TMI Blog2012 (5) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... ade towards mine closure obligation - revision u/s 263 - Held that:- It is observed that the basis of calculation for the relevant AY 2006-07 for ₹ 71.18 crores was submitted during the original assessment and accepted by the AO. The detailed calculation of ₹ 21.31 crores charged to P&L A/c (on the basis of ₹ 71.18 crores) was also enclosed and produced before the CIT. Hence, the CIT is wrong in his observation that the estimate of ₹ 21.31 crore is excessively on a higher side and absolutely no realistic or rational basis for such calculation. The CIT is not correct in invoking the provisions of Sec.263 as we find that the issue is debatable and when two views are possible the Assessing Officer has taken one view. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} table.MsoTableGrid {mso-style-name:"Table Grid"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-priority:59; mso-style-unhide:no; border:solid windowtext 1.0pt; mso-border-alt:solid windowtext .5pt; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-border-insideh:.5pt solid windowtext; mso-border-insidev: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- Miscellaneous / promotional expenses Rs.41,84,326/- Under incidental expenses during construction - Rs.37,05,672/- To this they have had prior period expenses of - Rs.19,41,856/. 5. According to the assessee net depreciation charged to the account is only ₹ 1130954674/-. According to the assessee the CIT had misunderstood the amount added back the amount wrongly. 6. The learned DR pointed out that in the course of hearing before the CIT the AR had advanced fresh contention that the difference of ₹ 59,45,326/- represents impairment of certain assets in accordance with the Accounting S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of lease renewal or in the case of continuance lease every 5 years and also providing bank guarantee which can be invoked if activities stated in mine closure plan are not carried out as per Rule 23(5) of the MCDR. The leaseholder cannot abandon a mine or part thereof unless the final mine closure plan is implemented to the satisfaction of the Indian Bureau of Mines (IBM). As such the liability to close mines accrues year after year when the mines are actually explored by excavating of ore. Therefore it is an accrued liability which is to be estimated and provided in the books of accounts. 9. The learned counsel for the assessee has relied upon the following cases:- i) The Supreme Court in the case of Bharath Earth Movers Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the authorities below. It is observed that the basis of calculation for the relevant AY 2006-07 for ₹ 71.18 crores was submitted during the original assessment and accepted by the AO. The detailed calculation of ₹ 21.31 crores charged to P L A/c (on the basis of ₹ 71.18 crores) was also enclosed and produced before the CIT. Hence, the CIT is wrong in his observation that the estimate of ₹ 21.31 crore is excessively on a higher side and absolutely no realistic or rational basis for such calculation. 12. The CIT is not correct in invoking the provisions of Sec.263 as we find that the issue is debatable and when two views are possible the Assessing Officer has taken one view. The Apex Court in the case of Malab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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