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2017 (12) TMI 1784 - AT - Income TaxNature of expenditure - acquiring mining rights - capital or revenue expenditure - assessee made lump sum payment for the purpose of acquiring mining rights from the Government of Karnataka - HELD THAT:- In the light of the judgment of Aditya Minerals Pvt. Ltd. [1999 (9) TMI 2 - SUPREME COURT] the impugned payment made for acquiring mining rights is capital expenditure and cannot be allowed as revenue expenditure. The reliance placed by the ld.CIT(A) on the coordinate bench decision of Tribunal in the case of P.Abubakar [2010 (1) TMI 1235 - ITAT BANGALORE] and the decision of the Hon’ble jurisdictional High Court in the case M/s.Ramgad Minerals & Minings Pvt. Ltd.,[2012 (1) TMI 313 - KARNATAKA HIGH COURT] is misplaced in the light of the decision of the larger bench decision of the Hon’ble Supreme Court in the case of Aditya Minerals Pvt. Ltd [1998 (2) TMI 8 - SUPREME COURT] Then an issue may arise as to whether this expenditure can be allowed on a staggering basis spread over lease period as revenue expenditure in the light of the decision of the Hon’ble Supreme Court in the case of Madras Industrial Corporation [1997 (4) TMI 5 - SUPREME COURT] Needless to mention that if the payment is capital in nature, expenditure cannot be allowed on staggered basis. Even for the purpose of spreading over period of lease, it is essential that the expenditure should be in the nature of revenue expenditure. Thus, grounds of appeal of the revenue are allowed. Premium paid for Keyman Insurance disallowed - HELD THAT: - It is held to be allowable by the decision of the Hon’ble Delhi High Court in the case of B.N.Exports[2010 (3) TMI 186 - BOMBAY HIGH COURT]and also by the CBDT circular No.726 dated 18/2/1998, but the same is allowable only in the year in which premium was paid. In the present case, admittedly, premium was paid in the earlier years and the question of allowing it as deduction in the subsequent year does not arise as the liability of the expenditure had not crystallized during the year under consideration. Therefore, grounds of cross objections of the assessee are dismissed.
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