TMI Blog2017 (6) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned Ministries and the Company had no control to use the money. The Company is merely acting as a custodian of such money and is required to release the same as per the directions of the concerned Ministries. However, the assets generated from such money cannot be treated as assets of the assessee company. Pending utilisation of the funds, the money was kept in the bank account which has resulted into interest income. - Decided in favour of the assessee - I.T.A. No.872/Kol/2014 - - - Dated:- 7-6-2017 - Shri Aby. T. Varkey, Judicial Member And Shri M. Balaganesh, Accountant Member For the Appellant : Shri Akash Mansinka Vivek Ruia, AR For the Respondent : Shri Goulen Hangshing, AR. ORDER Per M. BALAGANESH, AM This appeal by assessee is arising out of order of CIT(A)-VI, Kolkata vide Appeal No.135/13-14/CIT(A)-VI/Cir-5/Kol dated 12.02.2014 against the order of the assessment framed by D.C.I.T., Cir-5, Kolkata under Section 147/143(3) of the Income Tax Act for Assessment Year 2008-09 vide his order dated 25.03.2013. 2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in confirming the addition made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious subsidence problems in Jharia Coalfield was caused due to existence of old workings with full height extraction and wide galleries, multi-seam and multi-section development under shallow depths, existence of developed seams under extracted lower seam with stowing etc. There are many towns, villages, rivers, jores, roads, railway line etc., in Jharia Coalfield which are standing over small pillars, stocks reported to be water logged. If, by any chance, this water drains away it may cause subsidence. In addition, fire is also active in some areas, causing danger to the surface structure. In many mines, size of pillars, which were left below the surface structures as a protective measure, is not known because of non-availability of off-set plans of abandoned workings. The committee recommended the following eight (8) main measures to control danger due to subsidence depending upon conditions prevailing in individual mines of BCCL. a. Vacating and / or dismantling the surface structures over the goaved out or unstable workings - 30 collieries. b. Stabilisation of underground workings by packing or with suitable support system 45 collieries. c. Division of roa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted a high Power Committee under the Chairmanship of Secretary, Ministry of Coal with other members from the Govt. of Bihar West Bengal, Planning Commission, DGMS, Ministry of labour, Chairman CIL, CMDs of ECL, BCCL CMPDI with director(Tech), Ministry of Coal as member Secretary to review the problems of fire subsidence in Jharia and Raniganj coal fields and suggest measures to deal with problems of existing habitation on subsidence/ fire prone areas. The Committee was also asked to suggest areas for resettlement mechanism for evacuation and resettlement of affected population and Institutional arrangement to prevent new habitation in fire and subsidence prone areas. Subsequently, Ministry of Coal directed CMDI to study in depth problems of subsidence and fire in BCCL and ECL, and submit its report. As the fire problem was already studied under World Bank funding, two separate projects relating to subsidence and rehabilitation problems were funded by Ministry of Coal, under Coal S T Grant as EMSC projects. The projects were as follows: SL No. Name of the Project Sanctioned Capital 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement needs where subsidence control is not feasible and assessment of fund requirement for both in the leasehold of BCCL (Phase-II) formed the basis for preparation of the Master Plan prepared in 1999. 2.1. In the light of the aforesaid historical background, during the previous year relevant to Assessment Year 2004-05, the appellant in its written submission stated as under: the Board of Directors of the company pursuant to a decision taken by the Ministry of Coal, Government of India has set up a rehabilitation fund for the purpose of shifting and rehabilitation, dealing with fire and stabilization of the areas under ECL and BCCL, being two subsidiaries of the company. According to the said decision, the Board of directors of the company has directed its subsidiaries (except ECL and BCCL) to contribute to the fund an amount equivalent to ₹ 6/- per tonne of coal realized by each of the said subsidiaries. The said fund is to be maintained by the company under the account head Rehabilitation Fund and is to be made available for rehabilitation of ECL and BCCL in accordance with the action plan suggested by the Ministry of Coal as stated above. 3. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision directed its subsidiaries (except ECL and BCCL) to contribute to the fund an amount equivalent to ₹ 6/- per tonne of coal realised by each of the said subsidiaries. The said fund is to be maintained by the appellant under the account head Rehabilitation Fund and is to be made available for rehabilitation of ECL and BCCL in accordance with the action plan suggested by the Ministry of Coal. The appellant otherwise had no legal right to receive the money from its subsidiary companies the money received by the company has to be used as per the direction of Coal Ministry and the company had no control to use this money. As per the appellant, the company is merely acting as a custodian of such money and is required to release the money as per the direction of concerned Ministry and therefore the sum of ₹ 9723.28 lacs on account of interest cannot be treated as its income. 15. It is held that the Ministry of Coal, Government of India, New Delhi has instructed to create the funds not in its sovereign capacity but only as a controlling and guiding authority as is usually done by the apex body of the companies. The funds have been collected not as per or under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming the addition made by the assessing officer on account of interest of ₹ 6305.24 lakhs earned on amount contributed by subsidiaries towards the shifting and rehabilitation fund. 2(b) That the finding of the CIT(Appeals) is contrary to the facts and circumstances of the case. 6. The Ld. AR stated that this issue is covered in favour of the assessee in its own case by the order of this tribunal in ITA No. 358/Kol/2013 (for AY 2009-10) ; ITA No. 252/Kol/2014 (for AY 2010-11) dated 5.4.2017. In response to this, the Ld. DR vehemently relied on the findings of the Ld. CIT(A). 7. We have heard the rival submissions. We find that the issue under dispute is squarely covered by the order of this tribunal supra wherein it was held as under:- 15. We have heard the rival submissions. The facts stated hereinabove remained undisputed and hence the same are not re-iterated for the sake of brevity, with regard to the purpose of creation of shifting and rehabilitation funds and collection of moneys by the assessee from its subsidiaries. We find that the assessee does not have any control over the utilisation of the said funds as per its own wish and is merely acting on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of the assessee. It is a fact that the Income arising out of the Investments made out of the Balance of UI charges, actually belonged to WBERC which was a Commission formed by the Government and consequently such interest being the income of the Government, there should not arise any taxability thereof. However, the Assessing officer observed that according to him SLDC was merely the custodian of the account and allegedly it did not have any proprietary rights to the funds or incidental incomes generated there from. The Assessing Officer also stated that deposits had been made from the funds of the assessee and not of SLDC and the funds did not form parts of the account of the SLDC at all. The Assessing Officer went on to hold that the assessee's PAN had correctly been utilized for the maintenance of the Account. The Assessing Officer also stated that in his Order that the accounts have been opened in terms of the scheme formulated by the West Bengal Electricity Regulatory Commission (WBERC) and it was that body which directed the levy of UI charges as well as any other such payments. He further mentioned that since the funds had not been transferred to WBERC as suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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