ACIT,CIRCLE-2, Nagpur V. MANGANESE ORE (INDIA) LTD, Nagpur

ITA 438/NAG/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1017 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: HIMESH DEMBLE
• Keywords: Question of law
• Section: 143(3)

Judgement Text

1 ITA NO. 438/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO. 4 38 /NAG/20 13 ASSESSMENT YEAR : 20 10 - 11 . ASSTT. COMMISSIONER OF INCOME - TAX, MANGANESE ORE ( INDIA ) LTD., CIRCLE - 2, NAGPUR. V/S. MOUNT ROAD EXTENSION, SADAR, NAGPUR. PAN AAACM 8952A. (APPELLANT) RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI H IMESH DEMBLE. DATE OF HEARING : 1 3 - 07 - 2015 DATE OF PRONOUNCEMENT : 17 TH JULY, 2015. O R D E R PER SHRI MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 19 - 09 - 2013 . REVENUE HAS RAISED THE FOLLOWING GROUND S : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN ALLOWING MINE CLOSURE EXPENDITURE WITHOUT APPRECIATING THE FACT THAT THE EXPENDITURE CLAIMED WAS BY WAY OF A PROVISION AND BY NATURE OF CONTINGENT EXPENDITURE ONLY. 2 ITA NO. 438/NAG/2013 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN DELETING THE ADDITION IN VIEW OF THE RULES UNDER THE MINERAL REVISION AND DEVELOP0MENT AS THEY DO NOT SUPERSEDE THE PROVISIONS UNDER THE INCOME TAX ACT OR RULES OF ACCOUNTANCY RECOGNIZED UNDER THE I.T. ACT. 2. AFTER HEARING THE SUBMISSIONS OF BOTH T HE SIDES AND CONSIDERING THE FACTS AS STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 7 TH JANUARY, 2013 DISALLOWING THE MINE CLOSURE EXPENDITURE OF ` .73,25,532/ - , WE HAVE BEEN INFORMED THAT IN PAST FOR ASSESSMENT Y EAR 2009 - 10 IN ASSESSEES OWN CASE, THE ITAT, NAGPUR BENCH IN ITA NO. 144/NAG/2013 VIDE ORDER DATED 15 TH MAY, 2015 HAS HELD AS UNDER : 4. WE FIND THAT THE LEARNED CIT(APPEALS) HAS FOLLOWED THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006 - 07. LEARNED CIT(APPEALS) HELD AS UNDER : IN THEIR ORDER PASSED ON 10.10.2012 IN ITA NO. 01/NAG/2010 FOR A.Y. 2006 - 07 IN THE APPELLANTS OWN CASE ON THE SAME ISSUE, THE ITAT, NAGPUR BENCH HAS HELD WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. IN OUR OPINION, THE PROVISION MADE BY THE ASSESSEE REPRESENT THE LIABILITY ACCRUED IN VIEW OF RULE 23A, 23B & 23C OF THE MINERAL REVISION AND DEVELOPMENT RULE, A COY OF WHICH WAS FILED BEFORE US. UNDER THESE RULES, MINING COMPANY IS REQUIRED TO SUBMIT PROGRESSIVE MINE CLOSURE PLAN AND FINAL MINE CLOSURE PLAN TO THE IBM FOR ITS APPROVAL. AN APPROVAL FROM THE REGIONAL CONTROLLER OF MINES IS TO BE OBTAINED IN THIS REGARD AND ONLY THERE AFTER THE LI ABILITY SHALL BE TREATED AS HAVING ARISEN TO THE ASSESSEE, MERELY THAT THE QUANTUM OF LIABILITY IS NOT CERTAIN THAT WILL NOT POSTPONE THE ACCRUAL OF THE LIABILITY. THE BASIS OF CALCULATION OF PROVISIONS MADE BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE. UNDER THESE FACTS, IN OUR OPINION, NO INTERFERENCE E IS CALLED FOR IN THE ORDER OF THE CIT(A) AND CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THIS IS NOT A FIT CASE, WHICH WARRANT OUR INTERFERENCE. WE ACCORDINGL Y DISMISS THE GROUND TAKEN BY THE REVENUE AND CONFIRM THE ORDER OF THE CIT(A). RESPECTFULLY FOLLOWING ORDER 3 ITA NO. 438/NAG/2013 OF THE ITAT THE APPELLANTS OWN CASE, THE GROUNDS ARE ALLOWED AND THE ADDITION IS DELETED. WE FIND THAT THE AFORESAID DECISION OF THE ITAT WAS AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT. IN AN INCOME TAX APPEAL NO.9 OF 2013 , THE HONBLE HIGH COURT HAD HELD AS UNDER : PERUSED THE JUDGMENT OF THE HONBLE APEX COURT REPORTED IN THE CASE OF BHARAT EARTH MOVERS V/S. COMMISSIONER OF INC OME TAX, REPORTED IN (2000) 245 ITR 428 (SC). THE FACTS SHOW THAT PROGRESSIVE MINE CLOSURE PLAN IS REQUIRED TO BE SUBMITTED AT THE TIME OF OBTAINING LEASE OR AT THE TIME OF SEEKING ITS RENEWAL AND THE FINAL CLOSURE PLAN IS REQUIRED TO BE SUBMITTED ON E YEAR IN ADVANCE OF PROPOSED CLOSURE. REFILLING OF MINE EXCAVATED CAN BE ONLY AT ONE STAGE, BUT THEN THE LIABILITY IS INCURRED ON THAT ACCOUNT EVERY YEAR AS EXCAVATION IS SPREAD OVER FOR ENTIRE PERIOD OF LEASE. THE PROVISION MADE, THEREFORE, HA S BEEN RIGHTLY APPRECIATED BY C.I.T. AND BY I.T.A.T. THE JUDGMENT OF HONBLE APEX COURT (SUPRA) LEAVES NO MANNER OF DOUBT ABOUT THE CORRECTNESS OF SAID APPROACH. NO SUBSTANTIAL QUESTION OF LAW ARISES. 5. SINCE THE ISSUE IS SQUARELY COVERED BY THE HONBLE HIGH COURT DECISION, WE AFFIRM THE ORDER OF LEARNED CIT(APPEALS). 3 . SINCE THE JURISDICTIONAL HIGH COURT IN TAX APPEAL NO. 2 OF 2013 ORDER DATED 8 TH AUGUST, 2013 IN AN APPEAL TITLED AS CIT V/S. MANGANES E ORE (INDIA) LTD., 4 ITA NO. 438/NAG/2013 NAGPUR HAS TAKEN A VIEW THAT THE PROVISION WAS IN RESPECT OF REFILLING OF MINE WHICH WAS EXCAVATED, HENCE AN ALLOWABLE CLAIM. SINCE A VIEW HAS ALREADY BEEN TAKEN, THEREFORE, RESPECTFULLY FOLLOWING THE SAME FOR THIS YEAR AS WELL, WE HE REBY DISMISS THIS GROUND OF THE REVENUE. 4 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JULY, 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 17 TH JULY, 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE