M/s Balaji Mines and Minerals Private Limited, Panaji V. Assistant Commissioner of Income Tax, Circle - 1, Margao, Margao

ITA 324/PAN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7719 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 29-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: P J PARDIWALLA
• Keywords: Revenue expenditure
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI SHAMIM YAHYA , A M AND SHRI RAM LAL NEGI , J M ITA NO. 324 / PAN . / 2017 (ASSESSMENT YEAR: 2008 - 09 ) M/S. BALAJI MINES AND MINERALS PRIVATE LIMITED SALGAOCAR BHAVAN, ALTINHO, PANAJI, GOA - 403 001 VS. ASST. CIT - 1, MARGAO RANGE, GOA PAN/GIR NO. AAACB 7003 P ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI P. J. PARDIWALLA RESPONDENT BY : SHRI Y. V. RAVIRAJ DATE OF HEARING : 15.11.2018 DATE OF PRONOUNCEMENT : 14.01 .2019 O R D E R PER SHAMIM YAHYA, A. M.: TH IS IS AN APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PAN A JI , PERTAINING TO ASSESSMENT YEAR 200 8 - 0 9 . 2. THE GROUND S OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. I. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF COMPENSATORY AFFORESTATION EXPENDITURE RS. 4,31,215 MADE BY THE ASSESSING OFFICER BY HOLDING THAT SUCH EXPENDITURE WAS TOWARDS ACQUIRING A RIGHT OF ENDURING NATURE EVEN WHEN NO RIGHT TO LAND W AS TRANSFERRED TO THE APPELLANT . II. IN DOING SO, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT SUCH EXPENDITURE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE APPELLANT'S BUSINESS BY FACILITATING APPELLANT'S TRADING OPERATIONS AND HENCE A REVENUE EXPENDITURE ALLOWABLE U/S. 37 OF THE I TA. 3. B RIEF FACTS OF THE CASE ARE THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER (A.O. FOR SHORT) H AS TREATED THE COMPENSATORY AFFORESTATION EXPENDITURE INCURRED BY THE ASSESSEE AS CAPITA L EXPENDITURE AND HAS DISALLOWED TH E SAME. THE EXPENDITURE WAS IN THE NATURE OF CLEARANCE WHICH LED TO A SHORTER APPROACH ROAD . THE LEARNED CIT - A HAS ALSO UPHELD THE A.O.S ACTION, HOWEVER , HE ALLOWED THE DEPRECATION AT THE RATE OF 10% . 2 ITA NO .324 /PAN./2017 4 . A GAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE US. 5 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE PAYMENT BY THE ASSESSEE TO FOREST DEPARTMENT FOR THE COMPENSATORY AFFORESTATION IS A REVENUE EXPENDITURE, HE SUBMITTED THAT THE SAME HAS BEEN SO HELD BY ITAT AS WELL AS THE HON'BLE BOMBAY HIGH COURT AT GOA ( IN T AX A PPEAL NO. 66 OF 2012 ) IN THE CASE OF DY. CIT VS. TI MBLO PVT. LTD. VIDE ORDER DATED 5/11/12. 6 . PER CONTRA , THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) RELIED UPON THE ORDER'S OF AUTHORITIES BELOW. 7 . UPON CAREFUL CONSIDERATION WE FIND THAT THE ISSUE IS DULY COVERED IN FAVOUR OF THE ASSESSEE BY THE HONBLE HIGH COURT DECISIONS CITED ABOVE. ACCORDINGLY , WE SET ASIDE ORDER'S OF AUTHORITIES BELOW AND DECIDE THE ISSUE IN F AVOUR OF ASSESSEE. 8 . IN THE RESULT , TH IS APPEAL BY THE ASSESSEE STANDS ALLOWED . O RDER PRONOUNCED BY LISTING THE RESULT ON THE NOTICE BOARD OF THE BENCH UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES, 1963. SD/ - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER DATED : 14.01.2019 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, PANJI CITY CONCERNED; (5) THE DR, ITAT, PANJI ; (6) GUARD FILE . BY ORDER ROSHANI , SR. PS ( SR. P.S. / P.S. ) ITAT