ACIT, CIRCLE-13(1), HYDERABAD vs. THE SINGARENI COLLIERIES COMPANY LIMITED, KOTHAGUDEM

ITA 778/HYD/2026Status: DisposedITAT Hyderabad16 October 2026AY 2022-239 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the Ld. CIT(A) and dismissed the Revenue's appeal. The Tribunal noted that the CIT(A) deleted the addition by following the Tribunal's own decisions in the assessee's case for Assessment Years 2015-16, 2016-17, and 2020-21. The Tribunal referred to its earlier orders (ITA Nos. 300, 301 and 308/Hyd/2024) where, on identical issues, it had followed its decision for AYs 2011-12 to 2014-15 and dismissed the Revenue's grounds. The Tribunal found that the issue regarding the applicable rate of depreciation on mine development expenditure was covered by its previous decisions in the assessee's own case. The Revenue had not presented any distinguishing facts or changes in law to warrant a different view. Therefore, respectfully following its own precedents, the Tribunal upheld the deletion of the addition of Rs. 37,05,69,508/-.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) for Assessment Year 2022-23. The assessee, The Singareni Collieries Company Ltd., a government company engaged in coal mining and power generation, filed its return declaring a total income of Rs. 12,09,29,71,690/-. The Assessing Officer (AO) completed the assessment under section 143(3) read with section 144B, making additions of Rs. 69,71,96,353/-. The dispute pertains to the AO's disallowance of depreciation amounting to Rs. 37,05,69,508/- claimed by the assessee at 15% on mine development expenditure, treating it as 'plant and machinery'. The AO restricted depreciation to 10%, considering the expenditure as 'building'. The CIT(A) deleted this addition, allowing depreciation at 15%.

What were the issues?

1. Whether civil structures like tunnels, retaining walls, and RCC bridges, incurred as mine development expenditure within coal mines, are to be treated as 'Plant and Machinery' eligible for depreciation at 15%, or as 'building' eligible for depreciation at 10% (Question of law and fact, concerning the classification of assets for depreciation). Assessee's contentions: - Coal mines and mine development constitute 'plant' as held by the Jurisdictional High Court in CIT v. Singareni Collieries Co. Ltd. (221 ITR 48). - Mine development expenditure is integrally connected with the extraction of coal. - The ITAT Hyderabad has consistently allowed depreciation at 15% in the assessee's own case from AY 2011-12 onwards, including recent orders for AYs 2015-16, 2016-17, and 2020-21. - The pendency of departmental appeals does not dilute the binding nature of ITAT decisions. - The AO's action is contrary to judicial discipline. - The functional test laid down by the Supreme Court in CIT v. Karnataka Power Corporation (247 ITR 268) applies, as the structures are integral to mining operations. Revenue's contentions: - The Ld. CIT(A) erred in treating civil structures as 'Plant and Machinery' instead of 'building'. - The AO restricted depreciation to 10% as they fall under the definition of 'building'. - The AO made the disallowance to maintain consistency of the departmental stand, as appeals filed by the Revenue were pending.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘B‘ Bench, Hyderabad

Before: Shri Ravish SoodShri Madhusudan Sawdia

Hearing: 15/10/2026

Per Madhusudhan Sawdia, A.M.: This appeal is filed by the Revenue, feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi (“Ld. CIT(A)”) dated 05.01.2026 for the A.Y. 2022-23. 2. The Revenue has raised the following grounds of appeal:

ITA No 778 of 2026 The Singareni Colleries Company Ltd

“1. The Ld CIT(A) has erred both in Law and on facts in holding that civil structures l

The order continues below.

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