Deputy Commissioner of Income tax, Circle-3(1), Raipur V. Mesers Chhattisgarh Captive Coal Mining Limited, Raipur

ITA 6/RPR/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9964 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 09-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMIT M JAIN
• Keywords: Depreciation; Question of law; Revenue expenditure
• Section: 37; 115JB

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 06/RPR/2020 Ǔनधा[रण वष[ / Assessment Year : 2015-16 The Deputy Commissioner of Income Tax, Circle-3(1), Raipur (C.G.) .......अपीलाथȸ / Appellant बनाम / V/s. M/s. Chhattisgarh Captive Coal Mining Ltd. J-10, Near TV Tower, Anupam Nagar, Raipur (C.G.) PAN : AACCC7481N ......Ĥ×यथȸ / Respondent Assessee by :Shri Amit M Jain, Advocate Revenue by :Shri P.K Mishra, CIT-DR स ु नवाई कȧ तारȣख / Date of Hearing :29.07.2022 घोषणा कȧ तारȣख / Date of Pronouncement :23.09.2022 2 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the department is directed against the order passed by the CIT(Appeals)-I, Raipur dated 01.10.2019, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-Tax Act, 1961 (for short ‘the Act’) dated 30.11.2017 for assessment year 2015-16. Before us the department has assailed the impugned order on the following grounds of appeal: “1. Whether on the facts and circumstances of the case Ld. CIT(A) is justified in deleting the disallowance of Rs.5,67,03,833/- on account of preoperative expenses written off during the year, ignoring the provisions of section 35D of the I.T Act, 1961. 2. The order of the CIT(A) is erroneous on facts. 3. Any other ground that may be adduced at the time of hearing.” 2. Succinctly stated, the assessee company is a special purpose Joint Venture company (SPV) comprising of five members, viz. M/s. Godawari Power & Ispat Ltd., Shri Bajrang Power & Ispat Ltd., M/s. Vandana Global Ltd., M/s. Ind Synergy Ltd and M/s. Shree Nakoda Ispat Ltd. and was incorporated for operation of coal mines that were allocated by the Ministry of Coal vide its letter No.13016/34/2005- CA-I dated 13.01.2006 for captive use of coal by the joint venture 3 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 member companies. The return of income for the year assessment year 2015-16 was filed by the assessee company on 23.09.2015, declaring its income under the normal provisions at Rs. Nil a/w. C/forward of current years loss of (-) Rs. 5,30,40,235/-. Book profit u/s 115JB was reflected by the assessee at (-) Rs. 5,30,97,694/-. Subsequently, the case of the assessee was selected for limited scrutiny for the purpose of verifying “large other expenses” claimed in its profit & loss account. 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee company was incorporated for the purpose of operation of coal mines which were allocated to the joint venture members for captive use by them. It was observed by the A.O that the Hon’ble Supreme Court had even prior to the start of the business operations by the assessee company i.e at a time when the latter was in the process of obtaining clearances from the government departments for operation of the coal mines, vide its order dated 24.09.2014 cancelled all the allocations of coal blocks since 1993. It was observed by the A.O that for the aforesaid reason the operations of the company could not be started till the end of the year under consideration. 4 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 4. On a perusal of the records, it was observed by the A.O that the assesee company had debited in its profit & loss account an amount of Rs.5,67,03,833/- towards pre-operative expenses that were written-off during the year under consideration. On being queried as regards the allowability of the aforesaid expenses as a deduction, it was submitted by the assessee that it was allocated coal block i.e. Nakia I & II coal block by the Ministry of Coal vide its letter No.13016/34/2005-CA-I, dated 13.01.2006 for captive use of coal by Joint Venture Members companies. It was submitted by the assessee that subsequently the Ministry of Coal had de-allocated the coal block vide its letter dated 17.02.2014. It was stated by the assessee that though the assessee company had thereafter filed a petition before the Hon’ble High Court of Delhi and obtained a stay order dated 18.02.2014, but the same was of no avail as the Hon’ble Supreme Court had thereafter vide its order dated 24.09.2014 cancelled all the allocated coal blocks since 1993, though with a . It was further stated by the assessee that the Hon’ble Supreme Court had allowed a liberty to the assessee to file a suitable petition for reimbursement of expenses that were incurred on development of the coal block that was allocated to it. Elaborating on its claim for 5 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 deduction of pre-operative expenses that were written-off during the year to the extent of Rs.5,67,03,833/-, it was the claim of the assessee that as the very object of the assessee company of operation of coal block had been vitiated pursuant to the aforesaid order of the Hon’ble Supreme Court dated 24.09.2014, therefore, the unrealizable pre-operative expenses were as per the decision of the management written-off during the year under consideration. It was submitted by the assessee that it had since its incorporation i.e. over the period F.Y.2006-07 to F.Y.2013-14 incurred pre-operative expenses of Rs.13,50,78,957/-, out of which expenses which were in the nature of revenue expenditure were written-off and claimed as deduction during the year under consideration as its very object of operation of coal block was vitiated pursuant to the aforesaid order of the Hon’ble Apex Court. Bifurcated details of the pre-operative expenses that were incurred by the assessee company since its incorporation a/w. details of expenses which were written-off during the year under consideration were furnished by the assessee as under: 6 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 5. Elaborating on the reasons as to why its claim of pre-operative expenses of Rs.5,67,03,833/- that were written-off during the year under consideration were not liable to be disallowed, it was submitted by the assessee, as under: “In reference to show cause why project & preoperative expenses at Rs.5,67,03,833/- written off during the year should not be disallowed, assessee submits as under for consideration of your honor:- 7 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 1. Special Purpose Joint venture Company was incorporated for operation of Coal Mines allocated by Ministry of Coal vide letter No. 13016/34/2005-CA-I dt. 13.01.2006 for captive use of Coal by the Joint venture Member Companies. 2. The Company was set-up and steps taken for commencement of Coal Mines for captive consumption of Coal by the Joint Venture Members in their existing as well as proposed expansion of Sponge Iron Plants. 3. Company was incorporated in the year 2005-06, raised capital, Coal Block was allocated vide letter dt. 13th January, 2006. 4. Company was purchased Geological Report with cost of Rs. 40067512/- in August 2007. Thus, business activity for the commencement of business had practically started. 5. During the year Honorable Supreme Court of India has cancelled all Coal Blocks allocated since 1993 vide order dt. 24.09.2014. 6. Due to the order of Honorable Supreme Court, the project had to be abandoned in the year of order i.e. F.Y. 2014-15. The abandonment of the project was not because of any lapse on the part of the assessee but was due to reasons beyond control of the assessee. 7. The activity was within the parameter of Memorandum and Articles of Association of Company_ as well as letter of allocation of cola block issued by Ministry of Coal. 8. The Project &' preoperative Expenses written off during the year consists of expenditures incurred was towards revenue judicial expenses and not towards any investment or purchases of the assets or Machinery.” 6. The AO after considering the aforesaid facts in the backdrop of the reply filed by the assessee company was however not inclined to accept the same. It was observed by the A.O that as the aforesaid expenditure was incurred by the assessee prior to the commencement of its business, therefore, as per the mandate of Section 35D of the Act, 1/5 th of the aforesaid expenditure was to be 8 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 allowed as a deduction in each of the five successive previous years beginning with the previous year in which its business would commence. Observing, that as the business operation of the assessee company had yet not commenced, the A.O, thus, disallowed the assessee’s claim for deduction of pre-operative expenses of Rs.5,67,03,833/- and added back the same to its returned income. Accordingly, the A.O vide his order passed u/s.143(3), dated 30.11.2017 determined the income of the assessee company under the normal provisions at Rs.36,63,598/- a/w. book profit u/s.115JB of the Act at Rs.(-) 5,30,97,694/- (i.e as returned). 7. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). The CIT(Appeals) after deliberating at length on the issue in question i.e. allowability of the assessee’s claim for deduction of pre-operative expenses of Rs.5,67,03,833/- found favor with the contentions advanced by the assessee. It was noticed by the CIT(Appeals) that the expenses which were written-off by the assessee company during the year were routine and general expenses which werein the nature of revenue expenses and not those incurred towards making of any investment or purchase of asset or machinery. It was further observed by the CIT(Appeals) that the 9 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 project in question i.e. operation of coal mines allocated to the joint venture companies for captive use of coal by its members had failed to commence its production only because of cancellation of the coal block pursuant to the order of the Hon’ble Supreme, and not on account of any unilateral act of the assessee.It was further observed by the CIT(Appeals) that no new business was commenced by the assessee where the assets of the abandoned business were put to use. Also, it was observed by the CIT(Appeals) that the triggering of section 35D of the Act by the A.O in the case of the assessee company was clearly based on an incorrect application of law. The CIT(Appeals) was of the view that the provisions of section 35D would come into play only when the commencement of the business takes place and accordingly, the assessee was therein to be allowed deduction of an amount equal to 1/10 th of such expenditure for each of the ten successive years beginning with the previous year in which the business commences; or as the case may be, the previous year in which the extension of the undertaking was completed or the new unit commenced its production or operation. Considering the totality of facts and circumstances of the case before him the 10 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 CIT(Appeals) vacated the disallowance of the assessee’s claim for deduction of pre-operative expenses amounting to Rs.5,67,03,833/-. 8. The revenue being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 9. We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 10. Ostensibly, the assessee company is a special purpose Joint Venture company (SPV) comprising of five members,viz. M/s. Godawari Power & Ispat Ltd., M/s Shri Bajrang Power & Ispat Ltd., M/s Vandana Global Ltd., M/s. Ind Synergy Ltd and M/s. Shree Nakoda Ispat Ltd., which was incorporated for operation of coal mines that were allocated by the Ministry of Coal vide its letter No.13016/34/2005-CA-I, dated 13.01.2006 for captive use of coal by the joint venture member companies. However, the Hon’ble Supreme Court had vide its order dated 24.09.2014 cancelled all the allocated coal block since 1993, though with a liberty to the assessee company 11 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 to file suitable petition for reimbursement of expenditure that were incurred on development of the coal block that was allocated to it. As the assessee’s project pursuant to the aforesaid order of the Hon’ble Supreme Court was abandoned not on account of any unilateral act on the part of the assessee company, but because of the aforesaid order of the Hon’ble Apex Court, therefore, its business had never commenced. In sum and substance, the abandonment of the project of the assessee company was beyond its control. Considering the aforesaid facts the assessee company had out of its pre-operative expenditure of Rs.13.50 crore (approx.) that were incurred since its incorporation i.e. over the period F.Y. 2006-07 to F.Y.2013-14, therein written-off expenses which were in the nature of routine expenses, viz. salary, wages, travelling expenses, office expenses etc. amounting to Rs.5,67,03,833/-, and had claimed deduction of the same in its return of income for the year under consideration i.e. A.Y.2015-16. As observed by us hereinabove, the A.O being of the view that as the business of the assessee had yet not commenced, therefore, the aforesaid expenditure being in the nature of pre- operative expenses were only to be allowed as a deduction in each of the five successive previous years beginning with the previous year in 12 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 which its business would commence, had thus disallowed its aforesaid claim for deduction of the expenses in question. 11. On appeal, the CIT(Appeals) on the basis of his exhaustive deliberations as regards the issue in hand i.e. allowability of the assessee’s claim for deduction of pre-operative expenses which were in the nature of revenue expenditure, had after considering the fact that the project in itself was abandoned not on account of any unilateral act of the assessee but pursuant to the order of the Hon’ble Apex Court, thus, found favor with its claim for deduction of the same and allowed the same. For the sake of clarity the relevant observations of the CIT(Appeals) are culled out as under: “6. I have considered the grounds of appeal gone through the submissions of the appellant and seen the order of the AO. The appellant is a joint venture company consisting of 5 member companies i.e. M/s Godavari Power & Ispat Ltd., Shri Bajrang Power & Ispat Ltd., Vandana Global Ltd., M/s Ind Synergy Ltd. and M/s Shree Nakoda Ispat Ltd. The main object of the joint venture was to operate coal mining and use them for captive purposes by the member companies. From the joint venture group it can be been seen that the appellant is integrated with steel manufacturing and production companies and for which coal was required as a source of fuel and energy. The coal mines were operated for captive purposes to provide power to the joint venture companies engaged in steel production and not for the purpose of trading in coal. The business of the appellant failed to commence production because of the orders of the hon'ble Supreme Court which canceled allotment of all coal blocks since 1993. This found reference in the Gazette of India published on 30th March 2015 by the Ministry of Law and Justice which reads as under: 13 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 THE COAL MINES (SPECIAL PROVISIONS) ACT, 2015 NO. 11 OF 2015 [30th March, 2015.] An Act to provide for allocation of coal mines and vesting of the right, title and interest in an over the land and mine infrastructure together with mining leases to successful bidders and allottees with the view to ensure continuity in coal mining operations and production of coal, and for promoting optimum utilization of coal resources consistent with the requirement of the country in national interest and for matters connected therewith or incidental thereto. Whereas the Supreme Court vide judgment dated 25th August, 2014 read with its order dated 24th September, 2014 has cancelled the allocation of coal blocks and issued directions with regard to such coal blocks and the Central Government in pursuance of the said directions has to take immediate action to implement the said order; AND WHEREAS it is expedient in public interest for the Central Government to take immediate action to allocate coal mines to successful bidders and allottees keeping in view the energy security of the country and to minimize any impact on core sectors such as steel, cement and power utilities, which are vital for the development of the nation; 6.1 The project was abandoned as the coal block was canceled by the hon'ble Supreme Court. It was not a unilateral act by the appellant whereby he had discontinued the project on his own accord rather it was because of the court orders that the project never commenced any business. No new business was commenced by the appellant where the assets of the abandoned business were put to use. From the items of expenditure which were reproduced by the AO in the assessment order and incorporated herein above it can be seen that expenditure written off are expenses connected with the setting up of the business of the appellant and are routine and general items of expenses. They are not capital expenditure which have given the appellant enduring benefit because of which it has become competitive and has scored an edge over others in the similar line of business. By incurring this expenditure no new asset has come into existence which has given the appellant an enduring advantage. On the contrary the business of the appellant has closed down and as a result the source of income has ceased to exist. This may have adversely affected other business in the joint venture group. I have not come across any instance where assets from the closed unit where deployed elsewhere. 14 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 6.2 The provisions of section 35D applied against the appellant in my opinion is an incorrect application of law and contrary to the facts and circumstances of the case. The impugned provisions come into force when the commencement of business takes place. The provisions apply to conditions that the business has commenced and accordingly the assessee shall be allowed a deduction of an amount equal to 1/10th of such expenditure for each of the ten successive years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the undertaking is completed or the new unit commences production or operation. These are not the facts in the present case whereas stated earlier the business of the appellant never commenced production but had to close down by order of the hon'ble Apex court. Coming to the provisions of Section 37 of the Act relied upon by the appellant for its claims it was held in the case of CIT vs. Woodward Governor India (P) Ltd. reported in (2009) 312 ITR 0254 (SC) the word "expenditure" is not defined in the 1961 Act. The word "expenditure" is, therefore, required to be understood in the context in which it is used. Sec. 37 enjoins that any expenditure not being expenditure of the nature described in as. 30 to 36 laid out or expended wholly and exclusively for the purposes of the business should be allowed in computing the income chargeable under the head "Profits and gains of business". In ss. 30 to 36, the expression "expenses incurred" as well as "allowances and depreciation" has also been used. For example, depreciation and allowances are dealt with in s. 32. Therefore, Parliament has used the expenses "any expenditure" in s. 37 to cover both. Therefore, the expression "expenditure" as used in s. 37 may, in the circumstances of a particular case, cover an amount which is really a "loss" even though the paid amount has not gone out from the pocket of the assessee. 6.3 I also observe that only those expenses have been written off which were incurred towards routine and general expenses which are revenue expenses in nature and not towards any investment or purchase of asset or machinery. Out of total expenditure incurred by the appellant in preoperative stage was Rs.13.50 crores out of which only Rs.5,67,03,833/- have been written off. The expenditure written off as can be seen from the items of expenditure tabulated hereinabove and also reproduced by the AO in the assessment order pertain to salary, wages, travelling expenses, office expenses and so on. The appellant has relied on various case laws in support of its claim that the expenses written off are revenue and not capital. I agree that the business which the appellant proposed to set up was directly related with the existing business of the members of the joint venture and the expenditure written off has the ingredients of being revenue in nature and not capital. The Hon'ble High Court of 15 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 Delhi in the case of Indo Rama Synthetics (I) Ltd. vs. CIT [185 TAXMAN 0277) held that the unit, which the appellant proposed to set up had inextricable linkage with the existing business of the appellant. The proposed business was not an individual business but vertical expansion of the present business. Thus, test of existing business with common administration and common fund is clearly met. Since the project was abandoned, no new asset also come to be created. 6.4 Considering the facts and circumstances of the case and the decisions of the courts discussed supra and the provisions of law I am of the opinion that the disallowance made by the AO is not on sound footing and hence the appeal deserves to be allowed. In the result the appeal is allowed.” 12. We have deliberated at length on the aforesaid issue in hand, and find substance in the view taken by the CIT(Appeals) that in the backdrop of the peculiar facts involved in the case of the assessee, its claim for deduction of the expenditure which was clearly in the nature of routine revenue expenses was duly allowable during the year under consideration. Admittedly, as observed by the CIT(Appeals) and, rightly so, the project of the assessee company was abandoned, as the coal block which was earlier allocated to it was cancelled pursuant to the order of the Hon’ble Supreme Court and not on account of any unilateral act of the assessee to discontinue the same. Also, it is a matter of fact borne from record that no new business was commenced by the assessee company where the assets of the abandoned business were deployed. Also, there is no denial of 16 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 the fact that the expenditure in question incurred in connection with the setting up of the business of the assessee company was in the nature of routine and general items of expenses and not in the nature of any capital expenditure. Considering the fact that the business of the assessee company had yet not commenced, the A.O treating the expenditure in question as pre-operative expenditure, which as per him was to be allowed as a deduction over the years after the commencement of its business, had thus, for the said reason declined its claim for deduction of the same during the year under consideration. On the basis of our aforesaid deliberations, we concur with the view taken by the CIT(Appeals) that now when the project of the assessee company had been abandoned not due to any unilateral decision on its part, but due to the cancelation of the coal block pursuant to the order of the Hon’ble Supreme Court dated 24.09.2014 i.e during the year under consideration, therefore, not remaining oblivion of the fact that the assessee company in the times to come would have no occasion to claim deduction of the expenditure in question because the project having been abandoned would not proceed any further, therefore, the expenditure therein incurred towards routine expenses being in the nature of revenue 17 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 expenditure was rightly claimed as a deduction by the assessee during the year. Our aforesaid view that the revenue expenditure incurred by the assessee qua its project which was abandoned pursuant to the order of the Hon’ble Supreme Court dated 24.09.2014 i.e. during the year under consideration would be allowable as a revenue expenditure is fortified by the judgment of the Hon’ble High Court of Calcutta in the case of M/s. Binani Cement Ltd. Vs. Commissioner of Income Tax, 380 ITR 116 (Cal.). In the case before he Hon’ble High Court the assesee company had claimed deduction of expenditure as regards a project which was abandoned on being found to be unviable. Considering the fact that the expenditure incurred by the assessee was towards capital work-in- progress that would be entitled for depreciation after its completion and commencement of its use for business purpose, the AO was of the view that since that stage was yet not reached and no asset had came into existence, therefore, the claim for deduction of such capital work-in-progress that was written-off by the assessee during the year did not merit acceptance. On appeal, the CIT(Appeals) concluded that now when the construction/acquisition of the new project was abandoned at the work-in-progress stage itself, thus, the 18 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 expenditure would not result into any enduring advantage to the assessee, and thus, the same having been written-off by the assessee was allowable as a deduction during the year under Sec. 37 of the Act. On further appeal by the revenue, the Tribunal held that as the expenditure was incurred in the earlier years, therefore, the same could not be allowed as a deduction during the year under consideration. Challenging the order of the Tribunal the assessee had carried the matter before the Hon’ble High Court, raising the following substantial question of law: “Whether the Tribunal substantially erred in law in disallowing the expenditure allegedly incurred by the assessee for preparation of the feasibility study report and capital-work-in-progress in the earlier years, but written off during the previous year corresponding to the assessment year 2002-03 since the proposed project was abandoned?" The Hon’ble High Court after, inter alia, relying on the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Gajapathy Naidu (1964) 53 ITR 114(SC) held, that as there would be no occasion to claim the deduction of the work-in-progress because the project was abandoned and the capital work-in-progress would not proceed any further and see the light of the day, therefore, the expenditure therein incurred was to be allowed as a deduction in the year in which the decision of abandonment of the project was taken. 19 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 Accordingly, the assessee’s claim for deduction of the expenditure incurred towards capital work-in-progress was allowed by the Hon’ble High Court. Also, a similar view had earlier been taken by the Hon’ble High Court of Calcutta in the case of Commissioner of Income-Tax Vs. Graphite India Ltd., 221 ITR 420 (Cal). 13. Considering the peculiar facts involved in the case of the assessee before us read with the settled position of law, we are of a strong conviction that now when the expenditure claimed as a deduction by the assessee is in the nature of a routine revenue expenditure, and the project of the assessee had been abandoned not on account of any unilateral act of the assessee, but pursuant to the order of the Hon’ble Apex Court, therefore, drawing support from the aforesaid judgments of the Hon’ble High Court of Calcutta in the case of Binani Cement Ltd. (supra) and Graphite India Ltd. (supra), its claim for deduction of the said expenditure incurred on the project was duly allowable during the year under consideration i.e. the year in which project was abandoned. We, thus, finding no infirmity in the view taken by the CIT(Appeals) who had by way of a well reasoned order vacated the disallowance of Rs.5,67,03,833/- made by the A.O, uphold the same. 20 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 14. Resultantly, the appeal filed by the revenue being devoid and bereft of any merit is dismissed in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 23 rd September, 2022 **SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायप ु र बɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 21 DCIT, Circle-3(1) Vs. M/s. Chhattisgarh Captive Coal Mining Ltd. ITA No. 06/RPR/2020 Date 1 Draft dictated on 25-08-22 Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order