Mahanadi Coalfields Ltd, Sambalpur V. DCIT, Sambalpur

ITA 73/CTK/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4391 (ITAT-CUTTACK)
• Duration Of Justice: 5 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-12-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: S S PODDAR
• Keywords: Depreciation; Opportunity of being heard; Capital expenditure
• Section: 32

Judgement Text

1 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 MAHANADI COALFIELDS LTD., JAGRITI VIHAR, BURLA, SAMBALPUR VS. DCIT, CIRCLE - 2(1), SAMBALPUR . PAN/GIR NO. AABCM 5188 P (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.S.PODDAR, AR REVENUE BY : SHRI PIYUSH KOLHE, CIT DR DATE OF HEARING : 28 /12/ 2017 DATE OF PRONOUNCEMENT : 03 / 0 1/ 201 8 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - CUTTACK, DATED 14.12.2011 FOR THE ASSESSMENT YEAR 200 8 - 2009. 2. THE ISSUE INVOLVED IN GROUND NO.1 OF APPEAL AND GROUND NO.1 1 OF APPEAL IS INTER CONNECTED, WHICH RELATES TO CONFIRMATION OF DISALLOWANCE OF PROSPECTING & BORING EXPENSES OF RS.397.91 LAKHS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED RS. 448.53 LAKHS AS PROSPECTING & BORING EXPENSES FOR THE YEAR. BEFORE THE ASSESSING OFFICER, IT WAS EXPLAINED THAT AS PER THE ACCOUNTING POLICY, PROSPECTING & BORING EXPENSES ARE PART OF FIXED ASSET AS PER SCHEDULE - XIV OF THE COMPANIES ACT, 1956 BUT BEING O F 2 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 REVENUE NATURE, THE EXPENDITURE HAS BEEN CLAIMED IN THE COMPUTATION OF TOTAL INCOME. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE AND CONCLUDED THAT THE PROSPECTING & BORING EXPENDITURE AS PER THE ASSESSMENT ORD ER OF EARLIER YEARS IS TO BE ALLOWED U/S.35E FOR NEXT TEN YEARS AND, ACCORDINGLY, ALLOWED 10% OF RS.448.53 LAKHS BEING RS.44.85 LAKHS, WHICH WAS CONFIRMED IN APPEAL BY THE CIT(A). 4 . AT THE TIME OF HEARING, BOTH THE PARTIES AGREED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2004 - 05 TO 2007 - 08, RESPECTIVELY. 5. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THIS ISSUE HAS BEEN DEALT WITH BY THIS BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEARS 2004 - 05 TO 2007 - 08 IN ITA NO.22 7 /CTK/2009 AND OTHERS ORDER DATED 12.9.2011 AS UNDER: WE FIND THAT THE LEARNED CIT(A) HAS CONSIDERED THE ISSUE AND HELD THAT THE EXPENDITURE BOOKED UNDER THE HEAD PROSPECTING AND BORING AND APPEARING IN THE FIXED ASSET SCHEDULE AND WORK - IN - PROGRESS SHOULD ALSO BE CONSIDERED ON THE SAME BASIS AS DIRECTED WHIL E ADJUDICATING DEVELOPMENT EXPENSES. WE HAVE ALREADY ADJUDICATED THE ISSUE ON DEVELOPMENT EXPENSES AND UPHELD THE ORDER OF THE CIT(A) FOR THE REASONS AS DISCUSSED IN PARAGRAPHS 21 AND 22 OF THIS ORDER. THEREFORE, WE UPHOLD THE IMPUGNED ORDER OF THE LD CIT(A) ON THE ISSUE OF DISALLOWANCE OF PROSPECTING & BORING EXPENSES (P&B) AND DISMISS THE GROUND RAISED BY THE ASSESSEE IN THIS REGARD. 5 . SINCE THERE IS NO CHANGE OF FACTS IN THE YEAR UNDER CONSIDERATION, FOLLOWING THE PRECEDENT, WE CONFIRM THE ORDER O F THE CIT(A) AND DISMISS GROUND NOS.1 OF APPEAL OF THE ASSESSEE AND IN RESPECT OF CLAIM U/S.35E OF THE ACT OF EARLIER YEAR ADDITION BEING SIMILAR NATURE, WE FIND THAT THE 3 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 ASSESSEE CANNOT VENTILATE ITS GRIEVANCE BEFORE US AND SHALL APPROACH THE RESPECTIVE ASSESSING AUTHORITIES AND, THEREFORE, WE DISMISS GROUND NO.12 OF APPEAL OF THE ASSESSEE. 6. GROUND NO.2 OF APPEAL RELATES TO DISALLOWANCE OF DEVELOPMENT EXPENDITURE OF RS.49.32 LAKHS. 7. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED RS.1244.2 7 LAKHS UNDER THE HEAD DEVELOPMENT EXPENDITURE IN THE COMPUTATION OF INCOME. BEFORE THE ASSESSING OFFICER, IT WAS EXPLAINED BY THE ASSESSEE THAT AS PER THE ACCOUNTING POLICY CONSISTENTLY FOLLOWED, THE DEVELOPMENT EXPENDITURE IS TREATED AS PART OF FIXED A SSET SCHEDULE AND CLAIMED THE EXPENDITURE BEING REVENUE IN NATURE AND IS ALLOWABLE U/S.37(1) OF THE ACT. AFTER CONSIDERING THE EXPLANATION S OF THE ASSESSEE, THE ASSESSING OFFICER ALLOWED DEPRECIATION @ 10% AND DISALLOWED BALANCE AMOUNT OF RS.49.32 LAKHS, WHICH WAS CONFIRMED IN APPEAL BY THE CIT(A). 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, WE FIN D THAT IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES CASE FOR THE ASSESSMENT YEARS 200 3 - 04 TO 200 6 - 0 7 IN ITA NO.226 & 227/CTK/2009 AND OTHERS ORDER DATED 12.9.2011 , FOLLOWING WHICH THE CIT(A) DISMISSED THE GROUND OF THE APPEAL, TO WHICH , LD A.R. HAS CONCEDED. FOLLOWING THE PRECEDENT, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 4 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 9. GROUND NO.3 OF THE APPEAL RELATES TO DISALLOWANCE OF CAPITAL EXPENDITURE ON ASSETS NOT BELONGING TO THE COMPANY. 10. LD A.R. OF THE ASSESSEE AT THE TIME OF HEARING DID NOT PRESS THIS GROUND OF APPEAL. THEREFORE, THIS GROUND IS DISMISSED AS NOT PRESSED. 11. GROUND NO.4 OF APPEAL RELATES TO CONFIRMATION OF DISALLOWANCE ON RECLAMATION OF LAND. 12. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE A PROVISION FOR RECLAMATION OF LAND AMOUNTING TO RS. 858.94 LAKHS AND CLAIMED AS DEDUCTION IN THE COMPUTATION OF INCOME. THE ASSESSING OFFICER OBSERVED THAT THE EXPENDITURE HAS NEITHER BEEN IN CURRED NOR ANY LIABILITY ACCRUED DURING THE YEAR, RATHER A PROVISION HAS BEEN MADE FOR FUTURE EXPENDITURE AND, ACCORDINGLY, DISALLOWED FOR THE SAME. 13. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF INDIAN MOLASSES CO.PVT LTD VS CIT, 37 ITR 66 (SC), WHEREIN, IT HAS BEEN HELD THAT PROVISION FOR A CONTINGENT OR UNACCRUED LIA BILITY IS NOT ALLOWABLE AS DEDUCTION. 14. BEFORE US, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE PROVISION OF EXPENDITURE MADE IN THE EARLIER YEARS HAS BEEN OFFERED FOR TAXATION WHEREAS LD D.R. CONTROVERTED THE SUBMISSION OF LD A.R. OF THE ASSESSEE BY MENT IONING THAT NO SUCH EVIDENCE WAS FILED BEFORE THE ASSESSING OFFICER 5 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 OR LD CIT(A). THE LD A .R. HAS SUBMITTED DE TAILS OF LAND RECLAMATION EXPENDITURE, WHICH INCLUDES LEDGER ACCOUNT COPY OF CLAIM OF LAND RECLAMATION EXPENDITURE DURING THE FINANCIAL YEARS 200 3 - 04 TO 2010 - 2011, AND PRAYED FOR ALLOWING THE CLAIM 15. LD D.R. HAS OBJECTED THAT THESE DOCUMENTS WERE FILED BEFORE THE TRIBUNAL FOR THE FIRST TIME, WHICH ARE TO BE VERIFIED AS THERE IS EFFECT OF TAX IMPLICATION ON THE COMPANY. 16. WE CONSIDERING THE S UBMISSIONS OF BOTH THE PARTIES AND ALSO THE OBJECTION RAISED BY LD D.R. FIND THAT THE DOCUMENTS HAVE TO BE VERIFIED IN RESPECT OF LAND RECLAMATION EXPENDITURE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO VERIFY AND EXAMINE WHETHER SUCH PROVISION WAS OFFERED FOR TAXATION IN THE SUBSEQUENT YEAR AND ADJUDICATE THE ISSUE ON MERITS AFTER HEARING THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 17. GROUND NO.5 OF APPEAL RELATES TO CLAIM TOWARDS REVERSAL OF INTEREST ON INCOME TAX REFUND AS EXPENDITURE. 18. THIS ISSUE WAS NOT PRESSED BY LD A.R. OF THE ASSESSEE AND, THEREFORE, SAME IS DISMISSED AS N OT PRESSED. 19. THE NEXT ISSUE RELATES TO CONFIRMATION OF ADDITION ON ACCOUNT OF DONATION AND SUBSCRIPTION. 20. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED R S.5.25 LAKHS AS DONATION & SUBSCRIPTION. THE ASSESSING OFFICER REQUIRED THE 6 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 ASSESSEE TO FURNISH THE DETAILS & EXPLANATION WITH EVIDENCE OF THE ALLOWABILITY OF EXPENDITURE, WHICH WAS NOT ADHERED TO BY THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER DISALLOWED FOR THE SAME AND ADDED TO THE INCOME OF THE ASSESSEE. 21. ON APPEAL, THE CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 1999 - 2000, 2000 - 2001, 2001 - 02 AND 2002 - 03 HAS DIRECTED THE ASSESSING OFFICER TO ALLOW SUCH EXPENDITURE WHERE THE ASSESSEE HAS BEEN ABLE TO ESTABLISH RELATION OVER THE EXPENDITURE OF THE A SSESSEE COMPANY. AS REGARDS TO DONATION WHICH ARE ELIGIBLE FOR DEDUCTION U/S. 80G, THE ASSESSING OFFICER SHALL ALLOW THE SAME ON SUBMISSION OF THE EVIDENCE OF EXEMPTION U/S.80G. 22. BEFORE US, LD A.R. OF HE ASSESSEE SUBMITTED AN AMOUNT OF RS.2.81 LAKHS IS PAID ON ACCOUNT OF DONATION AND ALSO SUBMITTED THE BREAK UP SUBSCRIPTION GIVEN TO THE FOLLOWING ORGANISATIONS: 1. UTKAL CHAMBER OF COMMERCE AND IND (ANNUAL SUB): RS. 30,25 0 2. CONFEDERATION OF INDIAN INDUSTRY, KOLKATA (ANNUAL MEMBERSHIP) RS. 80,000 3. STANDING CONFERENCE OF PUBLIC ENTERPRISE RS. 1,00,000 (SCOPE) ANNUAL MEMBERSHIP 4. DATANET INDIA PVT LTD., MUMBAI(RENEWAL OF SUBSCRIPTION UNDER CORPORATE CATEGORY) RS. 33,708 TOTAL: RS.2,43,958 HE SUBMITTED THAT THE EXPENDITURE IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. HE SUBMITTED THAT SINCE THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING, HAS UNDERTAKEN NUMBER OF DEVELOPMENT WORK 7 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 IN AND AROUND ITS PERIPHERAL AREA TO FULFIL I TS SOCIAL OBLIGATION AND IN THE PROCESS MADE DONATION S AND FURTHER DETAILS OF EXPENDITURE WERE DULY FURNISHED BEFORE THE ASSESSING OFFICER. LD A.R. SUBMITTED THAT THE CIT(A) FOR THE ASSESSMENT YEARS 1995 - 96, 1996 - 97 & 1997 - 98 HAS ALLOWED THE EXPENDITURE S UNDER THIS HEAD. HE, THEREFORE, PRAYED THAT THE DISALLOWANCE MADE UNDER THE HEAD DONATION AND SUBSCRIPTION BE DELETED. 23. CONTRA, LD D.R. OBJECTED TO THE SUBMISSION OF LD A.R. OF THE ASSESSEE. 24. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDE RS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER HAS DISALLOWED THE EXPENDITURE CLAIMED UNDER THE HEAD DONATION AND SUBSCRIPTION ON THE GROUND THAT THE ASSESSEE FAILED TO FURNISHED ANY EVIDENCE BEFORE THE ASSESSING OFFICER AS CALLED FOR. ON APPEAL, THE CIT(A) FOLLO WING THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 1999 - 2000, 2000 - 2001, 2001 - 02 AND 2002 - 03 HAS DIRECTED THE ASSESSING OFFICER TO ALLOW SUCH EXPENDITURE WHERE THE ASSESSEE HAS BEEN ABLE TO ESTABLISH RELATION OVER THE EXPENDITURE OF THE ASSESSEE COMPA NY. AS REGARDS TO DONATION WHICH ARE ELIGIBLE FOR DEDUCTION U/S. 80G, THE ASSESSING OFFICER SHALL ALLOW THE SAME ON SUBMISSION OF THE EVIDENCE OF EXEMPTION U/S.80G. 25. WE FIND THAT THE ASSESSEE HAS PAID AN AMOUNT OF 2.81 LAKHS TOWARDS DONATION S AND RS.2. 43.958 TOWARDS SUBSCRIPTION TO DIFFERENT CONCERNS AS MENTIONED IN PARA 21 OF THIS ORDER. THE MAJOR AMOUNTS ARE PAID TO GOVERNMENT INSTITUTIONS HEADED BY GOVERNMENT OFFICIALS LIKE DISTRICT 8 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 MAGISTRATE AND OTHER GOVERNMENT OFFICIALS WHERE THE ASSESSEE COMPAN Y HAS MAJOR ACTIVEFS BUSINESS OPERATIONS. AS REGARDS THE SUBSCRIPTIONS, THE DETAILS FURNISHED BY THE ASSESSEE ARE IN THE NATURE OF ANNUAL MEMBERSHIP, ETC. THE TRIBUNAL IN THE ASSESSMENT YEARS 1999 - 2000, 2000 - 2001, 2001 - 02 AND 2002 - 03 HAS DIRECTED THE ASS ESSING OFFICER TO ALLOW SUCH EXPENDITURE WHERE THE ASSESSEE HAS BEEN ABLE TO ESTABLISH RELATION OVER THE EXPENDITURE OF THE ASSESSEE COMPANY. AS REGARDS TO DONATION WHICH ARE ELIGIBLE FOR DEDUCTION U/S. 80G, THE ASSESSING OFFICER SHALL ALLOW THE SAME ON S UBMISSION OF THE EVIDENCE OF EXEMPTION U/S.80G. BUT IN THE PRESENT YEAR UNDER CONSIDERATION, THE LD A.R. SUBMITTED THAT THERE IS NO SUCH DONATION WHICH IS ELIGIBLE FOR DEDUCTION U/S.80G. WE CONSIDERING THE FACTS AND SUBMISSIONS , SET ASIDE THE ORDERS OF L OWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION OF RS.5.25 LAKHS MADE UNDER THE HEAD DONATION AND SUBSCRIPTION AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 26. THE NEXT ISSUE RELATES TO CONFIRMATION OF ADDITION OF RS.384.30 LAKHS MADE UNDER THE HEAD DETERIORATION OF STOCK AND RE - HANDLING OF COAL. 27. THE RELEVANT FACTS ARE THAT THE ASSESSING OFFICER HAS DISALLOWED RS.384.30 LAKHS SINCE THERE IS NO TECHNICAL REPORT IN SUPPORT OF THE CLAIM OF THE ASSESSEE AND NO EVIDENCE IS FURNISHED AS TO THE DETERIORATION OF STOCK. 28. BEFORE THE LEARNED C!T(A), IT WAS SUBMITTED THAT THE ASSESSEE COMPANY MAINTAINS A HUGE INVENTORY OF COAL SPREAD OVER VARIOUS MINING AREAS. SUCH COAL IS LYING IN THE OPEN FIELD. FURTHER, WHEN STOCKED FOR A 9 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 LONGER PERIOD, THE QUALITY OF COAL GETS DETERIORATED. TO TAKE CARE OF SUCH CONTINGENCIES, THE ASSESSEE MADE A PROVISION OF 10% AND STOCK WAS VALUED. 29. THE CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2004 - 05 TO 2007 - 08 IN ITA NOS.50,51,52 & 53 DIRECTED THE ASSESSING OFFICER TO RECONSIDER THE FACTS IN THE LIGHT OF TECHNICAL SUPPORT OR EVIDENCE IN THE BOOKS OF ACCOUNT. 30. BEFORE US, BOTH THE PARTIES AGREED THAT THE ISSUE REQUIRES RECONSIDERATION IN VIEW OF THE DECISION OF THE TRIBUNAL HELD AS UNDER: HAVING HEARD BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT IN ABSENCE OF ANY TECHNICAL REPORT IN SUPPORT OF THE CLAIM AND AS THERE IS ANY EVIDENCE IN SUPPORT OF THE CLAIM, THE LEARNED CIT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE WHICH HAS BEEN QUANTIFIED ON A PERCENTAGE BASIS I.E., 10% THAT TOO WITHOUT ANY MATERIAL BASIS. AT THE SAME TIME, IT IS NOT IMPROBABLE THAT THERE MIGHT BE CERTAIN DETERIORATION OF STOCK DUE TO FI RE AND LONGER PERIOD OF STOCKING ETC., BUT A BASIS HAS TO BE BASED ON THE BOOKS OF ACCOUNTS ITSELF AND NOT IN A WHIMSICAL MANNER. THESE FACTS, IN OUR VIEW, REQUIRE RECONSIDERATION IN THE LIGHT OF TECHNICAL SUPPORT OR EVIDENCE IN THE BOOKS OF ACCOUNT. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH IN THE LIGHT WHAT HAS BEEN STATED ABOVE. 31. WE FIND THAT THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO RECONSI DER THE ISSUE ON THE ABOVE BASIS OF ABOVE FINDINGS OF THE TRIBUNAL. HENCE, WE CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 32. THE NEXT ISSUE RELATES TO CONFIRMATION OF ADDITION OF RS.130 . 09 LAKHS ON ACCOUNT OF REDUCT ION IN VALUE OF STORES DUE TO OBSOLESCENCE AND SHORTAGE OF STORES. 10 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 33. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PROVIDED AN AMOUNT OF RS.130.09 LAKHS TOWARDS OBSOLESCENCE OF STORES, WHICH, AS PER THE ASSESSEE, WAS ARRIVED AT AFTER TECHNICAL APPRAISAL OF STORES ARTICLES WHICH MAINLY PERTAINS TO SPARES STORE OF THOSE MACHINERIES AND HEMM WHICH HAS ALREADY BEEN SCRAPPED. THE ASSESSING OFFICER DISALLOWED ON THE GROUND THAT THE ASSESSEE COULD NOT FURNISH THE DETAILS AS WELL AS EVIDENCE THEREOF, WHICH WAS CONFIRMED IN APPEAL BY THE CIT(A) 34. BEFORE US BOTH THE PARTIES AGREED THAT THE ISSUE IS COVERED BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2003 - 04 AND 2004 - 05 IN ITA NO.22 6 & 27/CTK/2009 ORDER DATED 12.9.2011, WHEREIN, HAS BEEN HELD AS UNDER: WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AUTHORITIES BELOW HAVE DISALLOWED THE CLAIM OF THE ASSESSEE MAINLY ON THE GROUND THAT N O DETAILS THEREOF COULD BE FURNISHED BY THE ASSESSEE. THE LD A.R. OF THE ASSESSEE VEHEMENTLY CONTENDED THAT THE DETAILS THEREOF WERE PRODUCED BEFORE THE LD CIT(A) INCLUDING THE AREA - WISE DETAILS OF AMOUNT CHARGED AGAINST NON - MOVING STORES AND SPARES. HE ALSO SUBMITTED A COPY OF SUCH DETAILS, WHICH IS FOUND PLACED AT PAGE 165 OF THE PAPER BOOK. IF THAT IS SO, IN OUR CONSIDERED VIEW, WITHOUT EXAMINING SUCH DETAILS FURNISHED BEFORE HIM THE LD CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER. THEREFORE, FOR THE ENDS OF JUSTICE, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE AO FOR CONSIDERATION AFRESH IN THE LIGHT OF DETAILS FURNISHED BY THE ASSESSEE WHEN CLAIM AS MANDATORY PERCEN TAGE TO ACTUAL IDENTIFICATION HAS TO BE CONSIDERED TO BE ESTABLISHED BY THE ASSESSEE AND PASS NECESSARY CONSEQUENTIAL ORDER IN ACCORDANCE WITH LAW GIVING DUE AND PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 35. FACTS BEING IDENTICAL FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION, FOLLOWING THE DECISION OF THE TRIBUNAL AS ABOVE, WE SET ASIDE THE ORDER OF 11 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 THE CIT(A) AND RESTORE THE FILE TO THE ASSESSING OFFICER FOR CONSIDERATION AFRESH IN THE LIGHT OF DETAILS FURNISHED BY THE ASSESSEE AFTER AFFORDING REA SONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 3 6 . THE NEXT ISSUE RELATES TO CONFIRMATION OF ADDITION OF S.110.09 LAKHS ON ACCOUNT OF CLAIM OF 15% ON LOSS ON SALE/DISCARD OF ASSETS. 3 7. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.110.09 LAKHS @ 15% ON THE VALUE OF LOSS ON SALE/DISCARD OF ASSETS AMOUNTING TO RS.733.94 LAKHS AND ALSO CLAIMED DEPRECIATION SEPARATELY AND NOT IN THE DEPRECIATION SCHEDULE. BEFORE T HE ASSESSING OFFICER, IT WAS CLAIMED BY THE ASSESSEE THAT THIS PRACTICE IS FOLLOWED TO MAINTAIN UNIFORMITY IN ACCOUNT. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF THE ASSESSEE. 38. ON APPEAL, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRECTNESS OF ASSESSEES CLAIM AND GIVEN EFFECT IF ANY, AS THE ISSUE IS LINKED WITH THE ASSESSMENT YEAR 1995 - 9 6 TO 2008 - 09. 39. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LO WER AUTHORITIES. WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AS HE HAS ONLY DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRECTNESS OF ASSESSEES CLAIM AND GIVE EFFECT, IF ANY. HENCE, WE DISMISS THIS GROUND OF THE ASSESSEE. 40. THE NEXT ISSUE RELATE S TO SHORT CREDIT OF TDS OF RS.759.28 LAKHS. 41. THE ASSESSING OFFICER HAS NOT ALLOWED ANY CREDIT OF TDS WHILE PROCESSING THE RETURN U/S.143(1) OF THE ACT. BEFORE THE ASSESSING OFFICER, 12 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 IT WAS SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ALL TDS CERTIFICATES IN ORIGINAL FOR THE TOTAL TDS AMOUNT OF RS.8467.70 LAKHS. FURTHER, THE ASSESSING OFFICER VIDE IS ORDER U/S.154 HAS ALLOWED CREDIT OF TDS FOR RS.4883.66 LAKHS. 42. ON APPEAL, THE CIT(A) HAS HELD THAT THE CREDIT OF TDS SHOULD HAVE BEEN ALLOWED TO THE ASSES SEE ON THE BASIS OF ORIGINAL TDS CERTIFICATES SUBMITTED. 43. WE DO NOT FIND ANY FLAW IN THE ORDER OF THE CIT(A) AS HE HAS OBSERVED THAT THE CREDIT OF TDS SHOULD HAVE BEEN ALLOWED TO THE ASSESSEE ON THE BASIS OF ORIGINAL TDS CERTIFICATES SUBMITTED. HENCE, WE CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE. 44. THE ASSESSEE HAS RAISED ADDITIONAL GROUNDS WHICH READ AS UNDER: 1. WITHOUT PREJUDICE TO OUR CLAIMS MADE IN THE ORIGINAL GROUNDS OF APPEAL, THE AO WOULD HAVE FURTHER ERRED IN NOT ALLOWING DEPRECIATION ON LEASE HOLD RIGHTS OF COAL BEARING LAND U/S.32(1)(II) BEING AN INTANGIBLE ASSET. 2. THAT THE AO WOULD HAVE ALLOWED THE DEPRECIATION ON LEASE HOLD RIGHTS OF COAL BEARING LAND U/S.32(1)(II) BEING AN INTANGIBLE ASSET. 45. LD D.R. OBJECTED TO THE ADMISSION OF ADDITIONAL GROUNDS ON THE GROUND THAT THE GROUNDS HAVE TO BE DISMISSED AS THE LEASE HOLD RIGHTS ARE NOT ELIGIBLE FOR DEPRECIATION U/S.32(1)(II) OF THE ACT CONSIDERING IT AS INTANGIBLE ASSET. HE REFERRED TO THE DECISION O F HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. TECHNO SHARES STOCKS LTD., 225 CTR 337 (BOM), WHEREIN, IT HAS BEEN HELD THAT THE DEPRECIATION UNDER SECTION 32 IS RESTRICTED TO THE TANGIBLE/INTANGIBLE ASSETS WHICH ARE SPECIFICALLY 13 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 ENUMERATED THEREIN AND DEPRECIATION IS NOT ALLOWABLE ON ALL TANGIBLE/INTANGIBLE ASSETS. HE ALSO REFERRED TO THE DECISION OF ITAT MUMBAI BENCHES IN THE CASE OF DABUR INDIA LTD. VS ACIT, 159 TTJ 563 (MUMBAI), WHEREIN ALSO, IT WAS HELD THAT THE TENANCY RIGHTS CANNOT BE CONSTRU ED AS INTANGIBLE ASSETS FALLING WITHIN MEANING EXPLANATION TO SECTION 32(1) AND, THEREFORE, THERE IS NO QUESTION OF ALLOWING DEPRECIATION ON SAID RIGHTS. 46. WE FIND THAT THE ASSESSEE HAS RAISED THESE ADDITIONAL GROUNDS AS PER THE DIRECTION OF HONBLE HI GH COURT OF ORISSA, CUTTACK IN W.P (C) NO.24 OF 2013 AND MISC. CASE NO.5716 OF 2013 ORDER DATED 20.3.2013. IN VIEW OF ABOVE, WE ADMIT THESE ADDITIONAL GROUNDS FOR OUR CONSIDERATION. 47. ON MERITS ALSO, WE FIND FORCE IN THE SUBMISSION OF LD D.R. THAT THE DEPRECIATION IS NOT ALLOWABLE U/S.32(1)(III) OF THE ACT IN RESPECT OF INTANGIBLE ASSETS, WHICH IS SUPPORTED BY JUDICIAL PRONOUNCEMENTS CITED ABOVE. IN VIEW OF ABOVE, WE DISMISS THESE GROUNDS FILED BY THE ASSESSEE. 48 IN THE RESULT, APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 3 / 01 /201 8 . SD/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 03 / 01 /201 8 B. K.PARIDA, SPS 14 ITA NO. 73 /CTK/201 2 ASSESSMENT YEAR : 20 08 - 2009 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : MAHANADI COALFIELDS LTD., JAGRITI VIHAR, BURLA, SAMBALPUR 2. THE RESPONDENT. DCIT, CIRCLE - 2(1), SAMBALPUR 3. THE CIT(A) - CUTTACK 4. PR.CIT - 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//