 1961 (HEREINAFTER ALSO CALLED AS THE ACT) TO RENDER OPINION ON THE DIFFERENCE BETWEEN THE MEMBERS WHO INITIALLY HEARD THE PRESENT APPEALS BUT DIFFERED IN 2 THEIR RESPECTIVE OPINIONS. BEFORE PROCEEDING WITH TH E MATTER, IT IS RELEVANT TO NOTE THAT BOTH THE LEARNED MEMBERS, APART FROM DIFFERING ON THE MERITS OF THE CASE, ALSO COULD NOT BE IN UNISON IN MAKING REFERENCE U/S 255(4) OF THE ACT. IT IS NOTICED THAT BOTH THE LEARNED MEMBERS HAVE DIFFERED ON FOUR POINTS. THE FIRST POINT OF DIFFERENCE IS ABOUT ALLOWABILITY OR OTHERWISE OF PRIOR PERIOD EXPENSES. IN MY CONSIDERED OPINION, THE CONTROVERSY ON THIS ISSUE WILL BE PROPERLY REFLECTED THROUGH FOLLOWING QUESTION. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS. 1,65,50,474/ - ON ACCOUNT OF PRIOR PERIOD EXPENSES ? 2. BRIEFLY STATED THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE CLAIMED DEDUCTION FOR PRIOR PERIOD EXPENS ES AMOUNTING TO RS. 1.65 CRORES, WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER BY RELYING ON THE VIEW TAKEN BY HIM FOR THE A.YS. 1996 - 97 AND 1997 - 98. THE LEARNED CIT(A) UPHELD THE DISALLOWANCE. WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL, THE LEARNED J.M. OBSERVED THAT THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE BY RELYING ON THE TRIBUNAL ORDER FOR A.Y. 1992 - 93. HE NOTICED THAT THE LEARNED CIT(A) IGNORED THE TRIBUNAL ORDERS FOR A.YS. 1993 - 94 TO 1995 - 96 ON THE SAME ISSUE. HE ALSO TOOK INTO CONSIDERATION T HE TRIBUNAL ORDER FOR A.Y. 1997 - 98 BY WHICH THE CLAIM OF THE ASSESSEE WAS REJECTED. HOWEVER, RELYING ON THE TRIBUNAL ORDER FOR THE A.Y. 1995 - 96 (SIC A.Y. 1994 - 95), HE REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE DETAILS AND 3 ALLOWING DEDUCTION, IF PERMISSIBLE AS PER LAW. HOWEVER, THE LEARNED A.M. UPHELD THE VIEW TAKEN BY THE LEARNED CIT(A) BY RELYING ON THE TRIBUNAL ORDER FOR A.YS. 1996 - 97 AND 1997 - 97. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATER IAL AVAILABLE ON THE RECORD. THE LEARNED A.R. ARGUED THAT SUCH PRIOR PERIOD EXPENSES REFLECTED THE LIABILITY INCURRED IN EARLIER YEARS BUT GETTING CRYSTALLIZED IN THE INSTANT YEAR. HE ALSO SUBMITTED THAT IN SOME CASES, THE EXPENSES COULD NOT BE ACCOUNTED F OR IN THE EARLIER YEAR BECAUSE SANCTIONS FROM MANAGEMENT WERE OBTAINED LATE FALLING IN THE PERIOD RELEVANT TO THE INSTANT YEAR. RELYING ON CERTAIN DECISIONS, HE SUBMITTED THAT THE ENTIRE EXPENDITURE SHOULD BE ALLOWED AS DEDUCTION IN THE INSTANT YEAR IRRESP ECTIVE OF THE YEAR TO WHICH IT PERTAINS. PER CONTRA, THE LEARNED D.R. OPPOSED THE CONTENTION PUT FORWARD ON BEHALF OF THE ASSESSEE. HE STATED THAT THE EXPENDITURE WAS RIGHTLY DISALLOWED BY THE LEARNED CIT(A) BY FOLLOWING THE TRIBUNALS ORDERS FOR THE A.YS. 1996 - 97 AND 1997 - 98. 4. BEFORE PROCEEDING TO DEAL WITH THE MATTER, IT IS NECESSARY TO POINT OUT THAT SECTION 255(4) OF THE ACT DEALS WITH THE SITUATION WHEN THERE IS DIFFERENCE IN OPINION ON ANY POINT OR POINTS BETWEEN THE MEMBERS OF A BENCH. IN SUCH A CA SE, THE MEMBERS STATE POINT ON WHICH THEY DIFFER BY REFERRING THE MATTER TO THE PRESIDENT OF THE TRIBUNAL FOR HEARING ON SUCH POINT(S) BY ONE OR MORE OF THE OTHER MEMBERS OF THE TRIBUNAL. THIS SUB - SECTION FURTHER PROVIDES THAT SUCH POINT OR POINTS SHALL BE DECIDED ACCORDING TO OPINION OF MAJORITY OF THE MEMBERS OF THE 4 APPELLATE TRIBUNAL WHO HAVE HEARD THE CASE, INCLUDING THOSE WHO FIRST HEARD IT. A BARE PERUSAL OF THIS PROVISIONS INDICATES THAT THE POINT OF DIFFERENCE BETWEEN THE MEMBERS IS DECIDED BY TH E MAJORITY VIEW BY TAKING INTO CONSIDERATION THE OPINION EXPRESSED BY THE THIRD MEMBER NOMINATED BY THE PRESIDENT AND ALSO THE MEMBERS WHO INITIALLY HEARD THE APPEAL AND DIFFERED IN THEIR RESPECTIVE CONCLUSIONS. THIS SHOWS THAT A THIRD MEMBER HAS NO OPTION BUT TO AGREE WITH EITHER OF THE TWO VIEWS TAKEN BY THE MEMBERS, WHO INITIALLY HEARD THE APPEAL, SO AS TO FORM A MAJORITY VIEW. IN THE LIKE MANNER, THE PARTIES APPEARING FROM THE OPPOSITE SIDES ALSO CANNOT CANVASS A THIRD VIEW BEFORE THE THIRD MEMBER CONT RARY TO WHAT WAS HELD BY THE TWO MEMBERS WHO INITIALLY HEARD THE APPEAL. IF THE PARTIES ARE ALLOWED TO ARGUE A CASE FROM A THIRD ANGLE OR THE THIRD MEMBER CANVASSES A VIEW DIFFERENT FROM THOSE TAKEN BY THE TWO MEMBERS WHO EARLIER HEARD THE APPEAL, NO MAJOR ITY OF OPINION WOULD EVER BE FORMED. IN THAT VIEW OF THE MATTER, IT IS CRYSTAL CLEAR THAT THE THIRD MEMBER IS SUPPOSED TO AGREE WITH EITHER OF SUCH TWO VIEWS. HE CAN NEITHER ENTERTAIN NOR LAY DOWN A THIRD VIEW. 5. COMING BACK TO THE POINT IN QUESTION, IT IS SEEN THAT THE LEARNED J.M. RESTORED THE MATTER TO THE FILE OF ASSESSING OFFICER FOR DECIDING IT AFRESH IN CONFORMITY WITH THE TRIBUNAL ORDER FOR A.Y. 1995 - 96, WHEREAS THE LEARNED A.M. DECIDED THE ISSUE AGAINST THE ASSESSEE BY RELYING ON THE TRIBUNAL ORD ERS FOR THE A.Y.S 1996 - 97 AND 1997 - 98. AS SUCH, THE CONTENTION OF THE LEARNED A.R. THAT THE 5 DEDUCTION FOR PRIOR PERIOD EXPENSES BE ALLOWED BY THE THIRD MEMBER, CANNOT BE ACCEPTED, WHICH IS NEITHER THE CASE OF THE LD. JM OR LD. AM. 6. ADVERTING TO THE FACT S OF THE INSTANT CASE, IT IS SEEN THAT THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT PRIOR PERIOD EXPENSES BE ALLOWED. IN SUPPORT OF HIS CLAIM, THE ASSESSEE FURNISHED DETAILS OF SUCH PRIOR PERIOD EXPENSES. THE ASSESSING OFFICER, WITHOUT GOING INTO THE DETAILS OF SUCH EXPENSES, CAME TO HOLD THAT THESE WERE NOT DEDUCTIBLE IN THE LIGHT OF HIS VIEW TAKEN FOR THE EARLIER YEARS. THE TRIBUNAL IN ITS ORDER FOR THE A.Y. 1995 - 96 HAS HELD THAT UNDER THE MERCANTILE SYSTEM OF ACCOUNTING, ONLY THE EXPENSES ACCRU ING DURING THE YEAR ARE ALLOWED AS DEDUCTION IRRESPECTIVE OF THE YEAR IN WHICH PAYMENT IS MADE. IT FURTHER OBSERVED THAT EVEN IF THE EXPENSES PERTAIN TO THE PRECEDING YEARS BUT LIABILITY IS CRYSTALIZED IN THE CURRENT YEAR, THEN THE AMOUNT HAS TO BE ALLOWED AS DEDUCTION. IT FUTHER HELD THAT IF, HOWEVER, THE EXPENDITURE RELATES TO THE PRECEDING YEAR AND SIMPLY PAYMENT IS MADE IN THIS YEAR, THAT WOULD NOT BRING THE CASE WITHIN THE CONCEPT OF ACCRUAL OF LIABILITY EXPENSES. THAT IS HOW THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE ASSESSING OFFICER FOR TAKING A FRESH DECISION IN THE LIGHT OF THE ABOVE DIRECTIONS AFTER ALLOWING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WHEN I EXAMINE THE TRIBUNAL ORDER FOR A.YS. 1996 - 97 AND 1997 - 98, IT IS SEEN THAT THE DISA LLOWANCE HAS BEEN MADE BY CONSIDERING THE DETAILS OF SUCH EXPENSES. THE TRIBUNAL HAS CONSIDERED THE DETAILS OF SUCH EXPENSES AND THEN DECIDED AGAINST THE ASSESSEE. SINCE THE ASSESSING OFFICER IN 6 THE INSTANT YEAR DID NOT EXAMINE THE DETAILS OF SUCH EXPENSE S AND SIMPLY DISALLOWED BY RELYING ON THE TRIBUNAL ORDERS FOR THE A.YS. 1996 - 97 AND 1997 - 98, THE VIEW TAKEN BY THE LEARNED CIT(A) FOR SUSTAINING SUCH DISALLOWANCE, CANNOT BE ACCEPTED. IN MY CONSIDERED OPINION, THE DEDUCTIBILITY OF EXPENSES NEEDS TO BE TES TED ON THE TOUCHSTONE OF THE PRINCIPLE LAID DOWN BY THE TRIBUNAL IN ITS ORDER FOR THE A.Y. 1995 - 96 IN RESPECT OF EACH ITEM OF EXPENDITURE CLAIMED UNDER THE HEAD PRIOR PERIOD EXPENSES. AS THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE DETAILS OF EXPENSES , IN MY CONSIDERED OPINION, THE VIEW TAKEN BY THE LEARNED J.M. NEEDS TO BE UPHELD WITH A DIRECTION TO THE AO TO CONSIDER THE DEDUCTIBILITY OF EXPENSES AS PER THE VIEW TAKEN BY THE TRIBUNAL FOR A.Y. 1995 - 96. I THEREFORE, ANSWER THE QUESTION IN NEGATIVE BY H OLDING THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF PRIOR PERIOD EXPENSES. AS SUCH I AGREE WITH THE VIEW TAKEN BY THE LEARNED J.M. IN RESTORING THE MATTER TO THE FILE OF THE ASSESSING OFFICER INSTEAD OF THE LD. AM UPHOLDING T HE DISALLOWANCE. 7. THE SECOND POINT ON WHICH BOTH THE LEARNED MEMBERS HAVE DIFFERED IS ABOUT DEDUCTIBILITY OR OTHERWISE OF EXTRAORDINARY ITEMS. HERE AGAIN, BOTH THE LD. MEMBERS HAVE REFERRED THEIR SEPARATE QUESTIONS. IN MY CONSIDERED OPINION, THE CONTROVE RSY IS PROPERLY HIGHLIGHTED THROUGH THE FOLLOWING QUESTION : - WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS. 3,04,81,750/ - ON ACCOUNT OF DISALLOWANCE OF E XTRA ORDINARY ITEMS ?. 7 8. THE FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE CLAIMED DEDUCTION FOR A SUM OF RS. 304.82 LACS TOWARDS EXTRAORDINARY ITEMS WRITTEN OFF AS A RESULT OF THE CLOSURE OF DEGANA TUNGSTEN MINE. THE ASSESSING OFFICER HELD THAT SIN CE DEGANA MINES WERE CLOSED DURING THE YEAR, WHICH CONSTITUTED A DISTINCT BUSINESS, THE ASSESSEE WAS NOT ENTITLED TO WRITE OFF ITS ASSETS, BOTH FIXED ASSETS AND STOCK IN TRADE, AGAINST ITS PROFIT FROM REMAINING BUSINESS OF MINING AND MANUFACTURING ETC. WI THOUT GOING INTO THE DETAILS OF RS. 304.82 LACS, THE ASSESSING OFFICER DISALLOWED SUCH EXPENDITURE. THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE. WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL, THE LEARNED J.M. REVERSED THE ASSESSING OFFICERS OPINION THAT N O DEDUCTION COULD BE ALLOWED IN RESPECT OF A CLOSED BUSINESS AGAINST THE INCOME OF OTHER BUSINESSES WHEN ALL THE BUSINESSES CONSTITUTE A COMPOSITE BUSINESS. HE, THEREFORE, RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE DETAILS OF SUCH AMOUNTS WRITTEN OFF AND THEREAFTER CONSIDER THE ALLOWABILITY OR OTHERWISE OF SUCH EXPENSES. ON THE OTHER HAND, THE LEARNED A.M. ALSO CONCURRED WITH THE VIEW TAKEN BY THE LEARNED J.M. THAT THERE CAN BE NO QUESTION OF DENYING DEDUCTION OF EXPENSES O F A CLOSED BUSINESS AGAINST THE INCOME OF THE OTHER BUSINESSES, WHEN BOTH THE BUSINESSES FORM PART OF A COMPOSITE BUSINESS. HE, HOWEVER, EXAMINED THE DETAILS OF SUCH EXTRAORDINARY ITEMS AND CAME TO THE CONCLUSION THAT IT WAS IN THE NATURE OF CAPITAL LOSS A SSESSABLE U/S 45 OF THE ACT. THAT IS HOW, THE GROUND TAKEN BY THE ASSESSEE WAS DISMISSED. 8 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT BOTH THE LEARNED MEMBERS HAVE AGREED ON THE POINT THAT T HERE CAN BE NO BAR ON ALLOWING DEDUCTION OF EXPENSES IN RESPECT OF A CLOSED BUSINESS AGAINST THE INCOME OF OTHER BUSINESSES, WHEN IT IS A CASE OF COMPOSITE BUSINESS. BOTH THE LEARNED MEMBERS HAVE ALSO AGREED THAT IT WAS A CASE OF COMPOSITE BUSINESS AND HEN CE THE DEDUCTIBILITY OF EXPENSES COULD NOT BE MARRED BY SUCH CONSIDERATIONS. IT IS OBSERVED THAT THE ASSESSING OFFICER HAS BASED THE DISALLOWANCE OF EXPENDITURE SIMPLY ON THE GROUND THAT IT WAS IN RESPECT OF WRITTEN OFF AMOUNTS OF A CLOSED BUSINESS AND HEN CE NOT DEDUCTIBLE. IN VIEW OF THE ABOVE DECISION OF THE TRIBUNAL, THE FOUNDATION FOR THE AOS VIEW, DOES NOT STAND. THE AO DID NOT EXAMINE THE DETAILS OF SUCH EXPENSES AS TO WHETHER THESE WERE CAPITAL OR REVENUE. SINCE THE STAND TAKEN BY THE ASSESSING OF FICER HAS BEEN REJECTED BY BOTH THE LEARNED MEMBERS, IN MY CONSIDERED OPINION, THE PROPER COURSE SHOULD BE TO RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE DEDUCTIBILITY OR OTHERWISE OF SUCH AMOUNTS AS PER LAW. IT IS SIMPLE A ND PLAIN THAT THE APPELLATE AUTHORITIES ARE REQUIRED TO ADJUDICATE UPON THE ORDERS OF THE AUTHORITIES HAVING ORIGINAL JURISDICTION WHICH APPRECIATE THE MATERIAL AND THEN DECIDE ABOUT THE POINT. ADVERTING TO THE FACTS OF THE INSTANT CASE, I FIND THAT SINCE THE ASSESSING OFFICER DID NOT HAVE ANY OCCASION TO APPLY HIS MIND FROM THE PERSPECTIVE AS DISCUSSED ABOVE, IT WOULD BE MORE APPROPRIATE TO SEND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING DEDUCTIBILITY OF EXPENSES OR OTHERWISE AS P ER LAW, INSTEAD OF TAKING 9 UP THE DETAILS OF SUCH EXPENSES AND RENDERING DECISION AT THE TRIBUNALS END. I, THEREFORE, AGREE WITH THE VIEW TAKEN BY THE LEARNED J.M. ON THIS POINT AND HOLD THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLO WANCE OF RS. 3,04,81,750/ - ON ACCOUNT OF DISALLOWANCE OF EXTRA ORDINARY ITEMS. 10. THE NEXT POINT OF DIFFERENCE BETWEEN THE HONBLE MEMBERS IS ON THE DISALLOWANCE OF RS.6,88,62,383 MADE BY THE AO ON ACCOUNT OF MINES DEVELOPMENT EXPENSES. HERE AGAIN, BOT H THE LD. MEMBERS HAVE REFERRED THEIR SEPARATE QUESTIONS. IN MY CONSIDERED OPINION, THE CONTROVERSY IS PROPERLY HIGHLIGHTED THROUGH THE FOLLOWING QUESTION : - WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 568.07 LACS AND RS . 120.55 LACS ON ACCOUNT OF MINE DEVELOPMENT EXPENSES ? 11. THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE CLAIMED DEDUCTION OF RS. 6,88,62,383/ - TOWARDS MINE DEVELOPMENT EXPENSES. THE ASSESSING OFFICER DID NOT ALLOW THIS DEDUCTION BY RELYING ON THE VI EW TAKEN BY HIM FOR THE A.Y. 1997 - 97. HE HELD THAT MINE DEVELOPMENT EXPENSES WERE TO BE DEALT WITH AS PER SECTION 35E OF THE ACT AND HENCE THE ASSESSEES CONTENTION FOR ALLOWING DEDUCTION U/S 37(1) OF THE ACT WAS REJECTED. THE LEARNED CIT(A), AFTER CONS IDERING THE CERTAIN DECISIONS, HELD THAT THE ASSESSEES CASE WAS COVERED U/S 37(1) OF THE ACT IN SO FAR AS EXPENDITURE ON MINE UNDER PRODUCTION AT RS. 568.07 LACS WAS CONCERNED. AS REGARDS THE REMAINING AMOUNT OF RS. 125.38 LACS, THE 10 LEARNED CIT(A) HELD TH AT THIS INCLUDED A SUM OF RS. 4.73 LACS TOWARDS DEPRECIATION WHICH COULD NOT BE ALLOWED DEDUCTION. HE, THEREFORE, ALLOWED DEDUCTION OF THE SECOND COMPONENT FOR A SUM OF RS. 120.55 LACS. THE LEARNED J.M. UPHELD THE VIEW TAKEN BY THE LEARNED CIT(A) BY RELY ING ON THE DECISION TAKEN BY THE TRIBUNAL FOR THE A.Y. 1996 - 97. HOWEVER, THE LEARNED A.M. RESTORED THE QUESTION OF DEDUCTION AMOUNTING TO RS. 568.07 LACS TO THE LEARNED CIT(A) AND THE REMAINING DEDUCTION OF RS. 120.56 LACS TO THE ASSESSING OFFICER FOR DECI DING IT IN CONFORMITY WITH THE DECISION TAKEN BY THE TRIBUNAL FOR THE A.Y. 1996 - 97. 12. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE LEARNED J.M. HAS RELIED ON THE ORDER PASSED BY THE TRIBUNAL FO R THE A.Y. 1996 - 97 IN DELETING THE ADDITION. HOWEVER, ON PERUSAL OF THE TRIBUNAL ORDER FOR A.Y. 1996 - 97, IT IS SEEN THAT THE TRIBUNAL DID NOT DELETE THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER BUT RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFI CER FOR TAKING A FRESH DECISION IN CONFORMITY WITH THE DIRECTIONS GIVEN BY IT. AS THE LEARNED A.M. HAS ALSO RESTORED THE MATTER TO THE FILE OF LEARNED CIT(A)/ASSESSING OFFICER, I FIND MYSELF IN AGREEMENT WITH THE VIEW TAKEN BY THE LEARNED A.M. IN RESTORIN G THE MATTER TO THE AUTHORITIES BELOW. THE OBVIOUS REASON IS THAT FOR THE IMMEDIATELY PRECEDING TWO YEARS, THE TRIBUNAL HAS RESTORED THE MATTER AND THE LD. AM HAS FOLLOWED SUCH VIEW. THERE CAN BE NO QUESTION OF DEVIATING FROM THE OPINION EXPRESSED BY THE TRIBUNAL ON THIS ISSUE IN EARLIER YEARS. AS THE ORDERS OF THE TRIBUNAL FOR EARLIER TWO YEARS HAVE NOT BEEN 11 MODIFIED BY THE HONBLE HIGH COURT, I WOULD PREFER TO GO WITH THE WISDOM OF THE DIVISION BENCH FOR THE EARLIER TWO YEARS. IN THE FINAL ANALYSIS, I A GREE WITH THE VIEW TAKEN BY THE LEARNED A.M. AND HOLD THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 568.07 LACS AND RS. 120.55 LACS ON ACCOUNT OF MINE DEVELOPMENT EXPENSES. 13. THE LAST POINT OF DIFFERENCE BETWEEN THE HON BLE MEMBERS IS ON THE ADDITION OF WELFARE EXPENSES U/S 40A(9) AMOUNTING TO RS.3.5 CRORE. HERE AGAIN, BOTH THE LD. MEMBERS HAVE REFERRED THEIR SEPARATE QUESTIONS. IN MY CONSIDERED OPINION, THE CONTROVERSY IS PROPERLY HIGHLIGHTED THROUGH THE FOLLOWING QUES TION : - WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 3.50 CRORES MADE BY THE ASSESSING OFFICER U/S 40A(9) OF THE ACT. 14. THE ASSESSING OFFICER MADE D ISALLOWANCE U/S 40A(9) OF THE ACT AMOUNTING TO RS. 3.50 CRORES. THE LEARNED CIT(A) DELETED THIS DISALLOWANCE. WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL, THE LEARNED J.M. OBSERVED THAT THE TRIBUNAL HAS DECIDED THIS ISSUE IN ASSESSEES FAVOUR FOR THE A.Y. 1990 - 91. IT WAS FURTHER SEEN THAT THE TRIBUNAL FOR THE A.Y. 1996 - 97 RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSING OFFICER, IN TURN, ALLOWED THE DEDUCTION. HE ALSO OBSERVED THAT THE TRIBUNAL FOR THE A.Y. 1997 - 98 HAS RESTORED TH E MATTER FOR FRESH DECISION. IN THE LIGHT OF THE ABOVE FACTS, THE LEARNED J.M. PROPOSED TO DELETE THE ADDITION. ON THE OTHER HAND, THE LEARNED A.M., FOLLOWING THE ORDERS FOR A.YS. 1996 - 97 AND 1997 - 98, REMITTED THE MATTER TO THE FILE OF THE ASSESSING 12 OFFIC ER FOR A FRESH DECISION IN CONFORMITY WITH THE VIEW TAKEN BY THE TRIBUNAL FOR SUCH YEARS. 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, I FIND THAT THE TRIBUNAL FOR THE IMMEDIATELY TWO PRECEDING ASSESSMENT Y EARS HAS RESTORED THE MATTER WITH THE NECESSARY DIRECTION. IT IS ALSO SEEN THAT SUCH DISALLOWANCE CAME UP FOR CONSIDERATION BY THE HONBLE HIGH COURT IN ASSESSEES OWN CASE FOR A.Y. 1994 - 95. THE HONBLE HIGH COURT ALSO REMITTED THE MATTER FOR FRESH CONSIDE RATION. IN VIEW OF THE FACT, THAT THE HONBLE HIGH COURT FOR THE A.Y. 1994 - 95 AND THE TRIBUNAL FOR THE A.YS. 1996 - 97 AND 1997 - 98 HAVE SENT THE MATTER BACK, I AM OF THE CONSIDERED OPINION THAT THE LEARNED A.M. WAS JUSTIFIED IN FOLLOWING THE PRECEDENTS BY RE MITTING THE MATTER FOR FRESH DECISION TO BE DECIDED IN CONFORMITY WITH THE VIEW EXPRESSED BY THE TRIBUNAL FOR IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS. I THEREFORE, AGREE WITH THE VIEW TAKEN BY THE LEARNED A.M. AND HOLD THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 3.50 CRORES MADE BY THE ASSESSING OFFICER U/S 40A(9) OF THE ACT. 16. THE REGISTRY OF THE TRIBUNAL IS DIRECTED TO LIST THIS MATTER BEFORE THE DIVISION BENCH FOR PASSING AN ORDER IN ACCORDANCE WITH THE MAJORIT Y VIEW. SD/ - (R.S. SYAL) ACCOUNTANT MEMBER JAIPUR DATED: 22 ND JULY 2014 * RANJAN 13 COPY FORWARDED TO: - 1. M/S. HINDUSTAN ZINC LTD. , UDAIPUR 2. THE ADDL. CIT (ASSTT.), SPECIAL RANGE, UDAIPUR/ JCIT, RANGE - 2, UDAIPUR 3. THE LD . CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO. 224/JU/2004) BY ORDER AR ITAT, JAIPUR