TMI Blog2017 (12) TMI 1784X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case M/s.Ramgad Minerals Minings Pvt. Ltd.,[ 2012 (1) TMI 313 - KARNATAKA HIGH COURT] is misplaced in the light of the decision of the larger bench decision of the Hon ble Supreme Court in the case of Aditya Minerals Pvt. Ltd [ 1998 (2) TMI 8 - SUPREME COURT] Then an issue may arise as to whether this expenditure can be allowed on a staggering basis spread over lease period as revenue expenditure in the light of the decision of the Hon ble Supreme Court in the case of Madras Industrial Corporation [ 1997 (4) TMI 5 - SUPREME COURT] Needless to mention that if the payment is capital in nature, expenditure cannot be allowed on staggered basis. Even for the purpose of spreading over period of lease, it is essential that the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the sake of convenience. 2. Now, we shall take up the revenue s appeals. The revenue raised the following grounds of appeal for assessment year 2008-09: Identical grounds of appeal, except change in figures, are raised by the revenue for assessment years 2009-10 to 2012-13. 3. For the sake of clarity and convenience, facts relevant to assessment year 2008-09 are stated herein: The respondent-assessee is an individual engaged in the business of extraction of Iron ore and trading in Iron ore. The return of income for the assessment year 2008- 09 was filed on 30/09/2008 disclosing taxable income of ₹ 3,17,38,490/-. The said return of income was revised admitting additional income of ₹ 5,84,01,227/- on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. The assessee is in cross objections contesting the finding of the CIT(A) upholding the addition on account of advance lease rental debited to P L Account. 7. The ld.CIT(DR) submitted that lease premium paid is capital and therefore, the same cannot be allowed as a deduction. He also placed reliance on the decision of Hon ble Supreme Court in the case of R.B.Seth Molchand Suganchand vs. CIT (86 ITR 647)(SC) On the other hand, learned counsel for the respondent-assessee submitted that this issue is covered by the decision of the co-ordinate bench of Tribunal in the case of P.Abubakar vs. DCIT in ITA No.725/Bang/2009 dated 22/01/2010 and the decision of the Hon'ble jurisdictional High Court in the case of M/s.Ramgad Minerals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was held to be revenue expenditure. Subsequently, the Hon ble Apex Court held in the case of Aditya Minerals Pvt. Ltd. vs. CIT (236 ITR 39)(SC) perceived difference of opinion between co-ordinate benches of the Hon ble Supreme Court in Pingle Industries (supra) and Gotan Lime Syndicate (supra) and therefore, referred the matter to a larger bench. This controversy was resolved by bench consisting of 5 judges in Aditya Minerals Pvt. Ltd. vs. CIT (239 ITR 817) wherein it was held that there was no conflict of decisions of Hon ble Apex Court in Pingle Industries (supra) and Gotan Lime Syndicate (supra) as there was material difference between facts of the case of Pingle Industries (supra) and the facts of the case in Gotan Lime Syndicate (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment therein was 'not a direct payment for securing an enduring advantage; it has relation to the raw material to be obtained. The Court, thus, accepted the argument on behalf of Gotan Lime Syndicate's case ((supra) that what it got was a right to get lime for manufacturing and the payment had a direct relation to the amount of lime that was removed. 5. In the case before us, as indicated by the lease deed, what was to be paid by the assessee was rent for the land that was leased. It was payable at the rate of ₹ 35 per acre per month. The assessee was required to pay in advance the rent calculated at this rate for the entire period of the lease, i.e., fifteen years, in the form of a 'deposit'. The deposit was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure. Thus, grounds of appeal of the revenue are allowed. 10. Identical issue is raised by the revenue in the grounds of appeal in ITA Nos.363 to 366/Bang/2016. Since identical issue is decided by us in favour of revenue in ITA No.362/Bang/2016, for parity of reasons stated therein the grounds of appeal raised by the revenue for assessment years 2009-10 to 2012-13 in ITA No.363 to 366/Bang/2016 are allowed. 11. In the result, all the appeals filed by the revenue are allowed. 12. In CO Nos.2 to 6/Bang/2017, grounds of cross objections are filed by the assessee-company challenging the finding of the ld.CIT(A) confirming the addition of advance lease rental debited to P L Account These grounds of cross objections are not pressed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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