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2020 (12) TMI 715 - AT - Income TaxExpenditure in respect of Dead Rent paid in respect of mines which are not operational and no manufacturing activity is carried on - Nature of expenses - CIT(A) allowing the claim as revenue expenditure - HELD THAT:- CIT-A correctly allowed the claim of assessee by following the CBDT Circular No.1D(V.53) of 1966, wherein it was laid down that dead rent is allowed as deduction irrespective of the fact whether the mines are operational or not. Environment Protection Fees - allowable revenue expenses - assessee paid a sum to the Govt. of Karnataka towards Environmental Protection Fees levied on the mining leases - AO considered that the assessee would get the benefit of the fee paid for 10 years and allowed 1/10th of the expenditure claimed as deduction by the assessee - HELD THAT:- Environmental Protection Fees cannot be equated to consideration paid for acquiring mining rights and therefore the decision of ITAT Bangalore in the case of K R Kaviraj [2017 (12) TMI 1784 - ITAT BANGALORE] is not applicable to the facts of the present case. We are of the view that the sum paid was a compensation paid by the assessee for damage to the environment and it cannot be said that it gives an enduring benefit to the assessee. We therefore agree with the conclusion of the CIT(Appeals) that expenditure in question is a capital expenditure. Appeal by the revenue is dismissed.
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