TMI Blog2019 (7) TMI 1853X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 - - - Dated:- 3-7-2019 - N.V. Vasudevan, Vice President and Jason P. Boaz, JJ. For Appellant: B.S. Balachandran, Advocate For Respondents: A. Ramesh Kumar, JCIT ORDER Jason P. Boaz, J. 1. This appeal by the assessee is directed against the order of CIT(A), Gulbarga, dated 30.08.2018 for Assessment Year 2012-13. 2. Briefly stated, the facts relevant for disposal of this appeal are as under: 2.1. The assessee, a company engaged in the business of mining of iron ore and power generation, filed its return of income for Assessment Year 2012-13 on 29.09.2012 declaring loss of (-) ₹ 11,17,87,318/-. The return of income was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or modify or revise any ground at the time of hearing before the Hon'ble ITAT. 3.2. The only issue agitated by the assessee in this appeal, in the grounds raised (supra), is in assailing the impugned order of the CIT(A) for upholding the disallowance of the assessee's contribution to the Federation of Indian Mineral Industries (FIMI) of an amount of ₹ 25,00,000/-, without appreciating the fact that the said sum was incurred on grounds of commercial expediency and accordingly allowable expenditure under section 37(1) of the Act. The learned AR was heard in support of the grounds raised (supra) and reiterated the assessee's submissions put forth before the authorities below. In support of the assessee's contentions, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, at paras 13 to 17 thereof, it was held as under:- 13. Ground No. 4 in the appeal relates to disallowance of an amount of ₹ 50 lacs on account of contribution towards Federation of Indian Mining Industries Building Fund. To a query by the AO during the course of assessment proceedings, the assessee replied that Federation of Indian Mining Industries was engaged in liaisoning with various Government bodies on mining related issues and since it provides support to mining industries and the assessee is rendering services to the mining industries, the expenditure was wholly and exclusively incurred for the purpose of business. However, the AO did not accept the submissions of the assessee on the ground that the assessee failed to es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are closely linked with the welfare of mining industry, the expenditure is admissible as revenue. 16. On the other hand, the ld. DR supported the findings of the ld. CIT(A) on the ground that the amount conferred enduring benefit to the assessee, spread over a number of years and thus, could not be allowed as revenue expenditure. 17. We have heard both the parties and gone through the facts of the case as also the aforesaid decisions relied upon by the ld. AR. As is apparent from the aforesaid facts, an amount of ₹ 50,00,000/- has been contributed towards building fund of Federation of Indian Mineral Industries, the assessee being one of the members of the said Federation. The ld. CIT(A) treated the amount in the nature of donat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of the ITAT that the amount advanced by the assessee-employer for construction of houses under Subsidised Industrial Scheme for its employees would be in the nature of a revenue expenditure and the fact that the scheme was not for any temporary or particular duration makes little difference to the nature of the expenditure. In Rajasthan Spinning and Weaving Mills Ltd(supra) contribution to the export promotion fund made by the assessee for promoting its business interest by augmenting exports was held to be incurred and laid out wholly and exclusively for the purpose of the assessee's business. In L.H. Sugar Factory and Oil Mills P. Ltd. v. CIT [1980] 125 ITR 293 (SC) the Hon'ble Supreme Court allowed the contribution made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sectors of the country. It represents the entire non-fuel mining and mineral processing activities of the nation. Apparently, the expenditure incurred by the assessee by way of contribution towards building fund of the said federation, is for commercial consideration and it is not incurred for the purpose of securing any capital assets. In the light of view taken in the aforesaid decisions, we are of the opinion that contribution towards building fund of Federation of Indian Mineral Industries, of which the assessee is a member, has been incurred with a view to obtaining a commercial advantage and is allowable as revenue expenditure. In view thereof, ground No. 4 in the appeal is allowed. 3.4.3. Respectfully following the above cited d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
