DCIT, Circle - 6, Kolkata, Kolkata V. Integrated Coal Mining Ltd., Kolkata

ITA 788/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48236 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-08-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 20-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SINGH
• Assessee Lawyers: SUBHASIS DE; SUSHMITA BASU
• Keywords: Capital asset; Depreciation; Business expenditure; Additional depreciation; Revenue expenditure; Capital expenditure
• Section: 143(3); 28

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE . . . . . . . . , , , , ! ! ! ! /AND ' #!' , $% ) [BEFORE HONBLE SHRI G. D. AGRAWAL, V.P. & HONBLE SHRI MAHAVIR SINGH, JM] !& !& !& !& / I.T.A NO. 788/KOL/2010 #'( )* #'( )* #'( )* #'( )*/ // / ASSESSMENT YEAR: 2003-04 DEPUTY COMMISSIONER OF INCOME-TAX, VS INTEGRATED COAL MINING LTD. CIRCLE-6, KOLKATA (PAN-AAACI 5584 L) (,- /APPELLANT ) (./,-/ RESPONDENT ) & C.O. NO.60/KOL/2010 IN !& !& !& !& / I.T.A NO. 788/KOL/2010 #'( )* #'( )* #'( )* #'( )*/ // / ASSESSMENT YEAR: 2003-04 INTEGRATED COAL MINING LTD. VS. DEPUTY COMMISSIO NER OF INCOME-TAX, (PAN-AAACI 5584 L) CIRCLE-6, KOLKATA. (CROSS OBJECTOR) (RESPONDENT) FOR THE REVENUE: SHRI A. SINGH FOR THE ASSESSEE: SMT. SUSHMITA BASU & SHRI SUB HASIS DE $01 / ORDER PER MAHAVIR SINGH, JM /( ' #!' ' #!' ' #!' ' #!', , , , $% $% $% $% ) THE APPEAL BY REVENUE AND CROSS OBJECTION BY ASSESS EE ARE ARISING OUT OF THE ORDER OF CIT(A)-VI, KOLKATA IN APPEAL NO. CIT(A)-VI/KOL/1091 /CIR-6/05-06 VIDE DATED 12.01.2010. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-6, KOLKATA FO R ASSESSMENT YEARS 2003-04 U/S. 143(3) INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS TH E ACT) VIDE HIS ORDER DATED 15.02.2006. FOR THE SAKE OF BREVITY AND CLARITY, WE DISPOSE OF BOTH THESE APPEAL AND CROSS OBJECTION BY THIS CONSOLIDATED ORDER . 2. AT THE OUTSET, IT IS NOTICED THAT THE APPEAL FIL ED BY THE REVENUE IS DELAYED BY 8 DAYS AND THE CAUSE STATED IN PETITION FOR CONDONATION OF DEL AY SEEMS REASONABLE IN VIEW OF THE REASONS GIVEN THEREIN AND AS CONCEDED BY THE LD. COUNSEL FO R THE ASSESSEE. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE INTERCONNECTED AND COMMON ISSUES IN THIS APP EAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE IS AGAINST THE ORDER OF C IT(A), REVENUE IS AGAINST ALLOWING DEPRECIATION WITHOUT CONSIDERING THE PROVISIONS OF SECTION 35E OF THE ACT AND ASSESSEE IS 2 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 AGAINST DISALLOWING ADDITIONAL DEPRECIATION. FOR T HIS, THE REVENUE RAISED FOLLOWING GROUND NOS. 1 AND 2: 1) THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS, IN ALLOWING DEPRECIATION OF RS.66,00,000/- CLAIMED BY THE ASSESSEE ON GEOGRAPHI CAL REPORT, WITHOUT CONSIDERING THAT THIS IS AN EXPENSES COVERED WELL WITHIN THE PROVISI ONS OF SEC. 35E. 2) THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS, IN ALLOWING DEPRECIATION CLAIM OF THE ASSESSEE WITHOUT CONSIDERING THAT AS PER THE SE COND PROVISO TO SEC. 32(1)(IIA) DEPRECIATION IS TO BE ALLOWED IN RESPECT OF ANY PLA NT & MACHINERY INSTALLED FOR THE PURPOSE OF BUSINESS IN ANY OFFICE PREMISES WHEREAS THE GEOGRAPHICAL REPORT IS NEITHER A PLANT OR MACHINERY FOR IT WAS INSTALLED IN THE OFFI CE PREMISES. FOR THIS, ASSESSEE RAISED THE FOLLOWING GROUND NOS. 1 AND 2: 1. THAT THE LD. CIT(A) ERRED IN NOT APPRECIATING T HAT THE GEOGRAPHICAL REPORT IS A PLANT OF THE ASSESSEES BUSINESS. 2. THAT, THE LD. CIT(A) FURTHER ERRED IN NOT APPREC IATING THAT THE GEOGRAPHICAL REPORT, BEING PLANT OF THE ASSESSEES BUSINESS IS ENTITLE D TO DEPRECIATION U/S. 32 OF THE INCOME- TAX ACT, 1961 INCLUDING ADDITIONAL DEPRECIATION U/S . 32(1)(IIA) THEREOF. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY ENGAGED IN THE BUSINESS OF MINING AND EXTRACTION OF COAL AN D IT COMMENCES MINING OPERATION W.E.F. 18 TH MAY, 2002. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS DISALLOWED DEPRECIATION ON PAYMENT FOR GEOLOGICAL REPORT (IN SHORT GR) MADE BY ASSESSEE AMOUNTING TO RS.1.65 CR. THE ASSESSEE IN ITS BOOKS OF ACCOUNT DE BITED A SUM OF RS.1.65 CR. ON ACCOUNT OF GR AND CAPITALIZED THE SAME UNDER THE HEAD PLANT AND MACHINERY AND CLAIMED DEPRECIATION AT 25% AND FURTHER CLAIMED ADDITIONAL DEPRECIATION AT 15% U/S. 32(1)(IIA) OF THE ACT. THE ASSESSING OFFICER CONSIDERING THE PROVISIONS OF SECTION 35E O F THE ACT DISALLOWED DEPRECIATION AND ADDITIONAL DEPRECIATION BY HOLDING AS UNDER: KEEPING IN VIEW OF THE ABOVE, THE EXPENDITURE ON P URCHASE OF GEOGRAPHICAL REPORT IS CONSIDERED U/S. 35E OF THE ACT AND ALLOWED AS PE R ITS PROVISIONS. IN OTHER WORDS, THE DEPRECIATION CLAIM ON THE REPORT IS DISALLOWED AND THE DEPRECIATION CLAIM IS REDUCED BY RS.66,00,000/-. THERE IS ONE MORE ASPECT REGARDING ADDITIONAL DEPRE CIATION CLAIM OF 15% AS PER SECTION 32(1)(IIA) OF THE ACT. AS ABOVE THE DEPREC IATION CLAIM ON THE GEOGRAPHICAL REPORT IS NOT ACCEPTED, WITHOUT PREJUDICE EVEN THO UGH ACCEPTING THE CLAIM OF THE ASSESSEE FOR DEPRECIATION U/S. 32 ON GEOGRAPHICAL REPORT, THE ASSESSEE WILL NOT BE ALLOWED TO CLAIM ADDITIONAL DEPRECIATION U/S. 32(1) (IIA). THE SECOND PROVISO TO SEC. 32(1)(IIA) STATES THAT NO DEPRECIATION SHALL BE ALL OWED IN RESPECT OF ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREMISES. THE GEOGR APHICAL REPORT IS BASICALLY AN OFFICE DOCUMENT AND AFTER THE STUDY OF THIS DOCUMENT THE DETAILED FEASIBILITY REPORT, THE EXPENSES OF WHICH HAVE BEEN CLAIMED BY THE ASSESSEE U/S. 35E, IS PREPARED. THEREFORE, THE GEOGRAPHICAL REPORT IF AT ALL IT CAN BE CONSI DERED A PLANT IS CERTAINLY BE SAID TO 3 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 BE INSTALLED IN THE OFFICE PREMISES. THEREFORE, THE ASSESSEE IS NOT ENTITLED TO CLAIM ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT. 5. THE CIT(A) ALLOWED DEPRECIATION BUT DISALLOWED A DDITIONAL DEPRECIATION BY HOLDING AS UNDER: I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLA NT AND ALSO THE ORDER OF A.O. THE A.O. HAS TREATED THE EXPENDITURE INCURRED ON PURCHA SING THE GEOGRAPHICAL REPORT WITHIN THE AMBIT OF SECTION 35E OF THE ACT. I AGREE WITH THE DECISION OF THE A.O. THAT BY ACQUIRING GEOGRAPHICAL REPORT THE ASSESSEE HAS NO T ACQUIRED THE RIGHT OVER THE MINING AREA. THE ACQUISITION OF REPORT IS ONLY A CONDONATI ON IN ACQUIRING RIGHTS OVER THE MINE AS PER SUBMISSIONS OF APPELLANT. THE LD. A/R HAS NOT FURNISHED ANY DOCUMENT TO PROVE THAT BY ACQUIRING GEOGRAPHICAL REPORT THE ASSESSEE HAS A CQUIRED THE RIGHT OVER THE MINING AREA. IN NORMAL COURSE, THE MINE OR COAL BLOCK IS ALLOTTED DEPENDING ON THE TENDER QUOTATIONS. THE ARGUMENT OF THE APPELLANT THAT PURC HASE OF REPORT AMOUNTS TO ACQUISITION OF RIGHTS OVER THE DEPOSITS IS WITHOUT ANY BASIS. THEREFORE, EXPENSES ON GEOGRAPHICAL REPORT CANNOT BE EQUATED WITH THE EXPENSE OF ACQUI SITION OF MINING RIGHTS. THE APPELLANT HAS SEPARATELY CLAIMED DEPRECIATION ON M INING RIGHTS AND MINING LEASE CHARGES AS INTANGIBLE ASSETS. WHAT IS PLANT? PLANT IN ITS ORDINARY SENSE, INCLUDE S WHATEVER APPARATUS IS USED BY A BUSINESS MAN FOR CARRYING ON HIS BUSINESS NOT HIS S TOCK IN TRADE WHICH HE BUYS OR MAKES FOR SALE, BUT ALL GOODS AND CHATTELS FIXED OR MOVAB LE, WHICH HE KEEPS FOR EMPLOYMENT IN HIS BUSINESS WITH SOME DEGREE OF DURABILITY. THE FI NANCE ACT 2003 HAS AMENDED THE DEFINITION OF PLANT IN SECTION 43(3) FROM THE A.Y . 2004-05 TO EXPRESSLY EXCLUDE BUILDINGS FROM ITS SCOPE. THE DEFINITION OF PLANT IS ONLY INCLUSIVE AND THEREFORE, A RESORT TO THE DIVIDED CASES BECOMES NECESSARY. CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN 157 ITR 86, GEOGRAPHICAL REPORT CANNOT BE TERMED AS A TOOL OF APPELLANTS TRADE WITH WHICH HE CARRIES ON HIS BUSINESS. THE GEOGRAPH ICAL REPORT FURNISHED BY THE APPELLANT WAS PERUSED. AS SEEN FROM THIS REPORT, IF GIVES THE GENERAL DESCRIPTION OF THE GEOGRAPHY OF THE LOCATION OF THE MINE AND THE TECHNICAL DETAI LS OF THE COAL SEAMS. AS SEEN FROM THE CONTENTS OF THE GEOGRAPHICAL REPORT, IT CONTAINS GE NERAL DESCRIPTION OF THE MINE AREA AND THE KNOW-HOW OF THE MINE. THERE ARE TECHNICAL DETAI LS OF THE COAL SEAM. THE REPORT ALSO MENTIONS THE MINEABLE POTENTIALITY OF THE BLOCK AND TECHNICAL DESCRIPTION OF THE DIFFERENT LAYERS OF THE SEAMS OF THE SARSHATALI BLOCK. IT IS ONLY A GUIDANCE REPORT IN GENERAL. IT CANNOT BE THE TOOL WITH WHICH THE APPELLANT CARRIES ON HIS BUSINESS. IN VIEW OF THIS THE ARGUMENT OF THE APPELLANT THAT REPORT IS A PLANT CA NNOT BE ACCEPTED. THE GEOGRAPHICAL REPORT GIVES ONLY GENERAL IDEA OF THE MINE AND IS N OT THE BASIS OF FUNDAMENTAL TO THE ASSESSEES BUSINESS. THE PERUSAL OF THE GEOGRAPHICAL REPORT CONTENTS C ONSTITUTE THE KNOW-HOW OF THE DEPOSITS AND GENERAL CONDITIONS. AS STATED BY THE ASSESSEE I N ITS SUBMISSION DATED 21.2.2005 THIS REPORT IS A FUNDAMENTAL DOCUMENT WHICH IS ESSENTIAL TO ASSESS THE FEASIBILITY OF THE MINE, TO EVALUATE ECONOMICS OF THE MINE AND CONTAINS THE MINE PLAN ACCORDING TO WHICH THE MINING ACTIVITY IS TO BE CARRIED ON. THE REPORT GIV ES THE IDEA OF THE NATURE OF DEPOSIT AND WHETHER MINING ACTIVITY CAN BE CARRIED ON IN THAT L OCATION. IN MY OPINION IT IS KNOW-HOW AND IS INTANGIBLE ASSET U/S 32(1)(II) OF I. T. ACT. REGARDING ADDITIONAL DEPRECIATION CLAIM OF 15% AS PER SECTION 32(IIA) OF THE ACT, APPELLANT IS NOT ELIGIBLE FOR THE SAME. THE SECOND PROVISO TO SECTION 32(1)(IIA) STATES THAT NO DEPREC IATION SHALL BE ALLOWED IN RESPECT OF ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREMISES . THE GEOGRAPHICAL REPORT IS BASICALLY AN OFFICE DOCUMENT AND IS TREATED AS INTA NGIBLE ASSET AND NOT AS A PLANT. THE APPELLANT IS NOT ENTITLED TO CLAIM ADDITIONAL DEPRE CIATION U/S 32(1)(IIA) OF THE I. T. ACT. I AGREE WITH THE A.O. ON THIS ISSUE. THE AO IS DIRECT ED TO ALLOW DEPRECIATION AT THE 4 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 APPLICABLE RATE BY TREATING THE GEOGRAPHICAL REPORT AS AN INTANGIBLE ASSET. THIS GROUND OF APPEAL IS PARTLY ALLOWED. AGGRIEVED, NOW BOTH ARE IN CROSS APPEALS. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US ASSESSEE CONTENTED THAT GR IS A DOCUMENT, WHICH GAVE RIGHT TO THE ASSESSEE TO WIN AND COMMERCIALLY EXPLOIT THE DEPOSITS OF COAL RESERVE I N THE COAL BLOCK, INTER ALIA, IT CONTAINS THE LOCATION, THE BOUNDARY, THE TOPOGRAPHY, THE CLIMATE , THE GEOMETRY, THE NATURE, THE QUALITY AND THE QUANTITY OF COAL RESERVE IN THE COAL BLOCK. THE ASS ESSEE CLAIMED THAT THE EXPENDITURE INCURRED BY THE ASSESSEE FOR PURCHASING THE REPORT FORMED PART OF EXPENDITURE INCURRED BY THE COMPANY FOR ACQUISITION OF RIGHTS OVER THE DEPOSITS OF MINERALS I.E. COAL AT SARSHATALI COAL BLOCK. NOW THE QUESTION ARISES WHETHER THIS REPORT I.E. GR PURCHAS ED BY THE ASSESSEE FORMS PLANT FOR WHICH THE ASSESSEE HAS CLAIMED DEPRECIATION AT 25% AND ADDITI ONAL DEPRECIATION AT 15% UNDER CLAUSE (A) OF 1 ST PROVISO TO SECTION 32(1)(IIA) OF THE ACT. THE ASS ESSEE HAS FILED COPY OF GEOLOGICAL REPORT FOR THE EXPLORATION OF COAL IN SARSHATALI BLOCK, RANIGA NJ COALFIELD, BURDWAN DIST. OF WEST BENGAL WHICH CONTAINS LOCATION, BOUNDARY, THE TOPOGRAPHY, THE DRAINAGE, THE CLIMATE, THE NATURE, THE GEOMETRY, THE QUALITY AND THE QUANTITY OF A COAL RE SERVE IN A PARTICULAR COAL BLOCK. THIS PARTICULAR GR CONTAINS LOCATION AND AREA, EXTEND, ACCESSABILIT Y, PHYSIOGRAPHY, DRAINAGE, CLIMATE, GEOLOGICAL MAPPING, SCOPE AND LIMITATION, GEOLOGICA L STRUCTURE, COAL SEAMS, DESCRIPTION AND QUALITY OF COAL SEAMS INCLUDING RESERVES. WE FIND F ROM THIS GR THAT IN LOCATION MAP, INCLUDING GEOLOGICAL MAP, THE ENTIRE STRUCTURE OF PLATES IS G IVEN WHICH INDICATE THE VERTICAL SEAMS OF COAL. THIS REPORT CONTAINS THE DETAILS REGARDING RANIGANJ COALFIELD COVERING AN AREA OF ABOUT 1600 SQ.KM., WHICH IS SOMEWHAT ELLIPTICAL IN SHAPE WITH MAJOR PART FALLING WITHIN BURDWAN AND SOME PARTS IN BIRBHUM, BANKURA AND PURULIA DISTRICTS OF WEST BENGAL AND MINOR PARTS IN DHANBAD AND SANTHAL PARGANA DISTRICTS OF BIHAR. THE COALFIE LD IS BOUNDED BY LATITUDES N23 30 & N23 52 AND THE LONGITUDES E86 25 & E87 37. THE REPOR T ALSO CONTAINS THE SEDIMENTARY SEQUENCE OF AREA EXCLUDING THE QUANTINARY LATERITE AND RECENT/S UB-RECENT ALLUVIUM AND SOIL, WHICH BELONGS TO GONDWANA SUB-GROUP. FURTHER IT GIVES INFORMATION AB OUT THE GENERAL STRATIGRAPHIC SEQUENCE IN AGE, FORMATION AND LITHOLOGY ALONG WITH REGIONAL ST RUCTURE AND GEOLOGY OF THE BLOCK. IT PROVIDES INFORMATION REGARDING GEOLOGICAL STRUCTURE I.E. HOW MUCH IS TO STRIKE AND HOW DEEP INCLUDING FAULTS. THIS REPORT ALSO DESCRIBES THE DESCRIPTION OF FAULTS WHICH NORMALLY OCCUR IN SARSHTALI BLOCK. THIS REPORT FURTHER DETAILED OUT COAL SEAMS FOR EXPLORATION IN SARSHTALI BLOCK, WHICH PROVED THE EXISTENCE OF 6 INDEX SEAMS IN THE FORMAT ION AND DESCRIBE THE INDIVIDUAL SEAMS ALSO. THIS REPORT CO-RELATES SEAMS/SECTIONS. EVEN THIS RE PORT CONTAINS DESCRIPTION AND QUALITY OF COAL SEAMS GENERATING COAL. THIS MEANS THAT THIS GR IS A DOCUMENT WHICH GIVES GENERAL DESCRIPTION 5 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 OF THE GEOGRAPHY, LOCATION OF THE MINE AND TECHNICA L DETAILS OF COAL SEAMS AND QUALITY OF COAL AVAILABLE IN THAT COALFIELD. WE HAVE SEEN FROM THE CONTENTS OF THE GR, THAT IT CONTAINS GENERAL DESCRIPTION OF THE MINING AREA AND THE KNOWHOW OF T HE MINE. THE REPORT ALSO MENTIONS THE MINEABLE POTENTIALITY OF THE BLOCK AND TECHNICAL DE SCRIPTION OF DIFFERENT LAYERS OF THE COAL SEAMS IN SARSHTALI COAL BLOCK. ACCORDINGLY, THIS GR IS A FUNDAMENTAL DOCUMENT TO ASSESS THE FEASIBILITY OF THE MINE, EVALUATE ECONOMICS OF MINE AND ALSO CO NTAIN MINE PLAN ACCORDING TO WHICH MINING ACTIVITY IS TO BE CARRIED ON. THIS REPORT GIVES AN IDEA OF THE NATURE OF DEPOSITS I.E. MINERALS I.E. COAL AND WHETHER MINING ACTIVITY CAN BE CARRIED IN THIS LOCATION OR NOT. IT MEANS THAT THIS GR IS NOT A SOURCE FOR ACQUIRING RIGHT OVER MINES OR ACQU ISITION OF RIGHT OVER THE DEPOSITS. THE EXPENSES INCURRED BY THE ASSESSEE ON THIS GR CANNOT BE EQUATED WITH THE EXPENSES OF ACQUISITION OF MINING RIGHTS AND HENCE, THIS REPORT CONSTITUTES PLANT OR NOT. FOR THIS WE HAVE TO GO TO THE DEFINITION OF PLANT AS GIVEN IN SECTION 43(3) OF THE ACT. THE RELEVANT SECTION 43(3) READS AS UNDER:- DEFINITION OF CERTAIN TERMS RELEVANT TO INCOME FRO M PROFITS AND GAINS OF BUSINESS OR PROFESSION. 43. IN SECTIONS 28 TO 41 AND IN THIS SECTION, UNLES S THE CONTEXT OTHERWISE REQUIRES- (1).. (2). (3) PLANT INCLUDES SHIPS, VEHICLES, BOOKS, SCIENT IFIC APPARATUS AND SURGICAL EQUIPMENT USED FOR THE PURPOSES OF THE BUSINESS OR PROFESSION BUT DOES NOT INCLUDE TEA BUSHES OR LIVESTOCK OR BUILDINGS OR FURNITURE AND FITTINGS. THIS DEFINITION OF PLANT CLARIFIES THAT THIS IS ONL Y INCLUSIVE DEFINITION AND FURTHER EXCLUDES TEA BUSHES OR LIVESTOCK. FINANCE ACT 2003 HAS AMENDED C LAUSE 3 OF SECTION 43 TO PROVIDE FOR EXCLUSION OF THE ASSETS NAMELY BUILDINGS AND FURNIT URE AND FITTINGS FROM THE DEFINITION OF THE EXPRESSION PLANT. IN SUCH A SITUATION, AFTER GOIN G THROUGH THIS REPORT, WE FIND THAT THIS GIVES GENERAL DESCRIPTION OF GEOGRAPHY, LOCATION OF MINE, TECHNICAL DETAILS OF COAL SEAMS AND CONTAINS GENERAL DESCRIPTION OF MINING AREA, KNOWHOW OF MINE S AND TECHNICAL DETAILS OF COAL SEAMS. THIS REPORT ALSO CONTAINS POTENTIALITY OF MINING IN THE COAL BLOCK AND TECHNICAL DESCRIPTION OF DIFFERENT LAYERS OF COAL SEAMS IN THIS COAL BLOCK. FROM THIS REPORT, WE CANNOT ASSESS WHETHER THIS IS A TOOL TO HOLD THE SAME AS PLANT BUT IT SEEMS TH AT THIS IS GUIDANCE REPORT AND IT GIVES GOOD IDEA ABOUT THE FEASIBILITY OF MINE TO EVALUATE ECONOMICS OF MINE AND ALSO CONTAINS PLAN ACCORDING TO WHICH MINING ACTIVITY IS TO BE CARRIED ON. THIS REP ORT ALSO GIVES IDEA OF COAL DEPOSITS AND FOR THAT HOW MINING ACTIVITY IS TO BE CARRIED OUT IN TH AT LOCATION. THE HONBLE APEX COURT IN THE CASE OF SCIENTIFIC ENGINEERING HOUSE P. LTD. VS. CI T (1986) 157 ITR 86 (SC) HELD THAT READING 6 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 CLAUSES 3 AND 6 (A) TOGETHER, IT WAS CLEAR THAT REN DITION OF DOCUMENTATION SERVICE WAS REALLY THE MAIN SERVICE TO BE RENDERED BY THE FOREIGN COLLABOR ATOR; (II) THAT THE VARIOUS DOCUMENTS SUCH AS DRAWINGS, DESIGNS, CHARTS, PLANS, PROCESSING DATA A ND OTHER LITERATURE INCLUDED IN DOCUMENTATION SERVICE, THE SUPPLY WHEREOF WAS UNDERTAKEN BY THE FOREIGN COLLABORATOR, MORE OR LESS FORMED THE TOOLS BY USING WHICH THE BUSINESS OF MANUFACTUR ING THE INSTRUMENTS WAS TO BE DONE BY THE APPELLANT AND FOR ACQUIRING SUCH TECHNICAL KNOW-HOW THROUGH THESE DOCUMENTS, A LUMP SUM PAYMENT WAS MADE. THIS EXPENDITURE WAS INCURRED BY THE APPELLANT AS AND BY WAY OF PURCHASE PRICE OF THE DRAWINGS, DESIGNS, CHARTS, PLANS, PROC ESSING DATA AND OTHER LITERATURE, ETC. COMPRISED IN DOCUMENTATION SERVICE AND WAS OF A CAPITAL NAT URE AS A RESULT WHEREOF A CAPITAL ASSET OF TECHNICAL KNOW-HOW IN THE SHAPE OF DRAWINGS, DESIGN S, CHARTS, PLANS, PROCESSING DATA AND OTHER LITERATURE WAS ACQUIRED BY THE APPELLANT. (III) T HAT 'PLANT' WAS NOT NECESSARILY CONFINED TO AN APPARATUS WHICH WAS USED FOR MECHANICAL OPERATIONS OR PROCESS OR WAS EMPLOYED IN MECHANICAL OR INDUSTRIAL BUSINESS. BUT IN ORDER TO QUALIFY AS 'PLANT ', THE PARTICULAR ARTICLE HAD TO HAVE SOME DEGREE OF DURABILITY. THE TEST TO BE APPLIED WAS: D ID THE ARTICLE FULFILL THE FUNCTION OF A PLANT IN THE ASSESSEE'S TRADING ACTIVITY? WAS IT A TOOL OF H IS TRADE WITH WHICH HE CARRIED ON HIS BUSINESS? IF THE ANSWER WAS IN THE AFFIRMATIVE, IT WOULD BE A 'PLANT'. (IV)THAT THE DRAWINGS, DESIGNS, CHARTS, PLANS, PROCESSING DATA AND OTHER LITERATURE COMPRIS ED IN THE 'DOCUMENTATION SERVICE' AS SPECIFIED IN CLAUSE 3 CONSTITUTED A 'BOOK' AND FELL WITHIN TH E DEFINITION OF 'PLANT' IN SECTION 43(3) OF THE INCOME-TAX ACT, 1961. THE PURPOSE OF RENDERING SUCH DOCUMENTATION SERVICE BY SUPPLYING THESE DOCUMENTS TO THE APPELLANT WAS TO ENABLE IT TO UNDE RTAKE ITS TRADING ACTIVITY OF MANUFACTURING THE ODOLITES AND MICROSCOPES AND THESE DOCUMENTS HA D A VITAL FUNCTION TO PERFORM IN THE MANUFACTURE OF THESE INSTRUMENTS; IN FACT, IT WAS W ITH THE AID OF THESE COMPLETE AND UP-TO DATE SET OF DOCUMENTS THAT THE APPELLANT WAS ABLE TO COM MENCE ITS MANUFACTURING ACTIVITY AND THESE DOCUMENTS REALLY FORMED THE BASIS OF THE BUSINESS O F MANUFACTURING THE INSTRUMENTS IN QUESTION. THAT BY THEMSELVES THESE DOCUMENTS DID NOT PERFORM ANY MECHANICAL OPERATIONS OR PROCESSES DID NOT MILITATE AGAINST THEIR BEING A PLANT SINCE THEY WERE IN A SENSE THE BASIS TOOLS OF THE ASSESSEE'S TRADE HAVING A FAIRLY ENDURING UTILITY, THOUGH OWING TO TECHNOLOGICAL ADVANCES THEY MIGHT OR WOULD IN COURSE OF TIME BECOME OBSOLETE. T HE CAPITAL ASSET ACQUIRED BY THE APPELLANT, VIZ., THE TECHNICAL KNOW-HOW IN THE SHAPE OF DRAWIN GS, DESIGNS, CHARTS, PLANTS, PROCESSING DATA AND OTHER LITERATURE, FELL WITHIN THE DEFINITION OF 'PLANT' AND WAS, THEREFORE, A DEPRECIABLE ASSET. 7. IN OUR OPINION, IT IS ONLY A KNOWHOW AS DESCRIBE D IN SECTION 32(1)(II) OF THE ACT. WHAT IS KNOWHOW, IS DEFINED W.E.F. 1.4.1999 BY NEWLY INSERT ED EXPLANATION 4 TO SECTION 32(1) BY THE FINANCE (NO.2) ACT 1998 COINS A DEFINITION OF THE E XPRESSION KNOWHOW SO AS TO MEAN 7 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 -ANY INDUSTRIAL INFORMATION OR TECHNIQUE LIKELY TO ASSIST IN THE MANUFACTURE OR PROCESSING OF GOODS OR IN THE WORKING OF A MINE, OIL-WELL OR O THER SOURCES OF MINERAL DEPOSITS (INCLUDING SEARCHING FOR DISCOVERY OR TESTING OF DE POSITS FOR THE WINNING OF ACCESS THERETO). ACCORDING TO DEFINITION OF KNOWHOW, THIS REPORT IS AN INTANGIBLE ASSET FALLING U/S 32(1) (II) OF THE ACT ELIGIBLE FOR DEPRECIATION AS CLAIMED BY THE ASS ESSEE. WITH THE CHANGE IN THE ACT BY AMENDING THE DEFINITI ON OF PLANT IN SECTION 43(3) OF THE ACT BY THE FINANCE ACT, 2003, WHICH IS ONLY INCLUSIVE DEFI NITION AND IN ORDER TO ASCERTAIN WHETHER A PARTICULAR ITEM FALLS WITHIN THE CATEGORY OF PLANT OR NOT, VARIOUS PRINCIPLES WHICH EMERGES FROM THE VARIOUS DECISIONS OF HONBLE SUPREME COURT AND HONBLE HIGH COURTS CAN BE SUMMARIZED AS UNDER:- (I) THE FUNCTIONAL TEST IS A DECISIVE TEST. (II) AN ITEM WHICH FALLS WITHIN THE CATEGORY OF BUILDIN G CANNOT BE CONSIDERED TO BE PLANT. BUILDINGS WITH PARTICULAR SPECIFICATION FOR ATMOSPH ERIC CONTROL LIKE MOISTURE TEMPERATURE ARE NOT PLANT. (III) IN ORDER TO FIND OUT AS TO WHETHER A PARTICULAR ITE M IS A PLANT OR NOT, THE MEANING WHICH IS AVAILABLE IN THE4 POPULAR SENSE, I.E. THE PEOPLE CO NVERSANT WITH THE SUBJECT-MATTER WOULD ATTRIBUTE TO IT, HAS TO BE TAKEN. (IV) THE TERM PLANT WOULD INCLUDE ANY ARTICLE OR OBJEC T, FIXED OR MOVABLE, LIVE OR DEAD, USED BY A BUSINESSMAN FOR CARRYING ON HIS BUSINESS AND IT I S NOT NECESSARILY CONFINED TO ANY APPARATUS WHICH IS USED FOR MECHANICAL OPERATIONS O R PROCESS OR IS EMPLOYED IN MECHANICAL OR INDUSTRIAL BUSINESS. THE ARTICLE MUST HAVE SOME DEGREE OF DURABILITY. (V) THE BUILDING IN WHICH THE BUSINESS IS CARRIED ON CA NNOT BE CONSIDERED TO BE A PLANT. (VI) THE ITEM SHOULD BE USED AS A TOOL OF THE TRADE WITH WHICH THE BUSINESS IS CARRIED ON. FOR THAT PURPOSE THE OPERATIONS IT PERFORMS HAVE TO BE EXAMI NED. FROM THE ABOVE, IF WE CONSIDER THIS REPORT AS A PLA NT, EVEN THEN ASSESSEE IS NOT ELIGIBLE FOR ADDITIONAL DEPRECIATION IN VIEW OF THE SECOND PROVI SO TO CLAUSE (IIA) OF SECTION 32(1), WHICH CLEARLY DEBARS ADDITIONAL DEPRECIATION ON MACHINERY OR PLANT INSTALLED IN OFFICE PREMISES. THIS REPORT IS CLEARLY A DOCUMENT WHICH ESSENTIALLY ASSE SSES FEASIBILITY OF MINE TO EVALUATE ECONOMICS AND CONTAINS PLAN ACCORDING TO WHICH MINING ACTIVIT Y IS TO BE CARRIED ON. APART FROM THIS, THIS REPORT GIVES IDEA OF NATURE OF COAL DEPOSITS AND WH ETHER MINING ACTIVITY CAN BE CARRIED OUT IN THAT COAL FIELD ACCORDING TO THE PLANS OR NOT. HENC E, THIS IS CONSIDERED AS A PLANT, EVEN THOUGH THIS IS A DOCUMENT OF OFFICE PREMISES FALLING UNDER SECOND PROVISO TO CLAUSE (IIA) OF SECTION 31(1) OF THE ACT. THE RELEVANT SECOND PROVISO TO CL AUSE (IIA) OF SECTION 32 (1) READS AS UNDER:- PROVIDED FURTHER THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF (A) ANY MACHINERY OR PLANT WHICH, BEFORE ITS INSTALLATI ON BY THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE INDIA BY ANY OTHER PERSON; OR (B) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREM ISES OR ANY RESIDENTIAL ACCOMMODATION, INCLUDING ACCOMMODATION IN THE NATURE OF A GUEST HO USE; OR (C) ANY OFFICE APPLIANCES OR ROAD TRANSPORT VEHICLES; O R 8 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 (D) ANY MACHINERY OR PLANT, THE WHOLE OF THE ACTUAL COS T OF WHICH IS ALLOWED AS A DEDUCTION (WHETHER BY WAY OF DEPRECIATION OR OTHERWISE) IN COMPUTING T HE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION OF AN Y ONE PREVIOUS YEAR: IN VIEW OF THE CLEAR BAR IN THE PROVISION FOR NOT A LLOWING ADDITIONAL DEPRECIATION ON MACHINERY OR PLANT INSTALLED IN THE OFFICE PREMISES, WE DISMI SS THE CLAIM OF THE ASSESSEE IN RESPECT TO ADDITIONAL DEPRECIATION. 8. THE NEXT ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN ALLOWING EXPENDITURE INCURRED FOR UP-GRADATION/CONSTRUCTION OF LINK ROAD BELONGING TO BIRBHUM ZILLA PARISHAD AS REVENUE AS AGAINST THE ORDER OF ASSESSI NG OFFICER HOLDING CAPITAL EXPENDITURE. FOR THIS, REVENUE HAS RAISED THE FOLLOWING GROUND NO.3. 3. THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS, IN ALLOWING RS.3,57,45,560/- AS CAPITAL EXPENDITURE WITHOUT CONSIDERING THAT THE SAME WAS INCURRED BY THE ASSESSEE IN RESPECT OF AN ASSET WHICH IS A GOVT. PROPERTY AND THE ASSESSEE HA S ONLY LIMITED RIGHT TO SUCH PROPERTY ALONG WITH OTHER ENTITIES, HENCE SUCH EXPENDITURE IS REVE NUE IN NATURE AS PER SEC. 17(1). 9. THE BRIEF FACTS LEADING TO THIS ISSUE ARE THAT T HE ASSESSEES COAL MINES ARE LOCATED AT SARSATHALI IN THE DISTRICT OF BURDWAN, WEST BENGAL AND THE LOCATION IS NEAR TO BARABANI RAILWAY STATION, WHICH IS ABOUT 10.5 KM. FROM MINES. ACCOR DINGLY, TO FACILITATE TRANSPORT OF COALS FROM ITS MINES, ASSESSEE INCURRED EXPENDITURE OF RS.3,57 ,45,560/- AS CONTRIBUTION TO BURDWAN ZILLA PARISHAD FOR UP-GRADATION/CONSTRUCTION OF A LINK RO AD FROM BARABANI RAILWAY STATION TO MINES AT SARASATHALI. THE ASSESSING OFFICER BY NOTING THAT THIS EXPENDITURE IS INCURRED BY THE ASSESSEE AND IT GIVES ADVANTAGE OF ENDURING NATURE AND HENCE , HE DISALLOWED THE ENTIRE EXPENDITURE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALLOWED THE CLAIM OF THE ASSESSEE BY GIVING FOLLOWING FINDING: I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLA NT AND ALSO THE ORDER OF THE A.O. THE A.O. IN HIS ORDER OBSERVED THAT THE LINK ROAD C ONSTRUCTED BY THE ASSESSEE BELONGS TO BURDWAN ZILLA PARISHAD AND IT IS FOR THEIR USE. IT IS ONLY A COINCIDENCE THAT THE ASSESSEE WILL USE THE ROAD FOR TRANSPORTATION AS ANY OTHER R OAD BELONGING TO THE GOVERNMENT. THE SUBMISSIONS OF THE APPELLANT SHOW THE BUSINESS INTE REST OF THE APPELLANT IN CONTRIBUTING THE AMOUNT FOR CONSTRUCTION OF FINK ROAD BELONGING TO BURDWAN ZILLA PARISHAD. THIS IS PUBLIC ROAD, BUT CONNECTS THE SARASHATALI MINE AND BARABANI RAILWAY SIDING. I HAVE PERUSED THE MEMORANDUM OF UNDERSTANDING BETWEEN THE APPELLANT AND THE BURDWAN ZILLA PARISHAD . THE BUSINESS INTEREST OF THE APPEL LANT IS MENTIONED IN THE OBJECTIVES. IF IT IS ONLY PUBLIC ROAD APPELLANT COULD NOT HAVE CONTRI BUTED MONEY WITHOUT BENEFIT FOR COMPANY. THERE CAN BE NO DOUBT THAT THE CONSTRUCTIO N / UP GRADATION OF THIS ROAD WILL FACILITATE THE BUSINESS OPERATIONS OF THE ASSESSEE EFFICIENTLY AND PROFITABLY. NO ASSET IS ACQUIRED BY THE APPELLANT COMPANY NOR WAS THERE ANY ADDITION TO OR EXPANSION OF THE PROFIT MAKING APPARATUS OF THE APPELLANT. THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE L.H. SUGAR FACTORY AND OILS MILLS (P) LTD. VS. CIT [ 125 ITR 293 (SC)] APPLIES TO THE PRESENT CASE. THE AO IS DIRECTED TO ALLOW THE DEDUCTION OF THE SAID SUM AS REVENUE EXPENDITURE U/S 37(1). THIS GROUND OF APPEA L IS ALLOWED. 9 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 10. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE GENUINENESS OF EXPENDITURE IS NOT DOUBTED BY THE REVENUE. ONLY DISPUTE IS THAT THE LINK ROAD CONSTRUCTED BY THE ASSESSEE BELONGS T O ZILLA PARISHAD AND FOR THEIR USE. ACCORDING TO THE REVENUE, IT IS A COINCIDENCE THAT THE ASSESS EE WILL USE THIS ROAD FOR TRANSPORTATION AS ANY OTHER ROAD BELONGING TO THE GOVERNMENT. WE FIND TH AT ASSESSEE HAD, NO DOUBT, INCURRED EXPENDITURE ON UP-GRADATION/CONSTRUCTION OF LINK RO AD BY MAKING CONTRIBUTION TO BURDWAN ZILLA PARISHAD FROM BARABANI RAILWAY STATION TO MINES OF THE ASSESSEE AT SARASHATALI, WEST BENGAL. WHETHER THIS IS A BUSINESS EXPENDITURE OR NOT? WE FIND THAT THIS ISSUE HAS BEEN ANSWERED BY HONBLE APEX COURT IN THE CASE OF L. H. SUGAR FACTO RY & OILS MILLS (P) LTD. VS. CIT (1980) 125 ITR 293 (SC), WHEREIN THE APEX COURT AT PAGES 2 97 AND 299 HAS HELD AS UNDER: THE AMOUNT OF RS. 50,000 WAS CONTRIBUTED BY THE AS SESSEE UNDER THE SUGARCANE DEVELOPMENT SCHEME TOWARDS MEETING THE COST OF CONS TRUCTION OF ROADS IN THE AREA AROUND THE FACTORY. NOW, THERE CAN BE NO DOUBT THA T THE CONSTRUCTION OF ROADS IN THE AREA AROUND THE FACTORY WAS CONSIDERABLY ADVANTAGEO US TO THE BUSINESS OF THE ASSESSEE, BECAUSE IT FACILITATED THE RUNNING OF ITS MOTOR VEH ICLES FOR TRANSPORTATION OF SUGARCANE SO NECESSARY FOR ITS MANUFACTURING ACTIVITY. IT IS NOT AS IF THE AMOUNT OF RS. 50,000 WAS CONTRIBUTED BY THE ASSESSEE GENERALLY FOR THE PURPO SE OF CONSTRUCTION OF ROADS IN THE STATE OF UTTAR PRADESH, BUT IT WAS FOR THE CONSTRUC TION OF ROADS IN THE AREA AROUND THE FACTORY THAT THE CONTRIBUTION WAS MADE AND IT CANNO T BE DISPUTED THAT IF THE ROADS ARE CONSTRUCTED AROUND THE FACTORY AREA, THEY WOULD FAC ILITATE THE TRANSPORT OF SUGARCANE TO THE FACTORY AND THE FLOW OF MANUFACTURED SUGAR OUT OF THE FACTORY. THE CONSTRUCTION OF THE ROADS WAS, THEREFORE, CLEARLY AND INDUBITABLY C ONNECTED WITH THE BUSINESS ACTIVITY OF THE ASSESSEE AND IT IS DIFFICULT TO RESIST THE CONC LUSION THAT THE AMOUNT OF RS. 50,000 CONTRIBUTED BY THE ASSESSEE TOWARDS MEETING THE COS T OF CONSTRUCTION OF THE ROADS UNDER THE SUGARCANE DEVELOPMENT SCHEME WAS LAID OUT WHOLL Y AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THESE ROADS WERE UNDOUBTEDLY ADVANTAGEOUS TO THE B USINESS OF THE ASSESSEE AS THEY FACILITATED THE TRANSPORT OF SUGARCANE TO THE FACTO RY AND THE OUTFLOW OF MANUFACTURED SUGAR FROM THE FACTORY TO THE MARKET CENTRES. THER E CAN BE NO DOUBT THAT THE CONSTRUCTION OF THESE ROADS FACILITATED THE BUSINES S OPERATIONS OF THE ASSESSEE AND ENABLED THE MANAGEMENT AND CONDUCT OF THE ASSESSEE' S BUSINESS TO BE CARRIED ON MORE EFFICIENTLY AND PROFITABLY. IT IS NO DOUBT TRUE TH AT THE ADVANTAGE SECURED FOR THE BUSINESS OF THE ASSESSEE WAS OF A LONG DURATION INA SMUCH AS IT WOULD LAST SO LONG AS THE ROADS CONTINUED TO BE IN MOTORABLE CONDITION, BUT I T WAS NOT AN ADVANTAGE IN THE CAPITAL FIELD, BECAUSE NO TANGIBLE OR INTANGIBLE AS SET WAS ACQUIRED BY THE ASSESSEE NOR WAS THERE ANY ADDITION TO OR EXPANSION OF THE PROFI T-MAKING APPARATUS OF THE ASSESSEE. THE AMOUNT OF RS. 50,000 WAS CONTRIBUTED BY THE ASS ESSEE FOR THE PURPOSE OF FACILITATING THE CONDUCT OF THE BUSINESS OF THE ASS ESSEE AND MAKING IT MORE EFFICIENT AND PROFITABLE AND IT WAS CLEARLY AN EXPENDITURE ON REV ENUE ACCOUNT. 11. WE FIND THAT THIS ISSUE IS COVERED BY THE DECIS ION OF HONBLE APEX COURT IN THE CASE OF L. H. SUGAR FACTORY & OILS MILLS (P) LTD. (SUPRA), WHEREIN HONBLE APEX COURT NOTED THAT THE ASSESSEE A SUGAR MANUFACTURER CONTRIBUTED TO THE ST ATE OF UTTAR PRADESH A SUM OF RS.50,000/- FOR CONSTRUCTION OF A ROAD AROUND ITS FACTORY FOR FACIL ITATING THE TRANSPORT OF SUGARCANE INTO THE 10 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 FACTORY AND THE OUTFLOW OF MANUFACTURED SUGAR FROM THE FACTORY TO THE MARKET CENTRES. CONTRIBUTIONS WERE ALSO MADE FOR CONSTRUCTION OF TH E SAID ROAD WHICH BELONGED TO THE UTTAR PRADESH STATE GOVERNMENT BY THE CENTRAL GOVERNMENT AND THE STATE GOVERNMENT EQUALLY. THE EXPENDITURE OF RS.50,000/- INCURRED BY ASSESSEE IN THAT CASE TOWARDS CONTRIBUTION FOR CONSTRUCTION OF A ROAD AROUND ITS FACTORY IS AN EXP ENDITURE IN THE REVENUE FIELD AS IT WAS INCURRED FOR THE PURPOSE OF FACILITATING THE CONDUCT OF THE BUSINESS OF THE ASSESSEE AND MAKING IT MORE EFFICIENT AND PROFITABLE WITHOUT THE ASSESSEE GETTI NG AN ADVANTAGE OF AN ENDURING BENEFIT TO ITSELF. WE FIND THAT IN THE PRESENT CASE ALSO, THE RE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS MADE THE CONTRIBUTION OF RS.3.57 CRORES DURING THE RELEVANT PREVIOUS YEAR TO BURDWAN ZILLA PARISHAD FOR THE PURPOSE OF UP-GRADATION/CONSTRUCTI ON OF A LINK ROAD FROM ITS MINES AT SARASTHALI TO THE BARABANI RAILWAY STATION IN ORDER TO FACILIT ATE TRANSPORTATION OF COAL MINED SO THAT THE BUSINESS OF THE ASSESSEE COULD BE CONDUCTED MORE EF FICIENTLY AND PROFITABLY. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE SAID ROAD IS A PUBLIC ROAD AND BELONGS TO THE BURDWAN ZILLA PARISHAD AND THE ASSESSEE IS NOT OWNER OF THE ROAD. IN VIEW OF THE SETTLED POSITION ON THE ISSUE, WE FIND THAT THE SUM OF RS.3.57 CR. INCURRED DURING THE REL EVANT PREVIOUS YEAR BY THE ASSESSEE TOWARDS CONTRIBUTION FOR UP-GRADATION/CONSTRUCTION OF THE L INK ROAD BELONGING TO THE BURDWAN ZILLA PARISHAD IS ALLOWABLE AS REVENUE EXPENDITURE IN THE YEAR UNDER APPEAL HAVING BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS OF THE COMPANY. WE, ACCORDINGLY, UPHOLD THE ORDER OF CIT(A) ALLOWING THE CLAIM OF DE DUCTION OF THE SUM OF RS.3.57 CR. AS REVENUE EXPENDITURE. THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. 12. IN THE RESULT, APPEAL OF REVENUE AND C.O. OF AS SESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30.6.2011 SD/- SD/- . . . . . . . . , , , , ' ' ' ' #!' #!' #!' #!' , $% (G. D. AGRAWAL) (MAHAVIR SINGH) VICE PRESIDENT JUDICIAL MEMBER ( 2 2 2 2) )) ) DATED 30TH JUNE, 2011 PRONOUNCED BY SD/-(S.V.MEHROTRA) SD/- (M. SINGH) AM 30.6.11 JM 30.6.11 34 #'5 #6 JD.(SR.P.S.) 11 ITA 788/K/2010 INTEGRATED COAL MINING LTD.& CO 60/K/2010 A.Y.03-04 $01 7 .##8 08)9- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT DCIT, CIRCLE-6, KOLKATA 2 ./,- / RESPONDENT, M/S. INTEGRATED COAL MINING LTD., 6, CHURCH LANE, KOLKATA-700 001. 3 . #1' ( )/ THE CIT(A), KOLKATA 4. #1' / CIT, KOLKATA 5 . ?#@ .#' / DR, KOLKATA BENCHES, KOLKATA /8 .#/ TRUE COPY, $01'A/ BY ORDER, ' ! /ASSTT. REGISTRAR .