Tamilnadu Minerals Limited, CHENNAI V. ACIT, CHENNAI

ITA 979/CHNY/2013

• Counselvise Citation: 97921714 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 11-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-05-2013
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Keywords: Capital asset; Revenue expenditure; Capital expenditure
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.979/MDS/2013 / ASSESSMENT YEAR : 2005-06 M/S TAMILNADU MINERALS LTD TWAD HOUSE NO.31, KAMARAJAR SALAI CHEPAUK, CHENNAI 600 005 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE III(1) CHENNAI [PAN AABCT 2250 P] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI PHILIP GEORGE, ADVOCATE /RESPONDENT BY : SHRI N. MADHAVAN, JCIT / DATE OF HEARING : 11 - 05 - 2015 ! / DATE OF PRONOUNCEMENT : 30 - 0 6 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, CHEN NAI DATED 22.1.2013 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. THE FIRST GROUND OF APPEAL IS WITH REGARD TO COMPEN SATION PAID BY THE ASSESSEE FOR ACQUISITION OF LAND. ITA NO.979/13 :- 2 -: 3. SHRI PHILIP GEORGE, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT PURSUANT TO THE AWARD PASSED BY SUB-COURT ENHA NCING THE COMPENSATION, THE ASSESSEE PAID ` 32,905/- FOR ACQUIRING THE LAND. THE ASSESSEE CLAIMED THE ADDITIONAL COMPENSATION T O THE EXTENT OF ` 32,905/- AS REVENUE EXPENDITURE. HOWEVER, THE AUTH ORITIES BELOW TREATED THE SAME AS CAPITAL EXPENDITURE. ACCORDING TO THE LD. COUNSEL, AS THIS AMOUNT WAS PAID ON THE DIRECTION OF THE SUB -COURT, THE SAME HAS TO BE TREATED AS REVENUE EXPENDITURE. 4. WE HEARD SHRI N. MADHAVAN, LD. DEPARTMENTAL REPRESENTATIVE ALSO. 5. ADMITTEDLY, THE COMPENSATION WAS PAID CONSEQUENT TO THE AWARD PASSED BY THE SUB-COURT IN THE LAND ACQUISITI ON CASE FOR ACQUISITION OF A CAPITAL ASSET. THEREFORE, THE PAY MENT, IF ANY, PAID BY THE ASSESSEE AS COMPENSATION OR ADDITIONAL COMPENS ATION, HAS TO BE TREATED AS CAPITAL EXPENDITURE. THEREFORE, THIS TR IBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACC ORDINGLY, THE SAME IS CONFIRMED. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REG ARD TO DISALLOWANCE OF NOMINATION CHARGES U/S 43B OF THE ACT. ITA NO.979/13 :- 3 -: 7. SHRI PHILIP GEORGE, LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ASSESSEE HAS PAID NOMINATION CHARGES FOR EXPLOITING THE MINES BELONGING TO TAMILNADU GOVERNMENT. AN IDENTI CAL ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 IN I.T.A.NO.1541/MDS/2007. THIS TRIBU NAL BY AN ORDER DATED 30.6.2008 FOUND THAT WHAT WAS PAID BY THE AS SESSEE WOULD FALL WITHIN THE AMBIT OF TAX, DUTY, CESS OR FEE, THEREFO RE, IT CANNOT BE TREATED AS ROYALTY. THE LD. COUNSEL VERY FAIRLY C ONCEDED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF TH IS TRIBUNAL. 8. WE HEARD SHRI N. MADHAVAN, THE LD. DR ALSO. 9. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS PAID CH ARGES TO GOVERNMENT OF TAMILNADU FOR EXPLOITATION OF MINES. THE ASSESSEE CLAIMED THE SAME AS ROYALTY. HOWEVER, THIS TRIBUNA L IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 FOUND THAT IT CANNOT BE CONSTRUED AS PAYMENT OF ROYALTY AND IT HAS TO BE CO NSIDERED AS PAYMENT OF TAX, FEES, CESS ETC. IN VIEW OF THE ORDE R OF THIS TRIBUNAL FOR ASSESSMENT YEAR 2004-05, THE CIT(A) HAS RIGHTLY REJ ECTED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL DO NOT FIND ANY INFIR MITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONF IRMED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ITA NO.979/13 :- 4 -: ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OF JUNE, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 30 TH JUNE, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF