ORIENT RESOURCES,CHENNAI V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, RANCHI, RANCHI

ITA 66/RAN/2022

AI Insights

The case involves Orient Resources No.2, which appealed against the order of the CIT(A) Patna-3, which had disallowed the claim of expenses and depreciation for the assessment year 2016-17 due to the suspension of their mining license. The assessee argued that despite the suspension, they had kept their machinery ready and were actively pursuing legal remedies to restore their license, thus their business activities had not ceased. The revenue contended that the business had stopped due to the license suspension, making the expenses and depreciation claims invalid. The Tribunal sided with the assessee, emphasizing that the mere suspension of the license, coupled with ongoing litigation, did not stop the business.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633200 (ITAT-RANCHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RINKU SINGH
• Assessee Lawyers: PER BENCH; K.M.MOHANDASS; THARISH V
• Keywords: Depreciation

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER Orient Resources No.2, North Crescent Road, T. Nagar, Chennai-600017 PAN/GIR No.AAAFO 5958 P (Appellant Assessee by Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A) Patna-3 dated 30.6.2022 assessment year 2016 2. Smt. Rinku Singh, Ld CIT DR appeared for the revenue and Shri Mohan Dass, ld AR appeared for the assessee. IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE S/SHRI GEORGE MATHAN, JUDICIAL MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No.66/RAN/2022 Assessment Year: 2016-17 Orient Resources No.2, North Crescent Road, T. Nagar, 600017 Vs. The Asst. Commissioner of Income Tax, Central Circle Ranchi AAAFO 5958 P (Appellant) .. ( Respondent Assessee by : Shri K.M. Mohan Dass, FCA/Shri Tharish V, FCA Revenue by :Smt. Rinku Singh, CIT DR Date of Hearing : 12/06/202 Date of Pronouncement :12/06/202 O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A) 30.6.2022 in Appeal No.CIT(A),Patna-3/10243/2018 2016-17. Smt. Rinku Singh, Ld CIT DR appeared for the revenue and Shri ld AR appeared for the assessee. P a g e 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, SHRI GEORGE MATHAN, JUDICIAL MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER The Asst. Commissioner of Income Tax, Central Circle-1, Respondent) ass, FCA/Shri Tharish V, FCA CIT DR /2025 /2025 This is an appeal filed by the assessee against the order of the ld CIT(A)- 3/10243/2018-19 for the Smt. Rinku Singh, Ld CIT DR appeared for the revenue and Shri K.M. ITA No./Ran/2024 Assessment Year : 2017-18 P a g e 2 | 4 3. It was submitted by ld AR that the assessee is in the business of extracting iron ore. It was the submission that the assessee has been in the business from AY 2007-08 onwards. It was the submission that during the assessment yea 2016-17, the mining license in respect of iron ore had been suspended by the Government. It was the submission that subsequently, the mining licenses have not been renewed till yet. It was the submission that the assessee is in litigation in regard to the suspension of the mining license owned by the assesse even till date. It was the submission that the assessee had been doing the mining during the AY 15-16. It was the submission that on account of suspension of mining license, the Assessing Officer had disallowed the assessee’s claim of expenses claimed under profit and loss account and also the depreciation claimed by holding that there was no business activity of the assessee. It was the submission that the assessee has kept its machinery and equipment ready for use and it was always in use till the licence was suspended. It was submitted that the expenses in relation to assessee’s business and the depreciation is liable to be allowed. 4. In reply, ld CIT DR submitted that the business of the assessee has stopped on account of suspension of mining licence. It was the submission that the business of the assesseehaving been stopped on account of suspension of mining license, the expenses and depreciation is not allowable to the assessee. ITA No./Ran/2024 Assessment Year : 2017-18 P a g e 3 | 4 5. We have considered the rival submissions. It is an undisputed fact that the assessee is under litigation even now for restoration of his business activity of being mining of iron ore. It is also undisputed fact that the litigation is in regard to suspended mining license. Till A.Y. 2015-16, the assessee had been doing mining of iron ore. From A.Y. 2016-17 in the state of Jharkhand, the mining of iron ore has been stopped insofar as the mining license is under suspension and the issues are under litation before the Hon’ble Jurisdictional High Cour and Hon’ble Supreme Court. Just because the mining license of the assessee has been suspended, it cannot be said that the business of the assessee has come to a stop. Should the license be restored, then obviously, the assessee should have started the business. For such purposes, he has kept the machinery are installed ready to use. This being so, as it is noticed that the assessee has not stopped his business but his business has not been suspended on account of mining licence having been suspended, it cannot be said that the expenses incurred by the assessee or depreciation can be denied to the assessee. This being so, the AO is directed to grant the assessee the expenses as claimed and depreciation claimed by the assessee 6. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 12/06/2025. Sd/ Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi; Dated 12/06/2025 ITA No./Ran/2024 Assessment Year : 2017-18 P a g e 4 | 4 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Ranchi 1. The Appellant : Orient Resources No.2, North Crescent Road, T. Nagar, Chennai-600017 2. The Respondent: The Asst. Commissioner of Income Tax, Central Circle-1, Ranchi 3. The CIT(A)-Patgna-3 4. Pr.CIT, Ranchi 5. DR, ITAT, 6. Guard file. //True Copy// "