Income Tax Appellate Tribunal - Kolkata
Integrated Coal Mining Ltd., Kolkata vs Department Of Income Tax on 12 January, 2010
आयकर अपीलीय अधीकरण, Ûयायपीठ - " A" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA
(सम¢)Before ौी जी.
जी. डȣ.
डȣ. अमवाल,
अमवाल, उपाÚय¢ एवं/and ौी महावीर िसंह, Ûयायीक सदःय)
[Before Hon'ble Shri G. D. Agrawal, V.P. & Hon'ble Shri Mahavir Singh, JM]
आयकर अपील संÉया / I.T.A No. 788/Kol/2010
िनधॉरण वषॅ/Assessment Year: 2003-04
Deputy Commissioner of Income-tax, Vs Integrated Coal Mining Ltd.
Circle-6, Kolkata (PAN-AAACI 5584 L)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
&
C.O. No.60/Kol/2010
In आयकर अपील संÉया / I.T.A No. 788/Kol/2010
िनधॉरण वषॅ/Assessment Year: 2003-04
Integrated Coal Mining Ltd. Vs. Deputy Commissioner 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 Subhasis De
आदे श/ORDER
Per Mahavir Singh, JM/( महावीर िसंह, Ûयायीक सदःय)
सदःय The appeal by revenue and Cross Objection by assessee 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 for Assessment Years 2003-04 u/s. 143(3) Income Tax Act, 1961(hereinafter referred to as "the 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 filed by the revenue is delayed by 8 days and the cause stated in petition for condonation of delay seems reasonable in view of the reasons given therein and as conceded by the Ld. Counsel for the assessee. Accordingly, we condone the delay and admit the appeal.
3. The interconnected and common issues in this appeal of the revenue and Cross Objection of the assessee is against the order of CIT(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 this, 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 Geographical Report, without considering that this is an expenses covered well within the provisions of Sec. 35E.
2) That Ld. CIT(A) has erred in law as well as on facts, in allowing depreciation claim of the assessee without considering that as per the second proviso to Sec. 32(1)(iia) depreciation is to be allowed in respect of any plant & 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 office premises."
For this, assessee raised the following ground nos. 1 and 2:
"1. That the Ld. CIT(A) erred in not appreciating that the Geographical Report is a 'plant' of the assessee's business.
2. That, the Ld. CIT(A) further erred in not appreciating that the Geographical Report, being 'plant' of the assessee's business is entitled 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 and it commences mining operation w.e.f. 18th 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 debited 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 of the Act disallowed depreciation and additional depreciation by holding as under:
"Keeping in view of the above, the expenditure on purchase of "Geographical Report"
is considered u/s. 35E of the Act and allowed as per 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 depreciation claim of 15% as per section 32(1)(iia) of the Act. As above the depreciation claim on the "Geographical report" is not accepted, without prejudice even though 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 allowed in respect of any machinery or plant installed in any office premises. The 'Geographical 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 considered 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 additional depreciation by holding as under:
"I have gone through the submissions of the appellant and also the order of A.O. The A.O. has treated the expenditure incurred on purchasing 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 not acquired the right over the Mining area. The acquisition of report is only a condonation 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 acquired 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 purchase 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 acquisition of 'Mining rights'. The appellant has separately claimed depreciation on 'Mining rights' and 'Mining lease charges' as 'intangible assets'.
What is plant? Plant in its ordinary sense, includes whatever apparatus is used by a business man for carrying on his business not his stock in trade which he buys or makes for sale, but all goods and chattels fixed or movable, which he keeps for employment in his business with some degree of durability. The finance 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 Hon'ble 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 geographical 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 details of the coal seams. As seen from the contents of the geographical report, it contains general description of the mine area and the know-how of the mine. There are technical details 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 cannot be accepted. The geographical report gives only general idea of the mine and is not the basis of fundamental to the assessee's business.
The perusal of the 'geographical report' contents constitute the know-how of the deposits and general conditions. As stated by the assessee in 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 gives the idea of the nature of deposit and whether mining activity can be carried on in that location. 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 depreciation 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 intangible asset and not as a plant. The appellant is not entitled to claim additional depreciation u/s 32(1)(iia) of the I. T. Act. I agree with the A.O. on this issue. The AO is directed 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 in 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 assessee 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 purchased by the assessee forms 'plant' for which the assessee has claimed depreciation at 25% and additional depreciation at 15% under clause (a) of 1st proviso to section 32(1)(iia) of the Act. The assessee has filed copy of geological report for the exploration of coal in Sarshatali Block, Raniganj 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 reserve in a particular coal block. This particular GR contains location and area, extend, accessability, physiography, drainage, climate, geological mapping, scope and limitation, geological structure, coal seams, description and quality of coal seams including reserves. We find from this GR that in location map, including geological map, the entire structure of plates is given 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 coalfield is bounded by latitudes N23 30' & N23 52' and the longitudes E86 25' & E87 37'. The report also contains the sedimentary sequence of area excluding the quantinary laterite and recent/sub-recent alluvium and soil, which belongs to Gondwana sub-group. Further it gives information about the general stratigraphic sequence in age, formation and lithology along with regional structure 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 formation and describe the individual seams also. This report co-relates seams/sections. Even this report 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 technical 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 the mine. The report also mentions the mineable potentiality of the block and technical description 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 contain 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 acquisition 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 from profits and gains of business or profession.
43. In sections 28 to 41 and in this section, unless the context otherwise requires-
(1).........................................
(2)........................................
(3) 'Plant' includes ships, vehicles, books, scientific 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 only inclusive definition and further excludes tea bushes or livestock. Finance Act 2003 has amended clause 3 of section 43 to provide for exclusion of the assets namely buildings and furniture and fittings from the definition of the expression 'plant'. In such a situation, after going 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 mines 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 that 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 report also gives idea of coal deposits and for that how mining activity is to be carried out in that location. The Hon'ble Apex Court in the case of Scientific Engineering House P. Ltd. Vs. CIT (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 rendition of documentation service was really the main service to be rendered by the foreign collaborator; (ii) that the various documents such as drawings, designs, charts, plans, processing data and 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 manufacturing 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, processing data and other literature, etc. comprised in "documentation service" and was of a capital nature as a result whereof a capital asset of technical know-how in the shape of drawings, designs, charts, plans, processing data and other literature was acquired by the appellant. (iii) That "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: Did the article fulfill the function of a plant in the assessee's trading activity? Was it a tool of his 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 comprised in the "documentation service" as specified in clause 3 constituted a "book" and fell within the 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 undertake its trading activity of manufacturing the odolites and microscopes and these documents had a vital function to perform in the manufacture of these instruments; in fact, it was with the aid of these complete and up-to date set of documents that the appellant was able to commence its manufacturing activity and these documents really formed the basis of the business of 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. The capital asset acquired by the appellant, viz., the technical know-how in the shape of drawings, 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 described in section 32(1)(ii) of the Act. What is knowhow, is defined w.e.f. 1.4.1999 by newly inserted explanation 4 to section 32(1) by the Finance (No.2) Act 1998 coins a definition of the expression 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 other sources of mineral deposits (including searching for discovery or testing of deposits 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 assessee.
With the change in the Act by amending the definition of plant in section 43(3) of the Act by the Finance Act, 2003, which is only inclusive definition 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 Hon'ble Supreme Court and Hon'ble High Courts can be summarized as under:-
(i) The functional test is a decisive test. (ii) An item which falls within the category of 'building' cannot be considered to be 'plant'.
Buildings with particular specification for atmospheric control like moisture temperature are not 'plant'.
(iii) In order to find out as to whether a particular item is a plant or not, the meaning which is available in the4 popular sense, i.e. the people conversant with the subject-matter would attribute to it, has to be taken.
(iv) The term 'plant' would include any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business and it is not necessarily confined to any apparatus which is used for mechanical operations or 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 cannot 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 examined.
From the above, if we consider this report as a plant, even then assessee is not eligible for additional depreciation in view of the second proviso 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 assesses feasibility of mine to evaluate economics and contains plan according to which mining activity is to be carried on. Apart from this, this report gives idea of nature of coal deposits and whether mining activity can be carried out in that coal field according to the plans or not. Hence, 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 clause (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 installation by the assessee, was used either within or outside India by any other person; or
(b) Any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house; or
(c) Any office appliances or road transport vehicles; or
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 cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head 'Profits and gains of business or profession' of any one previous year:
In view of the clear bar in the provision for not allowing additional depreciation on machinery or plant installed in the office premises, we dismiss 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 Assessing 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 has only limited right to such property along with other entities, hence such expenditure is revenue in nature as per Sec. 17(1).
9. The brief facts leading to this issue are that the assessee's 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. Accordingly, 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 road 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 appellant and also the order of the A.O. The A.O. in his order observed that the link road constructed 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 road belonging to the government. The submissions of the appellant show the business interest 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 appellant is mentioned in the objectives. If it is only public Road appellant could not have contributed money without benefit for company. There can be no doubt that the construction / 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 Hon'ble 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 appeal 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 through 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 to Zilla Parishad and for their use. According to the revenue, it is a coincidence that the assessee will use this road for transportation as any other road belonging to the government. We find that assessee had, no doubt, incurred expenditure on up-gradation/construction of link road 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 Hon'ble Apex Court in the case of L. H. Sugar Factory & Oils Mills (P) Ltd. Vs. CIT (1980) 125 ITR 293 (SC), wherein the Apex Court at pages 297 and 299 has held as under:
"The amount of Rs. 50,000 was contributed by the assessee under the Sugarcane Development Scheme towards meeting the cost of construction of roads in the area around the factory. Now, there can be no doubt that the construction of roads in the area around the factory was considerably advantageous to the business of the assessee, because it facilitated the running of its motor vehicles 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 purpose of construction of roads in the State of Uttar Pradesh, but it was for the construction of roads in the area around the factory that the contribution was made and it cannot be disputed that if the roads are constructed around the factory area, they would facilitate 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 connected with the business activity of the assessee and it is difficult to resist the conclusion that the amount of Rs. 50,000 contributed by the assessee towards meeting the cost of construction of the roads under the Sugarcane Development Scheme was laid out wholly and exclusively for the purpose of the business of the assessee."
"These roads were undoubtedly advantageous to the business of the assessee as they facilitated the transport of sugarcane to the factory and the outflow of manufactured sugar from the factory to the market centres. There can be no doubt that the construction of these roads facilitated the business 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 that the advantage secured for the business of the assessee was of a long duration inasmuch as it would last so long as the roads continued to be in motorable condition, but it was not an advantage in the capital field, because no tangible or intangible asset was acquired by the assessee nor was there any addition to or expansion of the profit-making apparatus of the assessee. The amount of Rs. 50,000 was contributed by the assessee for the purpose of facilitating the conduct of the business of the assessee and making it more efficient and profitable and it was clearly an expenditure on revenue account."
11. We find that this issue is covered by the decision of Hon'ble Apex Court in the case of L. H. Sugar Factory & Oils Mills (P) Ltd. (Supra), wherein Hon'ble Apex Court noted that the assessee a sugar manufacturer contributed to the State of Uttar Pradesh a sum of Rs.50,000/- for construction of a road around its factory for facilitating 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 the 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 expenditure 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 getting an advantage of an enduring benefit to itself. We find that in the present case also, there 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/construction of a link road from its mines at Sarasthali to the Barabani railway station in order to facilitate transportation of coal mined so that the business of the assessee could be conducted more efficiently 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 relevant previous year by the assessee towards contribution for up-gradation/construction of the link 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 business of the Company. We, accordingly, uphold the order of CIT(A) allowing the claim of deduction of the sum of Rs.3.57 cr. as revenue expenditure. This issue of the revenue's appeal is dismissed.
12. In the result, appeal of revenue and C.O. of assessee, both are dismissed.
Order pronounced in open court on 30.6.2011
Sd/- Sd/-
जी.
जी. डȣ.
डȣ. अमवाल,
अमवाल, उपाÚय¢ वीर िसंह, Ûयायीक सदःय
महावी
महावीर
(G. D. Agrawal) (Mahavir Singh)
Vice President Judicial Member
तारȣख)
तारȣख) Dated 30th June, 2011
(तारȣख Pronounced by
Sd/-(S.V.Mehrotra) Sd/- (M. Singh)
AM 30.6.11 JM 30.6.11
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
11 ITA 788/K/2010 Integrated Coal Mining Ltd.&
CO 60/K/2010 A.Y.03-04
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - DCIT, Circle-6, Kolkata
2 ू×यथȸ/ Respondent, M/s. Integrated Coal Mining Ltd., 6, Church Lane,
Kolkata-700 001.
3. आयकर किमशनर (अपील)/ The CIT(A), Kolkata
4. आयकर किमशनर/CIT, Kolkata
5. वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata
स×याǒपत ूित/True Copy, आदे शानुसार/ By order,
सहायक पंजीकार/Asstt. Registrar.