Deputy Commissioner Of Income Tax , Circle-6, Jaipur, Jaipur V. M/s. Rajasthan State Mines and Minerals Limited , Jaipur

ITA 773/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1412 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 01-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Keywords: Depreciation; Diversion of income; Question of law; Revised return; Capital expenditure; Set aside
• Section: 37; 143(3); 37(1); 80IA; 201; 274; 13; 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 705/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2015-16 M/S RAJASTHAN STATE MINES & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR . CUKE VS. THE DCIT CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA. NO. 773/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2015-16 THE DCIT, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 13/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 12/11/2018 VKNS'K@ ORDER ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 2 PER: VIKRAM SINGH YADAV, A.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF LD. CIT(A), JAIPUR DATED 23.03 .2018 FOR ASSESSMENT YEAR 2015-16 WHEREIN RESPECTIVE GROUNDS OF APPEAL A RE AS UNDER:- ITA. NO. 773/JP/2018 ( REVENUES GROUND) (I) WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DI SALLOWANCE OF STATE RENEWAL FUND OF RS. 20,00,000/- MADE BY THE A.O. WI THOUT APPRECIATING THE FACT THAT IT IS APPLICATION OF INCOME AND NOT E XPENDITURE INCURRED FOR BUSINESS EXPEDIENCY. (II) WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCT ION OF RS. 3,16,55,000/- IN RESPECT OF MINES CLOSURE PLAN? (III) WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING DEDUC TION U/S 80IA OF RS. 5,25,78,000/- ON LIQUIDATED DAMAGES RECEIPTS W ITHOUT APPRECIATING THE FACT THAT THERE WAS NO FIRST DEGREE NEXUS OF TH E RECEIPT WITH THE BUSINESS? ITA. NO. 705/JP/2018 (ASSESSEES GROUND) 1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE DEDUCTION OF AMORTIZATION IN RESPECT OF MINING LAND AT RS. 4,62,14,928/- AND LEASEHOLD LAND AT RS. 8,18,438/- BY HOLDING THA T THE CLAIM MADE DURING ASSESSMENT PROCEEDINGS WITHOUT FILING A REVI SED RETURN CANNOT BE ALLOWED AND THAT THE DECISION OF THE HONBLE SUPREM E COURT IN CASE OF ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 3 GOETZE INDIA VS. CIT 284 ITR 323 DO NOT ALLOW THE L IBERTY TO THE CIT(A) TO ENTERTAIN A CLAIM NOT MADE IN THE VALID RETURN O F INCOME. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO OF REDUCING THE CLAIM OF DEDUCTION U/S 80IA O F RS. 15,52,27,013/- BY MAKING APPORTIONMENT OF TOTAL EMPLOYEE BENEFIT E XPENSES, ESTABLISHMENT EXPENSES, SELLING EXPENSES AND OTHER MISCELLANEOUS EXPENSES AT 69,53,38,695/- TO WIND POWER GENERATION UNDERTAKINGS ELIGIBLE FOR DEDUCTION 80IA BY: A) IGNORING THAT THE ENTIRE OPERATION AND MAINTENAN CE OF WIND PLANTS HAS BEEN GIVEN TO SUZLON ENERGIES LTD. AND THEREFOR E, THE SAID EXPENDITURE HAS NO RELATION TO THE UNDERTAKINGS ELI GIBLE FOR DEDUCTION 80IA; B) INCORRECTLY DETERMINING THE AMOUNT OF SUCH EXPEN DITURE AT RS. 69,53,38,695/- INSTEAD OF ONLY CONSIDERING THE HEAD OFFICE AND CORPORATE OFFICE EXPENSES AT RS. 41,46,71,029/-; AN D C) ALLOCATING THE ABOVE EXPENDITURE IN THE RATIO OF INCOME FROM ELIGIBLE UNITS TO THE TOTAL INCOME INSTEAD OF ALLOCATING IT IN THE RATIO OF GROSS REVENUE OF THE ELIGIBLE UNITS TO THE TOTAL REVENUE AS DONE BY THE AO HIMSELF IN EARLIER YEARS. 2. IN GROUND NO. 1 OF THE REVENUES APPEAL, IT HAS CHALLENGED THE DELETION OF ADDITION OF RS. 20,00,000/- MADE BY THE AO BY DISALLOWING CONTRIBUTION TO STATE RENEWAL FUND. 3. AT THE TIME OF HEARING, BOTH THE PARTIES FAIRLY SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 4 OWN CASE FOR AY 2011-12 IN ITA NO. 298/JP/2015 DATE D 30.05.2017 WHEREIN IT WAS HELD AS UNDER:- 78. GROUND NO. 1 IS AGAINST DELETING THE ADDITION OF RS. 20 LAKHS IN RESPECT OF CONTRIBUTION MADE BY ASSESSEE TOWARDS ST ATE RENEWAL FUND. AT THE OUTSET, THE LD. COUNSEL SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONB LE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS. JODHPUR CO-OP ERATIVE MARKETING SOCIETY (2005) 275 ITR 372(RAJ.) 78.2 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 2.1 AND 2.2 BY FOLLOW ING THE JUDGMENTS OF THE HONBLE HIGH COURT AS UNDER:- 2.1. IN THIS YEAR, THE ASSESSEE HAS CLAIMED EXPEND ITURE OF RS. 20,00,000/- IN RESPECT OF CONTRIBUTION TO STATE REN EWAL FUND. THIS ISSUE ALSO AROSE IN THE CASE OF APPELLANT IN AY 201 0-11 AND EARLIER YEARS. THE MAIN POINTS OF THE ASSESSMENT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APPEAL ORDER OF CIT(A)-II, JAI PUR (APPEAL NO. 325/12-13, DATED 05.12.2013) FOR A.Y. 2010-11. THE MAIN POINTS OF THE SUBMISSIONS OF THE APPELLANT, ON THIS ISSUE, HAVE B EEN NARRATED THE ABOVE APPEAL ORDER. THEREFORE, THE ASSESSMENT ORDE R AND THE SUBMISSIONS OF THE APPELLANT ARE NOT BEING AGAIN NA RRATED IN THIS ORDER FOR THE SAKE OF BREVITY. IN AY 2010-11, THE CIT(A)- II, JAIPUR, HAS HELD AS UNDER- ASSESSING OFFICER DISALLOWED CONTRIBUTION MADE TO STATE RENEWAL FUND BY TREATING THE SAME AS DIVERSION OF INCOME. HOWEV ER, APPELLANT SUBMITTED THAT THIS ISSUE IS COVERED IN ITS FAVOUR BY THE ORDER OF ITAT. IT IS SEEN THAT SIMILAR ADDITION WAS MADE IN AY 200 6-07 IN THE CASE OF ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 5 THE APPELLANT, BUT IT WAS DECIDED BY HONBLE ITAT B ENCH A JAIPUR IN ITA NO. 783/JP/2009 & 740/JP/2009 IN AY 2006-07 THR OUGH ORDER DATED 31.03.2010 IN FAVOUR OF THE APPELLANT, WHERE IN PAR A 15 HONBLE TRIBUNAL RELIED UPON ITS DECISION DATED 22.05.2009 IN CASE OF RAJASTHAN STATE SEEDS CORPORATION LTD, WHEREIN RELYING UPON H ONBLE RAJASTHAN HIGH COURT DECISIONS IN THE CASE OF CIT VS. RAJASTH AN SPINNING AND WEAVING MILLS LTD. 274 ITR 465 AND CIT VS. SHRI RAJ ASTHAN SYNTEX LTD. 221 CTR 410 HELD THAT THE CONTRIBUTION MADE BY THE ASSESSEE TO A PUBLIC WELFARE FUND WHICH IS CONNECTED OR RELATED W ITH HIS BUSINESS IS AN ALLOWABLE DEDUCTION U/S 37 AS IT WAS PROVIDED FO R THE BENEFIT OF THE EMPLOYEES. HONBLE TRIBUNAL DISTINGUISHED THE DECIS ION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY 275 ITR 372 (RAJ) STATING THAT IN THAT CASE THE AMOUNT WAS SET APART FOR THE SHAREHOLDERS OF THE SO CIETY WHEREAS IN THE PRESENT CASE AMOUNT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES AND THE CONTRIBUTION MADE TO STATE RENEWAL FUND WAS FOU ND ALLOWABLE U/S 37(1). RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN APPELLANTS OWN CASE, ADDITION MADE BY THE AO IS DELETED. 2.2 FOLLOWING THE ABOVE ORDER OF THE CIT(A)-II, JAI PUR AND THE ORDER OF ITAT, JAIPUR IN THE CASE OF THE ASSESSEE, THE DI SALLOWANCE MADE BY THE AO IS DIRECTED TO BE DELETED. THIS GROUND IS A LLOWED. 78.3 SINCE THE LD. CIT(A) RIGHTLY FOLLOWED THE JUDG MENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY(2005) 275 ITR 372 (RAJ.). WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND IS DISMISSED. ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 6 4. FURTHER, THE LD. AR ALSO SUBMITTED THAT THE ISSU E IS NOW COVERED BY THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF PRINCIPAL CIT VS. RAJASTHAN STATE SEED CORPORATION LTD . IN D.B. APPEAL NO. 4/2016 DATED 29.04.2016 WHEREIN IT WAS H ELD AS UNDER:- 9. IN SOFAR AS THE EXPENDITURE INCURRED ON STATE RENEW AL FUND IS CONCERNED, SAID EXPENDITURE ALSO GOES TO SHOW TH AT THE RENEWAL FUND WAS SET UP BY THE STATE GOVERNMENT AND WAS CREATED WITH THE OBJECT OF PROVIDING A SAFETY NET F OR THE WORKERS LIKELY TO BE EFFECTED BY RESTRICTING IN THE STATE P UBLIC ENTERPRISE AND THAT A FINDING OF FACT HAS BEEN RECORDED THAT T HE CONTRIBUTION MADE TO THE STATE RENEWAL FUND IS SOLELY FOR THE PU RPOSES OF THE WELFARE AND BENEFIT OF THE EMPLOYEES. IN OUR VIEW, IT IS FOR THE ASSESSEE TO DECIDE WHETHER ANY EXPENDITURE SHOULD B E INCURRED IN THE COURSE OF BUSINESS AND EXPENDITURE OF THIS NATU RE BEING FOR BUSINESS EXPEDIENCY IS CERTAINLY ALLOWABLE DEDUCTIO N UNDER SECTION 37(1) OF THE ACT. IN OUR VIEW ANY NORMAL EX PENDITURE FOR THE WELFARE AND BENEFIT OF EMPLOYEES IS ALLOWABLE E XPENDITURE UNDER SECTION 37(1), THE TRIBUNAL HAS COME TO A FIN DING OF FACT THAT IT WAS A LEGAL OBLIGATION OF THE RESPONDENT-AS SESSEE TOWARDS CONTRIBUTION OF THE SAID AMOUNT TO THE STATE RENEWA L FUND AND THERE BEING A LEGAL OBLIGATION AS WELL IN OUR VIEW THE TRIBUNAL HAS COME TO A CORRECT CONCLUSION. 5. UNDISPUTEDLY, THERE ARE NO CHANGES IN THE FACTS AND CIRCUMSTANCES OF CASE. FOLLOWING THE CONSISTENT PO SITION IN EARLIER YEARS AND THE DECISION OF THE HONBLE RAJASTHAN HIGH COUR T IN CASE OF PR. CIT VS. RAJASTHAN STATE SEED CORPORATION LTD (SUPRA), W E UPHELD THE ORDER ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 7 OF THE LD. CIT(A). HENCE, THE GROUND SO TAKEN BY TH E REVENUE IS DISMISSED. 6. IN GROUND NO. 2, THE REVENUE HAS CHALLENGED ALLO WANCE OF DEDUCTION OF RS. 3,16,55,000/- IN RESPECT OF PROVISION FOR MINES CLOSURE EXPENSES. 7. AT THE TIME OF HEARING, BOTH THE PARTIES FAIRLY SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF CO-ORDINATE BEN CH IN ASSESSEES OWN CASE FOR AY 2011-12 IN ITA NO. 256 AND 298/JP/2015 DATED 30.05.2017 WHEREIN IT WAS HELD AS UNDER:- 70. GROUND NO. 4 IS CONFIRMING THE ACTION OF THE A O DISALLOWED THE CLAIM OF DEDUCTION OF RS. 4,69,61,000/- IN RESP ECT OF MINE CLOSURE EXPENSES MADE IN COURSE OF ASSESSMENT PROCE EDINGS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSION AS MADE IN THE WRITTEN SUBMISSIONS. THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT AS PER THIS GUIDELINES THE ASSESSEE WAS FASTENED A LIABILITY OF RS. 4,69,61,000/- SUCH LIAB ILITY WHICH IS AN ASCERTAINED LIABILITY IS ALLOWABLE UNDER THE MERCAN TILE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE. FOR ALLOWABILI TY OF CLAIM OF EXPENDITURE, THERE IS NO REQUIREMENT THAT IT SHOULD BE DEBITED IN THE BOOKS OF ACCOUNTS FOR THIS PROPOSITION THE LD. COUNSEL FOR THE ASSESSSEE RELIED UPON THE JUDGMENT OF THE HONBLE S UPREME COURT RENDERED IN THE CASE OF SATLUJ COTTON MILLS V S CIT 116 ITR 1. HE SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OW N CASE PERTAINING TO THE AY 2010-11 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 8 70.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS REJECTED T HE CLAIM BY FOLLOWING THE DECISION OF HIS PREDECESSOR PERTAININ G TO THE AY 2010-11. THE CO-ORDINATE BENCH IN ASSESSEES OWN C ASE HAS HELD AS UNDER:- 30.5 FURTHER THE JUDGMENT IN THE MATTER OF BHARAT EARTH MOVERS LTD VS. CIT, 112 TAXMAN 61 (SC) AND CALCUTTA COMPAN Y LTD, 37 ITR ARE APPLICABLE. BESIDE, IN THE SAID JU DGMENT IT WAS CATEGORICALLY HELD THAT THE MINES CLOSURE LIABI LITY IS A ASCERTAINED LIABILITY. AS PER MATCHING PRINCIPLE AS WELL AS THE MERCANTILE SYSTEM OF ACCOUNTING, THE LIABILITY IS ALLOWABLE IN PRINCIPLE UNDER SECTION 37 OF THE ACT. IN VIEW OF THE ABOVE, THE GROUND OF THE ASSESSEE IS ALLOWED AND THE AO IS DIRECTED TO GIVE THE BENEFIT OF DEDUCTION OF RS. 2,94,04,000/- TOWARDS MINES CLOSURE EXPENSES IN THE A.Y. 2010-11. THE FACTS ARE IDENTICAL IN THIS YEAR, AS WELL TAKIN G A CONSISTENT VIEW, THE AO IS DIRECTED TO GIVEN BENEFIT OF DEDUCT ION OF RS. 4,69,61,000/- IN RESPECT OF MINE CLOSURE EXPENSES. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 8. THE LD AR FURTHER SUBMITTED THAT THE MATTER IS N OW COVERED IN ASSESSEES OWN CASE BY THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF PR. CIT VS. RAJASTHAN STATE MINES & MINERALS LTD ., IN DB APPEAL NO. 151/2016 DATED 13.10.2017 FOR A Y 2010-11 WHEREIN THE RELEVANT FINDINGS ARE AS UNDER:- ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 9 5. REGARDING ISSUE NO. 5, COUNSEL FOR THE APPELLA NT HAS RELIED UPON THE OBSERVATIONS MADE BY THE AO WHICH READS AS UNDE R:- 3.10 PROVISION FOR MINES CLOSURE F.Y 2009-10:- DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE CLAI MED AS UNDER: IN COMPLIANCE TO GUIDELINES DATED 27.08.2009, AS A MENDED FROM TIME TO TIME, BY MINISTRY OF COAL, GOVERNMENT OF IN DIA, FOR PREPARATION OF FINAL MINE CLOSURE, COMPANY HAS PROV IDED SUM OF RS. 2,49,04,000/- TOWARDS PROPORTIONATE MINES CLOSU RE EXPENSES FOR THE FINANCIAL YEAR 2009-10 IN THE BOOKS OF ACCO UNTS PREPARED FOR FINANCIAL YEAR 2009-10 IN THE BOOKS OF ACCOUNTS PREPARED FOR FINANCIAL YEAR 2011-12 AS PRIOR PERIOD EXPENSES OF RS. 2,49,04,000/- WHILE MAKING COMPUTATION OF TOTAL INC OME FOR THE ASSESSMENT YEAR 2012-13. AS THE ASSESSMENT PROCEEDI NGS FOR THE YEAR ARE UNDER PROGRESS, IT IS REQUESTED TO ALLOW T HE CLAIM OF THE ASSESSEE WHILE PASSING THE ASSESSMENT ORDER U/S 143 (3). COPY OF INCOME TAX RETURN ACKNOWLEDGEMENT, COMPUTATION OF T OTAL INCOME AND NOTES TO THE COMPUTATION ARE ENCLOSED FO R THE READY REFERENCE. I HAVE GONE THROUGH THE CLAIM MADE BY THE ASSESSEE IN RESPECT OF TOWARDS PROPORTIONATE MINES CLOSURE EXPENSES FOR THE FINANCIAL YEAR 2009-10 AMOUNTING TO RS. 2,49,04,000/-. AS THE ASSESSEE ITSELF MENTIONED IN HIS REPLY THAT THE EXPENDITURE HAS NOT BEEN DEBITED IN THE BOOKS OF ACCOUNTS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THEREFORE NO QUESTION OF ITS ALLOWABI LITY ARISES. EVEN OTHERWISE, LEGALLY ALSO THE CLAIM OF THE ASSESSEE I S NOT VALID IN ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 10 VIEW OF THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF GOETZE (INDIA) LTD. VS. CIT 284 ITR 323, THAT CLAIM OF DEDUCTION NOT MADE IN THE RETURN CANNOT BE ENTERTAINED BY AO OTHERWISE THAN BY FILING REVISED RETURN. 6.1 REGARDING ISSUE NO. 5, IT IS NOT REFLECTED IN THE BOOKS OF ACCOUNTS WITHOUT TAKING CLOSURE OF A MINING IS A ST ATUTORY LIABILITY AND THE SAME IS FOR THE SUBSEQUENT YEAR REFLECTED, THEREFORE, IN VIEW OF THE DECISION RENDERED BY THE TRIBUNAL, WE A RE OF THE OPINION THAT THE TRIBUNAL HAS NOT COMMITTED ANY ERR OR. 9. UNDISPUTEDLY, THERE ARE NO CHANGES IN THE FACTS AND CIRCUMSTANCES OF CASE. FOLLOWING THE CONSISTENT PO SITION IN EARLIER YEARS AND THE DECISION OF THE HONBLE RAJASTHAN HIGH IN A SSESSEES OWN CASE, WE HEREBY AFFIRM THE ORDER OF LD. CIT(A). HENCE, TH E GROUND SO TAKEN BY THE REVENUE IS DISMISSED. 10. IN GROUND NO. 3, THE REVENUE HAS CHALLENGED ALL OWING DEDUCTION U/S 80IA OF RS. 5,25,78,000/- ON LIQUIDATED DAMAGES RECEIPTS WITHOUT APPRECIATING THE FACT THAT THERE WAS NO FIRST DEGRE E NEXUS OF THE RECEIPT WITH THE BUSINESS. 11. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS S UBMITTED THAT THE MATTER IS COVERED IN ASSESSEES FAVOUR BY THE DECI SION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR A.Y. 20 08-09 IN ITA NO. 254/JP/2015 DATED 30.05.2017 WHEREIN IT WAS HELD IN PARA 35.3 WHICH IS REPRODUCED AS UNDER:- 35.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE LD CIT(A) DISALLOWED THE C LAIM ON THE BASIS THAT ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 11 THE FIRST DEGREE NEXUS WITH THE OPERATION OF THE UN DERTAKING IS MISSING. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PRE DECESSOR PERTAINING TO THE A.Y. 2010-11. ADMITTEDLY, THIS PAYMENT IS RE LATED TO THE CONTRACT BETWEEN THE ASSESSEE AND THE SUPPLIER. THE CONTRACT IS RELATED TO THE WIND MILL INDEPENDENT OF OPERATION OF THE WIND MILL THE PAYMENT OF LIQUIDATED DAMAGES WOULD NOT ARISE. IT IS ONLY ON T HE OPERATION OF THE WIND MILL AND THE OUTPUT OF THE EQUIPMENT SO INSTAL LED THIS LIABILITY OF THE PAYMENT OF DAMAGES ARISES. IN THE ABSENCE OF OPERATION, THE ISSUE OF PAYMENT O F SUCH DAMAGES WOULD NOT ARISE. IT IS ONLY WHEN THE WIND MILL BECO MES OPERATIONAL ON SHORT FALL ON THE PRODUCTION SUCH PAYMENT IS MADE. HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. PRAKASH O ILS LTD. (SUPRA) HELD THAT THE PAYMENT MADE AS AN LIQUIDATED DAMAGES FOR NOT HONOURING THE CONTRACT FOR SALE OF OIL AND DEOILED CAKE, SUCH INC OME IS DIRECTLY DERIVED FROM INDUSTRIAL UNDERTAKING, HENCE ELIGIBLE DEDUCTI ON U/S 80IA. IN OUR VIEW, THE LD. CIT(A) ERRED IN HOLDING THAT SUCH INC OME IS NOT DERIVE FROM THE BUSINESS OF THE UNDERTAKING. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IA ON TH IS RECEIPT. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 12. IT WAS FURTHER SUBMITTED THAT THE MATTER IS CO VERED IN ASSESSEES FAVOUR BY THE DECISION OF THE HONBLE RAJASTHAN HIG H COURT IN ASSESSEES OWN CASE FOR A.Y. 2010-11 VIDE DBITA NO. 146/2016 D ATED 13.12.2017 WHEREIN IT WAS HELD IN PARA 15 WHICH IS REPRODUCED AS UNDER:- 15. ON ISSUE NO. 4 REGARDING LIQUIDATED DAMAGES WH ICH ARE GIVEN ARE BUSINESS LOSSES WHICH THE UNDERTAKING OUGHT TO HAVE DONE, IF THE MACHINES WHICH WERE DELIVERED TO THE ASSESSEE WOULD HAVE PERFORMED ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 12 VERY WELL, THEREFORE, DAMAGES WHICH WERE GIVEN FOR LOSS OF BUSINESS WHICH WAS GUARANTEED BY THE SUPPLIER, MADHYA PRADES H HIGH COURT JUDGMENT WILL NOT APPLY IN THE PRESENT CASE. THIS I S NOT DAMAGES FOR COMPENSATION FOR BUSINESS LOSS. IN THAT VIEW OF THE MATTER, THIS ISSUE IS ALSO ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 13. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. FOLLOWING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT, THE LD CIT(A) HAS ALLOWED THE RELIEF TO THE ASSESSEE. WE THEREFORE DONOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) AND THE SAME IS HEREBY CONFIRMED. IN THE RESULT, THE GROUN D OF APPEAL IS DISMISSED. 15. NOW COMING TO ASSESSEES APPEAL. IN GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN CONF IRMING THE DISALLOWANCE OF AMORTIZATION OF MINING LAND OF RS. 4,62,14,928/- AND LEASEHOLD LAND OF RS. 8,18,438/- BY TREATING IT AS CAPITAL EXPENDITURE. 16. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE CL AIM WAS NOT MADE IN THE ORIGINAL RETURN OF INCOME AND THE RETURN WAS NOT REVISED ON TIME. FURTHER, THE CLAIM OF AMORTIZATION OF MINING LAND I S NOT ELIGIBLE U/S 35D(2) AND THE ASSESSEE COULD NOT JUSTIFY ITS ALLOC ATION IN THE YEAR UNDER CONSIDERATION TO CLAIM DEDUCTION U/S 37(1). A CCORDINGLY, HE DISALLOWED THE CLAIM OF AMORTIZATION OF LAND AMOUNT ING TO RS. 4,62,14,928/-WHICH ON APPEAL WAS CONFIRMED BY THE L D CIT(A). ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 13 17. DURING THE COURSE OF HEARING, THE LD AR SUBMITT ED THAT THE HONBLE RAJASTHAN HIGH COURT IN ITS ORDER FOR AY 20 10-11 IN DB ITA NO.146/2016 DT. 13.12.2017 AFTER REFERRING TO THE D EFINITION OF INTANGIBLE ASSET HELD THAT THE RIGHTS WHICH ARE GIV EN TO THE ASSESSEE ARE COMMERCIAL RIGHTS WHICH ARE AKIN TO LICENSE FOR MIN ING. ACCORDINGLY, IT WAS SUBMITTED THAT THE HONBLE HIGH COURT ACCEPTED THE CONTENTION OF ASSESSEE FOR ALLOWING DEPRECIATION U/S 32(1)(II) ON SUCH RIGHT IN THE MINING LAND. IN VIEW OF ABOVE, IT WAS SUBMITTED THA T THE AO BE DIRECTED TO ALLOW THE CLAIM OF DEPRECIATION U/S 32(1)(II) OF THE ACT. REGARDING DECISION OF THE HONBLE SUPREME COURT IN CASE OF GO ETZE INDIA RELIED UPON BY THE LD CIT(A), IT WAS SUBMITTED THAT THE SA ID DECISION NOWHERE STATES THAT THE CIT(A) HAS NO POWER TO ENTERTAIN TH E CLAIM WHICH IS NOT MADE IN THE RETURN OF INCOME AND THUS, THE LD CIT(A ) HAS ERRED IN NOT ALLOWING THE SAME WHICH IS OTHERWISE PERMISSIBLE AS PER THE ORDER OF THE HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE. 18. WE NOW REFER TO THE DECISION OF THE HONBLE RAJ ASTHAN HIGH COURT IN DB ITA NO.146/2016 DT. 13.12.2017 WHERE WHILE AD MITTING THE APPEAL, THE HONBLE HIGH COURT HAS FRAMED THE SUBST ANTIAL QUESTION OF LAW AS UNDER: (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LICENCE TO USE THE LAND FOR MINING IS COVERED BY THE DEFINITIO N OF INTANGIBLE ASSETS U/S 2(11) OF THE ACT ENTITLING DEPRECIATION ALLOWAN CE U/S 32(1)(II) OF THE ACT. AND THEREAFTER, AT PARA 13 TO 13.2 OF ITS JUDGMENT, THE HONBLE HIGH COURT HAS HELD AS UNDER: ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 14 13. HOWEVER, ON THE SECOND ISSUE, ON A CLOSE SCRUT INY OF SUB SECTION 32(II) OF THE INCOME TAX ACT WHICH READS AS UNDER:- SECTION 32, (1) IN RESPECT OF DEPRECIATION OF- (II) KNOW-HOW, PATENTS, COPYRIGHTS, TRADE MARKS, LI CENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGH TS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTE R THE 1 ST DAY OF APRIL, 1988. 13.1 IN OUR CONSIDERATION OPINION THE RIGHTS WHICH ARE GIVEN TO THE ASSESSEE ARE OF COMMERCE RIGHTS WHICH ARE AKIN TO L ICENSE FOR MINING. 13.2 IN THAT VIEW OF THE MATTER, THE CONTENTION OF THE ASSESSEE REGARDING DEPRECIATION U/S 32(II) IS REQUIRED TO BE ACCEPTED, THEREFORE, THE SECOND ISSUE IS ANSWERED IN FAVOUR OF THE ASSES SEE AND AGAINST THE DEPARTMENT. 19. IT IS NOT IN DISPUTE THAT THE MATTER IS NOW COV ERED ON MERITS IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE RAJASTHAN HIGH COURT WHERE THE ASSESSEE HAS BEEN HELD ELIGIBLE TO CLAIM DEPRECIATION UNDER SECTION 32(1)(II) OF THE ACT. REGARDING THE FACT THAT THE SAID CLAIM WAS NOT MADE IN THE ORIGINAL RETURN OF INCOME BUT BY WAY OF A LETTER DATED 6.12.2017 DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, WE FIND THAT THE DECISION OF THE HONBLE SUPREME CO URT IN CASE OF GOETZE INDIA WAS IN CONTEXT OF POWER OF THE ASSESSI NG OFFICER TO ENTERTAIN A FRESH CLAIM WITHOUT FILING A REVISED RE TURN OF INCOME. HOWEVER, WHEN THE MATTER WAS TAKEN UP IN APPEAL BEF ORE THE LD CIT(A), WE FIND THAT SO LONG AS THE CLAIM IS LEGALLY TENABL E MORE SO BY THE DECISION OF THE HONBLE HIGH COURT IN ASSESSEES OW N CASE AND ALL ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 15 MATERIAL FACTS ARE ON RECORD, THE ASSESSEE SHOULD N OT BE DENIED SUCH A CLAIM WHICH IT IS ELIGIBLE OTHERWISE. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT, THE AO IS DIRE CTED TO ALLOW DEPRECIATION UNDER 32(1)(II) OF THE ACT. THE GROUN D OF ASSESSEES APPEAL IS THUS PARTLY ALLOWED. 20. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED TH E CONFIRMATION OF THE ACTION OF THE AO OF REDUCING THE CLAIM OF DEDUC TION U/S 80IA OF RS.15,52,27,013/- BY APPORTIONING ESTAB LISHMENT AND FINANCIAL EXPENSES AT RS. 69,53,38,695/- TO WIND PO WER GENERATION UNDERTAKINGS ELIGIBLE FOR DEDUCTION U/S 80IA IGNORI NG THAT THE ENTIRE OPERATION AND MAINTENANCE OF WIND PLANTS HAS BEEN G IVEN TO SUZLON ENERGIES LTD. AND THEREFORE, THE SAID EXPENDITURE H AS NO RELATION TO THE UNDERTAKINGS ELIGIBLE FOR DEDUCTION U/S 80IA. 21. IN THIS REGARD, THE LD. AR SUBMITTED THAT THE A O OBSERVED THAT IN WORKING OUT THE CLAIM OF DEDUCTION U/S 80IA, ASSESS EE HAS NOT APPORTIONED ESTABLISHMENT & OTHER MISCELLANEOUS EXP ENSES, EMPLOYEES BENEFIT EXPENSES, SELLING EXPENSES, PACKING CHARGES AND BUSINESS PROMOTION EXPENSES AMONGST THE UNITS ELIGIBLE FOR D EDUCTION U/S 80IA. THE ASSESSEE HAS ONLY CONSIDERED THE DIRECT OPERATI ON AND MAINTENANCE EXPENSES FOR WORKING OUT THE PROFITS OF WIND POWER PROJECTS AS IF THESE PROJECTS WERE AUTOMATICALLY SET UP AND WERE RUNNING WITHOUT ANY STRATEGIC PLANNING, MANAGEMENT, DIRECTIONS, ETC. AC CORDINGLY, AO WORKED OUT SUCH EXPENSES AT RS.69,53,38,695/- CALCU LATED IN THE FOLLOWING MANNER:- A) ESTABLISHMENT & OTHER MISCELLANEOUS EXPENSES - RS.1 13,24,29,832/- LESS:- DONATION - RS.90,00,00,000/- RS.23,24,29,832/- ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 16 B) EMPLOYEES BENEFIT EXPENSES (28% OF RS.144,07,96, 406/-) RS.40,34,22,994/- C) SELLING EXPENSES RS.4,11,36,421/- D) BUSINESS PROMOTION EXPENSES RS.41,09,876/- E) PACKING EXPENSES (55% OF RS.2,58,90,131/-) RS .1,42,39,572/- TOTAL RS.69,53,38,695/- THE ABOVE EXPENDITURE WAS ALLOCATED IN THE RATIO OF INCOME FROM ELIGIBLE UNITS TO THE TOTAL INCOME AND ACCORDINGLY DEDUCTION U/S 80-IA IS REDUCED BY RS.15,52,27,013/-. 22. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) H ELD THAT ON PERUSAL OF THE AGREEMENT WITH M/S SUZLON ENERGY LTD., IT CA N BE NOTED THAT ONLY THE OPERATIONAL PART IS BEING HANDLED BY M/S SUZLON ENERGY LTD. THUS, EVEN THE MONITORING OF THESE AGREEMENTS AND FACILIT ATING THE TERMS AND CONDITIONS OF THE AGREEMENT AND MONITORING OF THE O PERATIONS WOULD REQUIRE MANAGEMENT, DIRECTION, SUPERVISION AND CONT ROL AND THEREFORE, IT CANNOT BE SAID THAT EXPENDITURE UNDER THE HEAD OF E STABLISHMENT AND FINANCIAL EXPENSES HAVE NO NEXUS WITH THE RUNNING O F THE POWER PROJECTS. ACCORDINGLY, SHE CONFIRMED THE ALLOCATION OF EXPENDITURE AS MADE BY THE AO. 23. IT WAS FURTHER SUBMITTED THAT NONE OF THE ABOVE EXPENDITURE WHICH IS CONSIDERED FOR ALLOCATION PERTAIN TO THE 8 0IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND MAINTENANCE OF THE PLANT HAS BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, ASSESSEE H AS NOT TO INCUR ANY EXPENDITURE ON SALARY/ EMPLOYEES BENEFIT, TRAVELLIN G, CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSES IN CORPORATE OFFICE/ HEAD OFFICE. NO STRATEGIC PLANNIN G, DAY TO DAY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, M ARKETING MANAGEMENT, TENDERING, WORK ALLOCATION, CONTRACT AW ARDING, CONTROL ETC. ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 17 IS REQUIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/ HEAD OFFICE. THEREFORE, NO PART OF THESE EXPENSES M ORE PARTICULARLY EXPENSES ON REPAIRS, RATES AND TAXES, LAND TAX, INS URANCE, TRAVELLING, CONVEYANCE, FINANCIAL EXPENSES, CONSULTANCY CHARGES , ETC. CAN BE ALLOCATED TO THE INCOME DERIVED FROM THESE POWER GE NERATING UNITS. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTE NT OF RS. 15,52,27,013/- IS GROSSLY UNJUSTIFIED. 24. IT WAS FURTHER SUBMITTED THAT SIMILAR DISALLOWA NCE WAS MADE IN AY 2006-07 TO 2009-10 & 2011-12 TO 2013-14 WHEREIN THE HONBLE ITAT VIDE ORDER DATED 30.05.2017 SET ASIDE THE ORDER TO THE FILES OF THE AO TO VERIFY THE CLAIM OF THE ASSESSEE THAT THE ENTIRE EX PENDITURE RELATED TO OPERATION & MAINTENANCE WAS BORN BY SUZLON ENERGIES LTD. IT MAY BE NOTED THAT THE ASSESSEE HAS FILED THE RELEVANT EXTR ACT OF THE TERMS AND CONDITIONS ON WHICH THE INSTALLATION OF WIND POWER GENERATING UNITS WAS GIVEN TO M/S SUZLON ENERGY LIMITED. AS PER THE SCOP E OF WORK, THE OPERATION AND MAINTENANCE OF THE WIND FARM FOR 20 Y EARS FROM THE DATE OF ACCEPTANCE OF THE WIND POWER PROJECT IS AWARDED TO M/S SUZLON ENERGY LIMITED FOR WHICH IT IS TO BE PAID AT THE RA TE OF RS.0.40/KWH IN THE FIRST YEAR AND THEREAFTER, WITH ESCALATIONS AS PER PARA 5 OF THE AGREEMENT. THUS, IT IS ON RECORD THAT THE ENTIRE EX PENDITURE RELATING TO OPERATION AND MAINTENANCE IS BORNE BY M/S SUZLON EN ERGY LIMITED. ON THIS ACCOUNT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS INCURRED EXPENDITURE OF RS.10,29,61,955/- IN RESPECT OF THE WIND POWER GENERATING UNITS ON WHICH DEDUCTION U/S 80IA IS CLA IMED. THEREFORE, THE REDUCTION IN THE CLAIM OF DEDUCTION U/S 80IA IS UNJ USTIFIED AND UNCALLED FOR. ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 18 25. WITHOUT PREJUDICE TO ABOVE, IT WAS FURTHER SUBM ITTED THAT THE AO HAS CONSIDERED THE EMPLOYEES BENEFIT AND ESTABLISHM ENT AND OTHER MISCELLANEOUS EXPENSES FOR PROPORTIONATE ALLOCATION AGAINST THE WIND POWER PLANT. THIS IS INCORRECT FOR THE REASON THAT WHATEVER EXPENDITURE IS RELATABLE TO THE INCOME FROM THE SAID INDUSTRIAL UNDERTAKING HAS BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNIT S. THE LOWER AUTHORITIES HAVE NOT CONSIDERED THIS FACTUAL ASPECT . IN FACT, THE ASSESSEE MAINTAINS THE UNIT WISE DETAILS OF THE EXPENDITURE OF THE HEAD OFFICE AND VARIOUS MINING UNITS. THEREFORE, THE EXPENDITURE IN CURRED ON ADMINISTRATION AT THESE MINING UNITS CANNOT BE ALLO CATED TOWARDS THE POWER GENERATING UNITS. 26. IT WAS FURTHER SUBMITTED THAT THE TOTAL EXPENDI TURE CONSIDERED BY THE AO FOR ALLOCATION IS RS.69,53,38,695/-. THIS AL LOCATION ITSELF IS FAULTY. IT MAY BE NOTED THAT OUT OF EMPLOYEES BENEFIT EXPEN SES OF RS.144,07,96,406/-, THE EXPENDITURE AT CORPORATE OF FICE IS ONLY RS.19,93,68,866/-. THE REMAINING EXPENDITURE IS ON MINING UNITS. THEREFORE, ALLOCATION OF SUCH EXPENSES AT RS. 40,34 ,22,994/- IS INCORRECT. SIMILARLY, THE EXPENDITURE ON ESTABLISHM ENT & OTHER EXPENSES AT CORPORATE OFFICE AFTER EXCLUDING DONATION IS RS. 19,05,74,459/-. FURTHER, IN AY 2010-11, THE AO HIMSELF IN ORDER U/S 143(3) /147 DT. 29.12.2017 HAS EXCLUDED THE SELLING EXPENSES, BUSIN ESS PROMOTION EXPENSES AND PACKING CHARGES FOR ALLOCATING THE SAM E FOR WORKING OUT THE INCOME FROM THE WINDMILL BY HOLDING THAT THE SA ME HAS NO NEXUS WITH THE WINDMILL. THUS, ASSUMING THE STAND OF THE AO TO BE CORRECT, ONLY AN AMOUNT OF RS.38,99,43,325/- (19,93,68,866 + 19,05,74,459) CAN BE ALLOCATED TOWARDS THE POWER GENERATING UNITS . ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 19 27. IT WAS FURTHER SUBMITTED THAT THE AO HAS ALLOCA TED THE EXPENDITURE IN THE RATIO OF INCOME OF ELIGIBLE UNIT TO THE TOTAL INCOME. HOWEVER, IN ALL EARLIER YEARS SUCH ALLOCATION IS MA DE ON THE BASIS OF TURNOVER OF THE ELIGIBLE BUSINESS TO THE TOTAL TURN OVER. THE TOTAL TURNOVER IS RS.8,99,03,63,357/- WHEREAS THE TURNOVER OF POWE R GENERATING UNIT IS RS.45,62,99,513/-. THUS, THE PERCENTAGE OF TURNOVER OF THE ELIGIBLE UNIT TO THE TOTAL TURNOVER WORKS OUT AT 5.07%. THEREFORE , EVEN IF ANY PART OF INDIRECT EXPENDITURE IS ALLOCATED AGAINST THE PROFI T OF THE ELIGIBLE UNITS, IT CAN BE ONLY RS.1,97,70,126/- (38,99,43,325*5.07%). EVEN OTHERWISE, IF ANY INDIRECT EXPENDITURE IS ASSUMED TO BE AGAINST T HE PROFITS OF ELIGIBLE UNDERTAKING, IT CAN BE ONLY ON LUMP SUM BASIS AND N OT ON PERCENTAGE BASIS AS DONE BY THE LOWER AUTHORITIES. 28. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 29. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. REGARDING THE FIRST CONTENTIO N OF THE LD AR THAT NONE OF THE EXPENSES AT THE CORPORATE OFFICE PERTAI N TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND MAINTENANCE OF THE PLANT HAS BEEN GIVEN TO SUZLON ENERGIES LTD, IT IS NO DOUBT TRUE THAT THE OPERATION AND MAINTENANCE ACTIVITIES ARE HANDLED BY SUZLON ENERGY AND THE LD CIT(A) HAS RETURNED A FINDING WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. HOWEVER, THE FACT REMAINS THAT THE ASSESS EE ACTIVITIES ARE STILL GUIDED TOWARDS OVERALL SUPERVISION AND MANAGE MENT OF THESE ACTIVITIES AT THE STRATEGIC AND MANAGERIAL LEVEL AN D TO SAFEGUARD THE INTEREST OF THE SHAREHOLDERS AND THE ASSESSEE STILL REMAINS RESPONSIBLE FOR THE ACTIVITIES OF THESE ELIGIBLE UNDERTAKINGS T O THE OUTSIDE WORLD EVEN ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 20 THOUGH AT THE OPERATIONAL LEVEL, THE WHOLE OF ITS A CTIVITIES HAVE BEEN OUTSOURCED TO SUZLON ENERGIES LTD. THEREFORE, THE C ONTENTION OF THE LD AR CANNOT BE ACCEPTED THAT NO EXPENSES IN FURTHERAN CE AND SUPPORT OF WHAT WE HAVE STATED ABOVE HAS BEEN INCURRED BY THE ASSESSEE AND WHICH HAS NO NEXUS WITH THE ELIGIBLE UNDERTAKINGS. TO OUR MIND, THE ACTIVITIES AT THE STRATEGIC, MANAGERIAL, REGULATORY AND OVERALL OVERSIGHT LEVEL DEFINITELY HAVE A NEXUS WITH THE ELIGIBLE UND ERTAKINGS AND THE EXPENSES INCURRED IN RELATION THERETO NEEDS TO BE A LLOCATED TO THE ELIGIBLE UNDERTAKINGS. 30. NOW, COMING TO THE SPECIFICS OF THE EXPENDITUR E INCURRED AT THE CORPORATE AND HEAD OFFICE LEVEL, ON PERUSAL OF THE DETAILS AVAILABLE IN ASSESSEES PAPER BOOK, WE FIND THAT THE EMPLOYEE BE NEFIT EXPENSES OF RS 54,16,363 HAVE BEEN INCURRED AT HEAD OFFICE AND RS 19,93,68,866 AT THE CORPORATE OFFICE WHICH NEEDS TO BE CONSIDERED F OR ALLOCATION. FURTHER, EXPENDITURE ON ESTABLISHMENT AND OTHER EXP ENSES AT THE HEAD OFFICE AND CORPORATE OFFICE HAS BEEN SHOWN AS RS 1, 34,221 AND RS 109,05,74,459 RESPECTIVELY. OUT OF WHICH, DONATI ONS AMOUNTING TO RS 90 CRORES, SELLING EXPENSES OF RS 1,51,40,735 AN D BUSINESS PROMOTION EXPENSES OF RS 40,36,383, AND ADVERTISEME NT AND PUBLICATION EXPENSES OF RS 1,71,76,305 NEEDS TO BE EXCLUDED AND REMAINING EXPENSES NEED TO BE CONSIDERED FOR ALLOCA TION. THE EXPENSES IN THE NATURE OF EMPLOYEE COSTS AND OTHER ESTABLISH MENT EXPENSES SO WORKED OUT NEEDS TO BE ALLOCATED IN THE RATIO OF TU RNOVER FOR THE PURPOSES OF DETERMINING THE ELIGIBLE PROFITS UNDER SECTION 80IA OF THE ACT. THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FI LE OF THE AO TO VERIFY THESE FIGURES AND RECALCULATE THE ELIGIBLE PROFITS FOR THE PURPOSES OF ITA NO. 705 & 773/JP/2018 M/S RAJASTHAN STATE MINES AND MINERALS LTD., VS. DC IT 21 SECTION 80IA OF THE ACT. IN THE RESULT, THE GROUND IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, BOTH THE APPEALS ARE DISPOSED OFF WI TH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 12/11/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12/11/2018 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S RAJASTHAN STATE MINES & MINERALS LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-6, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 705 & 773/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.