Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 44 - AT - Income TaxAllowability of Mines Restoration Expenses - Held that:- Assessee statutorily has to restore the mine to the original shape and therefore, the Mining Restoration Expenses are ascertained liability. The quantification of which is to be examined and Ld. Counsel fairly admitted that the provision was not made according to the requirement under the Act. AO is therefore directed to examine the quantification, in the light of the additional information filed before us and particularly the workings provided in 148, 149 and 150 of the paper book. While holding that the liability is an ascertained liability and not a contingent liability, the quantification of provision to be allowed is restored to the file of AO. AO should give an opportunity to assessee to explain the quantification of provision and the quantum so decided should be allowed, subject to not exceeding the actual provision made in the books of account by the time of assessment. Grounds in all the years are partly allowed for statistical purposes. Preliminary expenses written-of - ROC fees paid to increase its authorised capital - AO disallowed the same as capital expenditure, following the principles on the issue - as contended before the Ld.CIT(A) that this amount was paid for increasing the authorised share capital and this amount is eligible for deduction u/s. 35D - Held that:- Hon'ble Supreme Court in the case of CIT Vs. General Insurance Corporation [2006 (9) TMI 116 - SUPREME COURT] the amount is allowable as revenue expenditure, as there is no fresh infusion of share capital due to conversion of already existing preference shares. However, this aspect has not been examined by the AO or CIT(A). Since the facts are to be examined afresh, we are of the opinion that the claim of amount is to be examined afresh - It is also to be noted that the contention that no fresh capital was brought in was not raised before the authorities and as seen from the submissions before the Ld.CIT(A), assessee itself has restricted the claim to 1/5th of the amount u/s. 35D. Since the claim was made before us, we deem it proper to restore the issue for examination of facts and for allowing the amount as per the provisions of law. Allowability of Corporate Social Responsibility (CSR) - AO was of the view that the same was not incurred wholly and exclusively for the purpose of business of assessee - Held that:- As contented this amount is not related to CSR but pertains to consultancy charges and advertisement expenses wrongly classified under this head. Since this issue was not examined by the AO, we are of the opinion that AO can examine the nature of expenditure and allow the same, if they are eligible for deduction u/s. 37(1). To the extent of an amount of ₹ 28,74,363/- the claim is restored to the file of AO for fresh examination, after giving due opportunity to assessee. Ground is partly allowed for statistical purposes.
|