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2021 (7) TMI 901 - AT - Income TaxAddition on account of rehabilitation expenses being capital in nature - HELD THAT:- There is no infirmity in the order of the CIT(A) in deleting the addition made by the AO on account of rehabilitation expenses as the decision of CIT(A) is in consonance with the decision of ITAT in own case for AYs 2002-03 to 2004-05. Therefore, we uphold the order of CIT(A) and dismiss the grounds raised by the revenue on this count. Addition on account of penalty suspense account - HELD THAT:- As assessee withholds some amount as per the agreement for different defaults committed by the contractor which accounted for under the head penalty suspense and once the contractor makes good for the defaults, the amount withheld is returned back to the contractor. Therefore, we are of the view that treating the recovery amount, which is made as per the agreement, for which the contractors are agreed and refunded to the concerned contractor on completion of the targeted work satisfactorily, but, the assessee failed to prove the same by way of documentary evidence when it was refunded, whereas, assessee stated that it has been refunded. Considering the facts and circumstances of the case, we restore the issue back to the file of AO with a direction redecide the issue on submission of the evidence before him by the assessee. The assessee is directed to substantiate its claim by way of producing documentary evidence before the AO. Accordingly, the grounds raised by the assessee on this issue are treated as allowed for statistical purposes. Addition on account of prospecting and leasing expenses - AO observed that the assessee had debited an amount to Profit & loss account being 100% of prospecting and mining lease expenses under the head ‘operational expenses - Since the said expenditure is covered under provisions of section 35E of the Act, the AO asked the assessee to show cause as to why the said expenditure should not be allowed only to the extent of 1/10th - Rejecting the submissions of the assessee, treating the above expenditure as capital in nature, the AO disallowed an amount - HELD THAT:- When the assessee preferred an appeal before the CIT(A), as contended by the assessee in the ground, the CIT(A) did not adjudicate this ground of appeal. Therefore, we remit this issue back to the file of CIT(A) with a direction to adjudicate the issue on merits after providing reasonable opportunity of hearing to the assessee. Thus, ground No. 2 is allowed for statistical purposes. Addition towards corporate social responsibility expenditure - HELD THAT:- CIT(A) before remitting the issue to the file of AO observed that the expenditure debited by the assessee under the head corporate social responsibility is in principle allowable. However, he observed that the AO did not examine the nature and correctness of the expenditure debited. Therefore, we also remit this issue to the file of the AO with a direction to examine the nature and correctness of the expenditure debited and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee. Accordingly, this ground is treated as allowed for statistical purposes.
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