2019 (10) TMI 1613 - HC - Income Tax

Characterization of receipts - interest receipt - capital receipts OR income from other sources - ITAT justification in reversing the order of CIT (A) holding the interest income on FDRs to be income from other sources - disallowance made on account of mandatory CSR expenses - HELD THAT - Aforementioned question no. 1 2 and 3 stand already decided by this Court in Barmer Lignite Mining Co. Ltd 2018 (7) TMI 2369 - RAJASTHAN HIGH COURT whereby the appeal filed by the assessee in the present was allowed. Mines Closure Plan as admissible expenditure - whether the said amount set apart by the assessee was in the nature of provision and thus not allowable as expenditure? - As aforementioned question as also been decided by this Court in M/s. Barmer Lignite Mining Corp. Ltd. 2018 (7) TMI 2369 - RAJASTHAN HIGH COURT whereby the appeal filed by the appellant-revenue was dismissed.

Summary

The Rajasthan High Court dismissed the revenue's appeal challenging the ITAT Jaipur Bench's judgment dated 14.02.2019. The substantial questions of law raised concerned (1) whether interest receipt of Rs. 6,53,00,000/- should be treated as capital receipt per the Supreme Court's decision in Bokaro Steel Ltd. (236 ITR 3152) rather than income from other sources as held in Toticorin Alkali Chemicals & Fertilizers Ltd. (227 ITR 172); (2) the ITAT's reversal of CIT(A)'s order treating interest on FDRs as income from other sources; (3) deletion of disallowance of CSR expenses of Rs. 1,88,00,000/- made pursuant to MOEF environmental clearance; and (4) allowance of Rs. 4,43,00,000/- for Mines Closure Plan expenditure despite it being a provision.The Court noted that questions (1), (2), and (3) were already conclusively decided in Barmer Lignite Mining Co. Ltd. v. DCIT (D.B. ITA No. 54/2018) in favor of the assessee, and question (4) was settled in Principal Commissioner of Income Tax v. Barmer Lignite Mining Corp. Ltd. (D.B. ITA No. 84/2018) dismissing the revenue's appeal. Accordingly, the present appeal was dismissed following these precedents.