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2018 (10) TMI 1120 - AT - Income TaxAllowable busniss expenditure u/s 37(1)- payment for resuming the mining activity by Categories ‘A’ & ‘B’ companies - Held that:- The fact that the compensation is proportionate to area of illegal mining outside the leased area and that the assessee has paid the proportionate compensation for mining in the areas outside the sanctioned area allotted to it and that 10% of sum is to be transferred to SPV and the balance 10% is to be reimbursed to the respective lessees, according to us, proves that it is a payment made as ‘compensation’ for extra mining, without which the assessee could not have resumed its activities. Therefore, we are inclined to accept the contention of the assessee that it is compensatory in nature and is a ‘business expenditure’ and is allowable u/s 37(1) of the Act. Disallowance of expenditure incurred towards Corporate Social Responsibility (CSR) - Held that:- Having regard to the rival contentions and the material on record, we find that the direction of the ITAT in the earlier Assessment Years holds good for the relevant assessment years under consideration. Therefore, respectfully following the decision of the coordinate Bench on similar set of facts, we direct the A.O. to recalculate the expenses allowable under CSR after disallowing the sum of capital expenses. Accordingly, Ground No.4 is treated as allowed for statistical purposes.
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