TMI Blog2017 (5) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the Judgment of Empire Jute Co. Ltd. vs. Commissioner of Income Tax (1980 (5) TMI 1 - SUPREME Court), we are of the opinion that the expenses which gives fruitful result require to be done according to the necessity of relevant time and development with the nature of expenses. - Decided in favour of the assessee. - D.B. Income Tax Appeal No. 33 / 2007, 362 / 2008 , 651 / 2009 , 653 / 2009 , 32 / 2011, 92 / 2012, 229 / 2012, D.B. Income Tax Appeal No.63/2010 - - - Dated:- 30-5-2017 - HON'BLE MR. JUSTICE K.S. JHAVERI AND HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHUR For the Appellant : Mr. Anuroop Singhi with Mr. Aditya Vijay For the Respondent: Mr. Sanjay Jhanwar with Ms. Archana JUDGMENT 1. In all these appeals common question of law and facts are involved and they are filed against the same assessee hence are decided by this common judgment. 2. By way of these appeals, the department has challenged the judgment and order of the tribunal whereby tribunal has partly allowed the appeal filed by the department. 3. This court while admitting the appeals framed following substantial questions of law:- Appeal No.33/2007 1. Whether in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143,603/- as revenue expenditure, out of which expenditure of ₹ 9,02,000/- was even disallowed by the CIT(A), ignoring the provisions of section 37(1) of the Act, 1961, and inspite of the fact that the assessee by virtue of said expenditure has acquired benefits of enduring nature and were thus, not allowable as revenue expenditure? Appeal No.653/2009 (1) Whether on the facts and circumstances of the case, the Tribunal was justified in holding the mine development expenditure of ₹ 89,58,545/- as revenue expenditure, inspite of the fact that the assessee by virtue of said expenditure has acquired benefits of enduring nature and were thus, not allowable as revenue expenditure? (2) Whether on the facts and circumstances of the case, the Tribunal was justified in holding the compensation of ₹ 51,32,840/-, paid to the land owners from acquiring mineral from land, as revenue expenditure, inspite of the fact that the assessee by virtue of said expenditure has acquired right of enduring nature and were thus, not allowable as revenue expenditure? (3) Whether on the facts and circumstances of thecase, the Tribunal was justified in holding the expenditure incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee by virtue of said expenditure has acquired benefits of enduring nature and were thus, not allowable as revenue expenditure? 3. whether on the facts and circumstances of thecase, the Tribunal was justified in holding the compensation of ₹ 90,44,431/- paid to land owners/farmers for using their land for extraction of minerals, as revenue expenditure, inspite of the fact that the assessee by virtue of said expenditure has acquired right of enduring nature and were thus, not allowable as revenue expenditure? 4. whether the Tribunal as well as the CIT (A) werejustified in deleting the disallowance of ₹ 10,00,000/- contributed by the assessee to State Renewal Fund, which was disallowed by Assessing Officer as the same was merely an application of fund and not an expenditure? Appeal No.92/2012 1. whether the Tribunal as well as the CIT (A) werejustified in holding the expenses claimed as compensation for rock phosphate of Rs. 11,50,27,957/- as revenue expenditure, inspite of the fact that the assessee by virtue of said expenditure has acquired benefits of enduring nature and were thus, not allowable as revenue expenditure? 2. whether the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Rajasthan Mines Minerals Ltd. D.B. ITA No.107/2004 decided on 17.1.2017 wherein it has been observed as under:- It is not in dispute that the issue is raised in this appeal is squarely covered by the Division Bench judgment of this Court in D.B. Income Tax Reference No.1/2000 (CIT, Jaipur vs. Rajasthan State Mines Minerals Ltd.) decided on 15.9.2016 wherein it has been held as under:- Taking into consideration the fact initially the Corporation has not accepted the liability, therefore, the observations which are made by the Tribunal for the year 1991-92 were in the peculiar facts where the liability was not accepted but subsequently for the year 1992-93, the Corporation has accepted the liability which was shown in the books of account and in view of the matter additions made by the tribunal for the relevant year would not be applicable in the changed circumstances. Since, they accepted the liability, the resolution which is sought to be passed on 28.8.1992 was administrative formality but for the Income-tax purpose it is shown in the books of account mercantile system, therefore, though the point raised by Mr. Singhi is remained an academic issue but facts and la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account and in view of the matter additions made by the tribunal for the relevant year would not be applicable in the changed circumstances. Since, they accepted the liability, the resolution which is sought to be passed on 28.8.1992 was administrative formality but for the Income-tax purpose it is shown in the books of account mercantile system, therefore, though the point raised by Mr. Singhi is remained an academic issue but facts and law in mercantile system which is debited for the relevant year i.e. 1992-93. It is thus very clear that the survey expenses are almost identical and hence required to be allowed as revenue expenses. In view of the observations made by the Supreme Court in the Judgment of Empire Jute Co. Ltd. vs. Commissioner of Income Tax (Supra), we are of the opinion that the expenses which gives fruitful result require to be done according to the necessity of relevant time and development with the nature of expenses. 6. We have heard counsel for the parties. 7. In view of the above, the issues are answered in favour of the assesee and against the department. It is held that the expenses incurred are revenue expenditure and not capital expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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