9911796707
TMI Blog2021 (7) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn was selected for scrutiny under CASS and notice u/s 143(2) dated 02/08/2012 was issued and served on the assessee. During the scrutiny proceedings the assessee filed its revised computation enhancing the net taxable from Rs. 86,30,00,000/- to Rs. 94,71,30,796/-. After issuing the statutory notices, the AO completed the assessment assessing the total income of the assessee at Rs. 106,23,04,347/- by making the following additions: 1. Addition on account of rehabilitation expenses Being capital in nature - Rs. 10,27,39,144/- 2. Addition on account of penalty suspense account - Rs. 1,23,04,407/- 3. Addition on account of donations - Rs. 1,30,000/- 4. When the assessee preferred an appeal before the CIT(A), the CIT(A) deleted the addition of Rs. 10,27,39,144/- made on account rehabilitation expenses and confirmed the additions on account of penalty suspense account - Rs. 1,23,04,407/- and account of donations - Rs. 1,30,000/-. 5. Aggrieved by the order of CIT(A), both the assessee and revenue are in appeals before the ITAT. 6. As regards the grounds raised by the revenue against the action of the CIT(A) in deleting the addition of Rs. 10,27,39,144/- account rehab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,23,04,418/- during the financial year 2010-11. However, as per clause 25.6 if the contractor compensated the short fall in 1st or 2nd half of any year in subsequent 6 months period, the penalties recovered for such quantities will be released. Based on this clause as the contractor fulfills the conditions the amount recovered earlier was refunded to the contractor on 03.05.2011 and 17.09.2011. Hence, we contended the penalty suspense amount recovered during FY 2010-11 would not be treated as our income. 7.2 The AO held that the contention of the assessee is not acceptable as the assessee had not shown any evidence that the amount recovered earlier was refunded to the contractors during the FY 2011-12. Since the amount was already recovered and the same pertains to revenue account and as the corresponding expenditure relating to this contract was already claimed as expenditure, the recovered amount of Rs. Rs. 1,23,04,407/- has to be treated as income. Hence, the AO disallowed the amount of Rs. Rs. 1,23,04,407 and added back to the income returned. 7.3 Before the CIT(A), the assessee contended that the assessee has engaged different contractors for extracting ore from the mines a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. ITA No. 1790/Hyd/2018 by assessee for AY 2012-13 8. This appeal of the assessee is directed against the order of CIT(A) - 9, Hyderabad dated 27th March, 2017 on the following grounds of appeal: "1 The order of the learned Commissioner of Income-tax ( Appeals) is erroneous in law and on the facts of the case. 2 The learned Commissioner of Income-tax ( Appeals) erred in not adjudicating the grounds relating to addition of Rs. 1,18,48,159 towards prospecting and leasing expenses. 3 The learned Commissioner of Income-tax ( Appeals) erred in directing the Assessing Officer to allow the deduction for the amount of Rs. 1,69,53,355 in the next A.V .2013 -" on payment basis, since the amount is allowable in the current year itself on accrual basis which method the assessee had followed. 4 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was into commercial production for all the years. Further, it was stated that such exploration activity is akin to the activity of a real estate business man constructing a new venture in addition to the existing projects. Therefore, the expenditure incurred on such expanding activities cannot be considered as capital in nature as no new asset of enduring nature comes into existence. It was also stated that the mines are trading asset to the company and not a capital asset. The asset itself is exploited and sold by the company and accordingly, a trading asset for the assessee having regard to the nature of business in which assessee is operating. 10.2 Rejecting the submissions of the assessee, treating the above expenditure as capital in nature, the AO disallowed an amount of Rs. 1,06,63,344/-. 10.3 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored to the file of the Assessing Officer for factual verification of the expenditure and decision thereon. In the result the grounds relating to these additions are treated as partly allowed." 12.3 After hearing both the parties and perusing the material on record as well as going through the orders of the revenue authorities, we find that the 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. 13. In the result, appeals in ITA Nos. 328/Hyd/2016 and ITA No. 1790/Hyd/2018 are allowed for statistical purposes and the appeal in ITA No. 335/Hyd/2016 is dismissed. A copy of this common order be placed in the respective case files. Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
