M/s. Barmer Lignite Mining Company Limited, Jaipur V. Assistant Commissioner Of Income Tax , Circle-6, Jaipur

ITA 799/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4687 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 07-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA DHK
• Keywords: TDS
• Section: 143(3); 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO , JM VK;DJ VIHY LA-@ ITA NO. 798/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 M/S BARMER LIGNITE MINING COMPANY LIMITED, OFFICE NO. 2 & 3, 7 TH FLOOR, MAN UPASANA PLAZA, C-44, SARDAR PATEL MARG, C-SCHEME, JAIPUR 302001. CUKE VS. A.C.I.T., CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCB 0574 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 774/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 D.C.I.T., CIRCLE-6, JAIPUR. CUKE VS. M/S BARMER LIGNITE MINING CORPORATION LTD., SARDAR PATEL MARG, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCB 0574 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 799/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 M/S BARMER LIGNITE MINING COMPANY LIMITED, OFFICE NO. 2 & 3, 7 TH FLOOR, MAN UPASANA PLAZA, C-44, SARDAR PATEL MARG, C-SCHEME, JAIPUR 302001. CUKE VS. A.C.I.T., CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCB 0574 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 2 VK;DJ VIHY LA-@ ITA NO. 775/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 D.C.I.T., CIRCLE-6, JAIPUR. CUKE VS. M/S BARMER LIGNITE MINING CORPORATION LTD., SARDAR PATEL MARG, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCB 0574 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/02/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 14/02/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REV ENUE AGAINST THE TWO SEPARATE ORDERS OF LD.CIT(A)-2, JAIPUR DATED 23/03/2018 FOR THE A.YS. 2013-14 AND 2014-15 IN THE MATTER OF ORDER PA SSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE GROU NDS TAKEN BY THE ASSESSEE AND THE REVENUE FOR THE A.Y. 2013-14 ARE A S UNDER: GROUNDS OF ASSESSEES APPEAL 1. ON FACTS OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7,34,00,000/- MADE BY THE AO BY TREATING INTEREST RECEIPTS, CREDITED TO CAPITAL WORK IN PROG RESS, AS TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAIN ST THE CLAIM OF ASSESSEE THAT THE SAME SHOULD BE REDUCED FROM EX PENDITURE INCURRED DURING CONSTRUCTION PERIOD. 1.1 ON FACTS OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT ALLOWING THE SET-OFF OF INTEREST EXPENSE OF RS. 9,4 6,00,000/- ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 3 DEBITED TO THE CAPITAL WORK IN PROGRESS AGAINST THE SAID INTEREST RECEIPT WITHOUT APPRECIATING THE FACT THAT THERE IS A DIRECT NEXUS OF INTEREST PAID ON THE BORROWED FUNDS WITH THE INT EREST RECEIPTS. 2. ON FACTS OF THE CASE AND IN LAW THE LD. CIT(A) E RRED IN CONFIRMING THE ACTION OF AO IN DISALLOWING MANDATORY CSR EXPEN SES OF RS.2,00,00,000/- PROVIDED AS PER TERMS OF ENVIRONME NT CLEARANCE GRANTED BY THE MINISTRY OF ENVIRONMENT & FORESTS (MOEF) WHICH WERE INCURRED WHOLLY AND EXCLUSIVELY F OR THE PURPOSE OF THE BUSINESS. 3. ON THE FACTS OF THE CASE THE LD. CIT(A) ERRED IN REMANDING BACK THE ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER ON ALLOWANCE OF THE AMORTIZATION OF SURFACE RIGHTS CLAIMED BY THE A PPELLANT, WITHOUT APPRECIATING THE FACT THAT ALL THE DETAILS AS REQUIRED FOR VERIFICATION FOR ALLOWANCE OF THE SAME, AS DIRECTED BY THE HONBLE ITAT JAIPUR FOR AY 2012-13 IN CASE OF THE A PPELLANT, WERE AVAILABLE WITH THE LD. CIT(A). 4. ON THE FACTS OF THE CASE THE LD. CIT(A) ERRED IN REMANDING BACK THE ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER ON ALLOWANCE OF THE CREDIT OF TDS ON INTEREST INCOME AMOUNTING TO R S.20438/-. 5. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 6. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. GROUNDS OF REVENUES APPEAL 1. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCT ION OF RS. 5,56,27,993/- IN RESPECT OF MINES CLOSURE PLAN? 2. THE APPELLANT CRAVES ITS RIGHT TO ADD, AMEND, OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. COMMON IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASS ESSEE AND THE REVENUE IN THE CROSS APPEALS FOR THE A.Y. 2014-15. ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 4 2. AS COMMON GROUNDS HAVE BEEN TAKEN IN BOTH THE AS SESSMENT YEARS UNDER CONSIDERATION, THEREFORE, THE APPEALS F OR BOTH THE YEARS WERE HEARD TOGETHER AND NOW DECIDED BY THIS CONSOLIDATED ORDER. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SEE IS A COMPANY INCORPORATED ON 19.01.2007 AS A JOINT VENTURE COMPA NY (JV) UNDER THE COMPANIES ACT, 1956 WITH M/S RAJASTHAN STATE MINES A ND MINERALS LTD. (RSMML) (A GOVERNMENT OF RAJASTHAN UNDERTAKING) AND M/S RAJ WEST POWER LIMITED (RWPL) AS SHAREHOLDERS (IN THE RATIO O F 51:49 VOTING POWER) TO CARRY OUT LIGNITE MINING ACTIVITIES AT KAP URDI AND JALIPA AT BARMER DISTRICT FOR CAPTIVE USE OF LIGNITE BASED TH ERMAL POWER PLANT OF RWPL. IT IS THUS THE SUBSIDIARY OF RSMML AND THEREF ORE, A GOVERNMENT COMPANY. THE ASSESSEE COMMENCED ITS LIGNITE MINING A CTIVITIES FROM OCTOBER, 2011 AT KAPURDI MINES. THE GOVERNMENT OF RA JASTHAN (GOR) DECIDED TO ALLOW POWER PROJECTS IN THE PRIVATE SECTOR AND INVITED INTERNATIONAL COMPETITIVE SOLICITATIONS FOR SETTING UP A LIGNITE MINING CUM THERMAL POWER PROJECT AT VILLAGE JALIPA AND KAPURDI, DISTRICT BARMER IN RAJASTHAN. UNDER AN IMPLEMENTATION AGREEMENT (IA) D ATED 29TH MAY 2006 , RWPL WAS ALLOWED TO SET UP ITS POWER PLANT AND A SEPAR ATE JV ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 5 COMPANY WAS TO BE FORMED AS A MINING COMPANY FOR MIN ING LIGNITE TO BE SUPPLIED FOR THE THERMAL POWER PLANT OF RWPL. 5. DURING THE COURSE OF SCRUTINY ASSESSMENT FOR A.Y . 2013-14, THE ASSESSING OFFICER MADE ADDITIONS/DISALLOWANCES AS UN DER: 1. MINE CLOSURE CHARGES RS. 5,56,27,993/- 2. INTEREST ON DEPOSITS RS. 7,34,00,000/- 3. INTEREST ON FDR RS. 28,56,783/- 4. CSR EXPENDITURE RS. 2,00,00,000/- 5. INTEREST ON REFUND RS. 37,672/- 6. DISALLOWANCE OF AMORTIZATION RS. 14,38,96,693/- 6. BY THE IMPUGNED ORDER, THE LD CIT(A) HAS UPHELD T HE ADDITION WITH RESPECT TO THE INTEREST RECEIPTS BEING TAXABLE AS I NCOME FROM OTHER SOURCES CREDITED TO THE CAPITAL WORK IN PROGRESS, DI SALLOWANCE OF MANDATORY CSR EXPENSES OF RS. 2.00 CRORES. HOWEVER, THE LD. CIT(A) HAS DELETED THE ADDITION WITH RESPECT TO MINE CLOSURE EX PENSES OF RS. 5,56,27,993/-. 7. AGAINST THE ABOVE SAID ORDER, BOTH THE ASSESSEE AND THE REVENUE ARE IN FURTHER APPEALS BEFORE US. 8. AT THE OUTSET, THE LD AR OF THE ASSESSEE PLACED ON RECORD THE ORDER OF THE ITAT IN ASSESSEES OWN CASE AND FURTHER THE OR DER OF THE HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE FOR THE A.Y. 2012-13 IN ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 6 DBITA NO. 54/2018 AND M.A. ORDER DATED 08/08/2018 I N D.B. CIVIL MISC. APPLICATION NO. 176/2018. 9. WITH REGARD TO GROUND TAKEN BY THE ASSESSEE FOR TREATING THE INTEREST INCOME AS INCOME FROM OTHER SOURCES, WE FOU ND THAT THE ASSESSING OFFICER HAD ADDED RS. 7,34,00,000/- ON AC COUNT OF INTEREST CREDITED TO THE CAPITAL WORK IN PROCESS (CWIP) IN THE TAXABLE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCE. 10. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 11. AS THE LD. AR, THE HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE FOR THE A.Y. 2012-13 VIDE ORDER DATED 24/7/201 8 HAD DECIDED THE ISSUE WITH REGARD TO TAXING INTEREST RECEIPTS AS INC OME FROM OTHER SOURCES INSTEAD OF REDUCING FROM EXPENDITURE INCURR ED DURING CONSTRUCTION PERIOD IN FAVOUR OF THE ASSESSEE. HE I NVITED OUR ATTENTION TO THE SIMILAR ISSUE RAISED BEFORE THE HONBLE RAJASTH AN HIGH COURT AND AFTER CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENTS O F OTHER HON'BLE HIGH COURTS, THE ISSUE WAS DECIDED IN ASSESSEES FAVOUR. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION A RE SAME, IT WAS SUBMITTED THAT RESPECTFULLY FOLLOWING THE DECISION O F THE HONBLE ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 7 RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE, THERE IS NO MERIT IN TAXING INTEREST RECEIPTS AS INCOME FROM OTHER SOURCES. IN VIEW OF THE DECISION OF RAJASTHAN HIGH COURT (SUPRA), THE INTEREST RECEIPT IS TO BE REDUCED FROM THE CAPITAL WORK IN PROGRESS OF JALIPA MINES AND THE REFORE, NO INTEREST INCOME COULD BE CHARGED TO TAX. ACCORDINGLY THE ADD ITION OF RS. 7.34 CRORES CONFIRMED BY THE LD. CIT(A) BY HOLDING THAT I NTEREST INCOME IS TO BE TAXED AS INCOME FROM OTHER SOURCES IS DIRECTED T O BE DELETED. 12. WE HAD CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT EXACTLY ON SIMILAR ISSUE OF TREATING THE INTEREST INCOME AS INCOME FROM OTHER SOURCES, THE TRIBUNAL HAVE CONFIRM ED THE ACTION OF THE LOWER AUTHORITIES FOR THE A.Y. 2012-13. THE ASSESSEE FILED APPEAL BEFORE THE HONBLE RAJASTHAN HIGH COURT RAISING FOLLOWING S UBSTANTIAL QUESTIONS OF LAW: I) WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. ITAT HAS NOT LEGALLY ERRED IN HOLDING THAT THE INTEREST RECE IPT OF RS.12,64,01,627/- IN THE HANDS OF THE APPELLANT IS INCOME FROM OTHER SOURCES? II) WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW THE ID. ITAT HAS NOT LEGALLY ERRED IN DISALLOWING THE MANDA TORY CSR EXPENSES CLAIMED FOR RS.95,08,197/- PURSUANT TO THE TERMS AN D CONDITIONS OF THE ENVIRONMENT CLEARANCE GRANTED BY MINISTRY OF ENVIRO NMENT AND FOREST? ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 8 13. VIDE ORDER DATED 24/7/2018, THE HON'BLE HIGH CO URT DECIDED THE ISSUE. THEREAFTER VIDE ORDER DATED 08/08/2018 IN D.B . CIVIL MISC. APPLICATION NO. 176/2018, THE HON'BLE HIGH COURT HA S HELD AS UNDER: BY WAY OF THIS APPLICATION, THE APPLICANT HAS PRAY ED THE FOLLOWING RELIEF(S):- 'THE PRESENT RECTIFICATION APPLICATION MAY PLEASED BE ALLOWED AND THE JUDGMENT DATED 24.07.2018 BE APPROPRIATELY RECTIFIE D/MODIFIED IN VIEW OF THE SUBMISSIONS MADE ABOVE. IN VIEW OF THE AVERMENTS MADE IN THE APPLICATION, T HE ORDER DATED 24.07.2018 IS MODIFIED IN THE FOLLOWING TERMS WHICH MAY BE READ AS PARA 7 OF THE JUDGMENT:- 'TAKING INTO CONSIDERATION THE DECISION OF SUPREME COURT IN THE CASE OF BOKARO STEEL LTD. (SUPRA) AND OTHER JUDGMENTS CITED SUPRA, BOTH THE ISSUES ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND A GAINST THE DEPARTMENT.' THE MISC. APPLICATION IS ALLOWED. 14. EXACTLY SIMILAR ISSUE HAS BEEN RAISED BY THE AS SESSEE WITH REGARD TO THE TREATMENT OF INTEREST INCOME, WHICH HAS BEEN HELD TO BE INCOME FROM OTHER SOURCES BY THE DEPARTMENTAL AUTHORITIES. AS ON THE SIMILAR FACTS THE ISSUE HAS ALREADY BEEN DECIDED BY THE HON BLE RAJASTHAN HIGH COURT IN ASSESSEES FAVOUR AS STATED ABOVE, RESPECT FULLY FOLLOWING THE SAME, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE LOWER AUTHORITIES FOR TREATING THE INTEREST INCOME AS INCOME FROM OTHER S OURCES. WE DIRECT ACCORDINGLY. ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 9 15. THE ISSUE WITH REGARD TO DISALLOWING THE MANDATORY CSR EXPENSES HAVE ALSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HONBLE RAJASTHAN HIGH COURT DATED 24/7/2018. THE QU ESTIONS RAISED BEFORE THE HON'BLE HIGH COURT AS STATED ABOVE, IS E XACTLY SAME AS IN THE PRESENT APPEAL. WE HAD GONE THROUGH THE DECISION OF THE HON'BLE HIGH COURT WHEREIN WE FOUND THAT VIDE PARA NO. 6, THE HON' BLE HIGH COURT HAS DELETED THE DISALLOWANCE MADE ON ACCOUNT OF MANDATOR Y SCR EXPENSES. EXACTLY SIMILAR EXPENSES HAVE BEEN DISALLOWED BY THE ASSESSING OFFICER DURING THE YEARS UNDER CONSIDERATION. AS THE FACTS AND CIRCUMSTANCES DURING THE YEARS UNDER CONSIDERATION ARE SAME. RESP ECTFULLY FOLLOWING THE ORDER OF THE HON'BLE HIGH COURT IN ASSESSEES OWN C ASE, WE DO NOT FIND ANY MERIT IN THE DISALLOWANCES MADE BY THE ASSESSING OFFICER IN RESPECT OF THE CSR EXPENSES. 16. THE ASSESSEE IS ALSO IN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) FOR REMANDING THE ISSUE TO THE FILE OF THE ASSESSIN G OFFICER ON THE GROUND OF ALLOWANCE OF AMORTIZATION OF EXPENSES ON SURFACE RIGHTS. IN THIS REGARD, THE LD AR OF THE ASSESSEE HAS INVITED OUR A TTENTION ON THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR THE A .Y. 2012-13 WHEREIN THE TRIBUNAL HAVE RESTORED THE MATTER WITH CERTAIN DI RECTIONS. AS PER LD. AR THE ASSESSEE BEFORE LD. CIT(A) HAS DEMONSTRATED B Y FILING THE RELEVANT NOTES TO ACCOUNTS OF RSMML WHERE IN NOTE N O. 11.6 IT HAS BEEN ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 10 DISCLOSED THAT RSMML HAS NOT TREATED SUCH AMOUNT AS ASSET & LIABILITY IN ITS FINANCIAL STATEMENT. HOWEVER, SINCE THE TITLE OF LAND AT KAPURDI MUTATED TO RSMML, THE SAME IS SHOWN AT NOMINAL VALUE OF RS.L/- IN THE BALANCE SHEET. THUS, IT IS CLEAR THAT RSMML HAS NOT CLAIMED ANY EXPENDITURE IN RESPECT OF THE LAND SO ACQUIRED. THER EFORE, THE LD. CIT(A) INSTEAD OF DIRECTING THE AO TO FOLLOW THE DECISION O F HONBLE ITAT SHOULD HAVE DIRECTED THE AO TO ALLOW THE CLAIM AS ALL THE F ACTS WERE PUT ON RECORD BEFORE HER. 17. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2012-13 WHEREIN WE FO UND THAT THE ISSUE WITH REGARD TO ALLOWING OF AMORTIZATION OF SURF ACE RIGHTS WAS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE ASS ESSING OFFICER WITH CERTAIN DIRECTIONS. THE ITAT IN AY 2012-13 HAS OBSERV ED THAT ADMITTEDLY THE EXPENDITURE HAS BEEN INCURRED THROUGH RSMML BUT IT IS NOT CLEAR WHETHER THE RSMML HAS ALSO CLAIMED SUCH EXPENDITURE. THEREFORE, THE AO WAS DIRECTED TO VERIFY WHETHER RSMML HAS MADE ANY CLAIM ON THE SAME EXPENDITURE WHICH THE ASSESSEE HAS CLAIMED. RE SPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE RESTORE THE ISSUE BACK TO THE ASSESSING OFFICER FOR VERIFYING THE SAME IN TERMS OF THE DIRE CTION OF THE TRIBUNAL IN ASSESSEES OWN CASE. WE DIRECT ACCORDINGLY. ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 11 18. THE DEPARTMENT IN ITS APPEAL IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) ALLOWING THE DEDUCTION IN RESPECT OF MINES CLO SURE EXPENSES. 19. WE HAD CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE LD. CIT(A) HAS ALLOWED THE DEDUCT ION IN RESPECT OF MINES CLOSURE PLAN AFTER FOLLOWING THE DECISION OF T HE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2012-13 DATED 12/10 /2017. 20. WE HAD GONE THROUGH THE ORDER OF THE TRIBUNAL I N ASSESSEES OWN CASE AND FOUND THAT THIS ISSUE WAS DEALT BY THE TRIBU NAL AS UNDER: 15. GROUND NO. 2, IS AGAINST ALLOWING DEDUCTION O F RS. 4,70,80,000/- IN RESPECT OF MINE CLOSURE EXPENSES. 15.1 LD. D/R SUPPORTED THE ORDER OF THE AUTHORITIE S BELOW AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE D ISALLOWANCE. 15.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THIS ISSUE IS SQU ARELY COVERED IN FAVOUR OF THE ASSESSEE. 15.3 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND THAT LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 3.3. OF THE ORDER READ AS UNDER:- 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSES SMENT ORDER AND THE WRITTEN SUBMISSIONS OF THE APPELLANT. AS NOTED, A SUM OF RS. 4,70,80,000/- WAS DEBITED TOWARD MIN CLOSURE CHARGE S, WAS NOT ALLOWED BY THE ASSESSING OFFICER, AS THE SAME HAD N OT BEEN DEPOSITED TO THE MINING DEPARTMENT AND ONLY A PROVISION HAD B EEN MADE. THE ASSESSING OFFICER, AS THE SAME HAD NOT BEEN DEPOSIT ED TO THE MINING DEPARTMENT AND ONLY A PROVISION HAD BEEN MADE. THE ASSESSING OFFICER FURTHER HELD THAT AS PER THE MINE CLOSURE P LAN THE AMOUNT SO ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 12 DEPOSITED IN THE ESCROW ACCOUNT IS INTEREST BEARING AND THE INTEREST IS REALIZABLE AFTER EVERY FIVE YEARS, THEREFORE, THE S UM IS IN THE NATURE OF A DEPOSIT AND NOT EXPENDITURE, HENCE WAS NOT ALLOWA BLE. IN THE PRESENT PROCEEDING, IT HAS BEEN STATED THAT AS PER GUIDELINES ISSUED BY MINISTRY OF COAL, GOVERNMENT OF INDIA, IT IS MANDATORY FOR ALL COAL MINE OWNERS TO PROVIDE FOR AN ANNUAL MINE CLOSURE COST AS PER THE GUIDELINES. THE LIABILITY FOR MINE CLOSURE IS AN ASCERTAINED ON AND THESE EXPENDITURES HAVE TO BE COMPULSORILY INCU RRED AND ARE INCIDENTAL TO THE MINING ACTIVITY. IT WAS SUBMITTED THAT IN THE PETITION WITH RERC FOR DETERMINATION OF TRANSFER PRICE OF LI GNITE TO M/S RWPL, THE COMPONENT OF MINE CLOSURE CHARGES HAS BEEN INCL UDED AND HENCE ANY DISALLOWANCE WOULD RESULT IN DOUBLE TAXATION. I T WAS FURTHER SUBMITTED THAT PROVISIONS FOR MINE CLOSURE EXPENSES AND DEPOSITED FOR THE AMOUNT IN THE ESCROW ACCOUNT AS AN ENFORCEM ENT MEASURE FOR FINANCIAL ASSURANCE ARE TWO DIFFERENT EVENTS. RELIA NCE WAS PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF UDAIPUR MINE DEVELOPERS SYNDICATE PVT. LTD. VS. DCIT. IN TH E ALTERNATE, IN GROUND NO. 3, IT WAS STATED THAT SINCE MINE CLOSURE CHARGES ATTRIBUTABLE TO CLOSING STOCK OF LIGNITE, TO THE EX TENT OF RS. 72,12,891/- HAVE BEEN INCLUDED IN THE VALUE OF CLOS ING STOCK, THE SAME SHOULD BE REDUCED FROM THE MINE CLOSURE CHARGE S DISALLOWED. IDENTICAL ISSUE AROSE IN CASE OF M/S RAJASTHAN STA TE MINES & MINERAL LTD. VS. ACIT, CIRCLE-6, JAIPUR IN ITA NO. 144/JP/2 014 AND 124/JP/2014 DATED 12.02.2016 AND THE RELEVANT PORTION OF THE OR DER IS AS FOLLOWS: 30.3 WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IN OUR VIEW, ONCE ASSESSEE WHETHER PRIVATE OR GOVERNMENT TAKE ON LEASE A MINE, ITS CLOSURES IS IN EVITABLE. A MINE CANNOT BE PERMITTED TO BE EXPLOITED INFINITELY AND INDEFINITELY. IN OUR VIEW, ONE THE MINE IS EXPLOITE D, ITS CLOSURE AND REHABILITATION IS NECESSARY. IN OUR VIEW, THE M INISTRY OF COAL, GOVERNMENT OF INDIA HAD PROVIDED STRUCTURED PROGRAM MED/ GUIDELINES FOR CLOSURE OF MINES. IN OUR OPINION, TH E VIEW EXPRESSED BY THE AO AND LD. CIT(A) IS CONTRARY TO L AW AND WE DISAGREE WITH THE VIEW OF THE AUTHORITIES BELOW THA T THE LIABILITY IS A CONTINGENT LIABILITY AND IS NOT ASCERTAINABLE LIABILITY. THE GUIDELINES LAID DOWN BY THE COAL MINISTRY, HAS ELAB ORATELY GIVEN THE CHARGE TO QUANTIFY THE LIABILITY AND THE MANNER IN WHICH THE AMOUNT IS REQUIRED TO BE SPENT FOR CLOSURE OF THE M INES AND FOR ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 13 RESTORING THE ECOLOGICAL BALANCE AND ENVIRONMENT PR OTECTION. THEREFORE, TO SAY THAT THE LIABILITY IS MERELY A CO NTINGENT AND HAS TO BE ARISES, IN OUR VIEW IS PREPOSTEROUS AND WITHO UT ANY MERIT. THE PROVISIONS ARE REQUIRED TO BE MADE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. SINCE THE AMOUNT IS ASCERTAINABLE AND DISCERNABLE TO BE SPENT ON THE CLOSURE OF THE MINES , IN VIEW OF THE FORMULA GIVEN BY THE MINISTRY OF COAL, THEREFOR E, IN OUR VIEW THE LIABILITY IS NOT A CONTINGENT LIABILITY AND IS REQUIRED TO BE MADE PROVISION IN PRESENT AND IS REQUIRED TO BE SPE NT IN A FUTURE DATE. THE JUDGMENT REFERRED BY THE LD. A/R FOR THE ASSESSEE IN THE MATTER OF KEDARNATH JUTE MFG CO. LTD. (SUPRA) A ND ALSO IN THE MATTER OF ROTORK CONTROLS INDIA PVT. LTD. (SUPR A) ARE SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE. 30.4 WHEN THE ABOVE PRINCIPLES ARE APPLIED TO THE FACTS OF THE PRESENT CASE IT CAN BE PROGRESSIVE OR CONTINGENT MINE CLOSU RE PLAN AND FINAL MINE CLOSURE PLANT. THE ASSESSEE HAS OPERATIN G LIGNITE MINES AT HIRAL, NAGOR AND SONARI. AS A RESULT OF TH E MINE CLOSURE PLANS ISSUED BY THE GOVERNMENT OF INDIA THE ASSESSE E HAS AN PRESENT OBLIGATION TO PROVIDE FOR THE EXPENDITURE W HICH IT HAVE TO FUND ON CLOSURE OF THE MINES AND THUS IT HAS A P RESENT OBLIGATION AS A RESULT OF THE PAST EVENTS, IT IS CE RTAIN THAT AN OUTFLOW OF RESOURCES WOULD BE REQUIRED TO SETTLE TH E OBLIGATION AND A RELIABLE ESTIMATE CAN BE MADE OF THE AMOUNT O F THE OBLIGATION WHICH IS MENTIONED DIN THESE GUIDELINES. THEREFORE, ACCORDING TO THE MATCHING CONCEPT ALSO WHEN THE REV ENUE FROM THE MINING ACTIVITY OF THESE MINES HAS BEEN RECOGNI ZED IN INCOME, THE CO TO BE INCURRED TO EARN SUCH REVENUE HAS TO BE PROVIDED FOR. IN THESE CIRCUMSTANCES AND THE LEGAL POSITION, EVEN IF EXPENDITURE IS NOT ACTUALLY INCURRED IN THE YEAR UNDER CONSIDERATION BUT THERE IS AN OBLIGATION ON THE ASS ESSEE TO INCUR THE EXPENDITURE OF WHICH A RELIABLE ESTIMATE CAN BE MADE HAS TO BE ALLOWED A DEDUCTION. IN THE ASSESSEES CASE ALSO IT IS CERTAIN THAT ASSESSEE HAS TO INCUR THE EXPENDITURE ON CLOSU RE OF MINE AND FOR WHICH A RELIABLE ESTIMATE HAS BEEN MADE AND THEREFORE THE PROVISION MADE FOR MINE CLOSURE EXPENSES IS ALL OWABLE U/S 37(1) OF THE ACT. 30.5 FURTHER, THE JUDGMENT IN THE MATTER OF BHARA T EARTH MOVERS LTD. V. CIT, 112 TAXMAN 61 (SC) AND CALCUTTA COMPANY LTD ., 37 ITR ARE APPLICABLE. BESIDES, IN THE SAID JUDGMENT IT WA S CATEGORICALLY ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 14 HELD THAT THE MINES CLOSURE LIABILITY IS A ASCERTAI NED LIABILITY NOTWITHSTANDING PRINCIPLE AS WELL AS THE MERCANTILE SYSTEM OF ACCOUNTING, THE LIABILITY IS APPLICABLE IN PRINCIPL E UNDER SECTION 37 OF THE ACT. IN VIEW OF THE ABOVE, THE GROUND OF THE ASSESSEE IS ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO GI VE THE BENEFIT OF DEDUCTION OF RS. 2,94,04,000/- TOWARDS MINES CLO SURES EXPENSES IN THE A.Y. 2010-11. IN VIEW OF THE DISCUSSION AS ABOVE, AND THE FINDI NG OF THE JURISDICTIONAL ITAT, ON THIS ISSUE, THE ADDITION MA DE UNDER THIS HEAD IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 15.4 LD. CIT(A) HAS FOLLOWED THE DECISION OF THE C O-ORDINATE BENCH RENDERED IN THE CASE OF M/S RAJASTHAN MINES AND MINERAL LTD. VS. ACIT IN ITA NO. 144/JP/2014 & 214/JP/2014 DT. 12.02.2016. 15.5 THE REVENUE HAS NOT PLACED ANY CONTRARY BIND ING PRECEDENTS. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN TO THE FINDING OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 21. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE TRI BUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY REASON TO INTERFERE IN T HE ORDER OF THE LD. CIT(A) DELETING THE DISALLOWANCE IN RESPECT OF MINES CLOSURE PLAN. WE DIRECT ACCORDINGLY. 22. AS THE FACTS AND ISSUES OF THE ASSESSEE FOR THE A.Y. 2014-15 ARE IDENTICAL TO THE FACTS AND ISSUES FOR THE A.Y. 2013 -14 AS DISCUSSED ABOVE. THEREFORE, THE FINDINGS OF THE BENCH IN THE CASE FOR A.Y. 2013-14 SHALL ALSO APPLY MUTATIS MUTANDIS IN THE CASE FOR THE A.Y . 2014-15. ITA 798,799, 774 & 775/JP/2018_ M/S BARMER LIGNITE MINING CO. LTD. VS ACIT 15 23. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN PART WHEREAS THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14 TH FEBRUARY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S BARMER LIGNITE MINING COMPANY LIMITED, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT/DCIT, CIRCLE-6, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 798,799, 774 & 775/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR