PR COMMISSIONER OF INCOME TAX JAIPUR-II vs. MS BARMER LIGNITE MINING COR LTD

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 84/2018 Principal Commissioner Of Income Tax, Jaipur-Ii, Jaipur Raj ----Appellant Versus M/s Barmer Lignite Mining Crop. Ltd., 2 3Rd 7Th Floor , C-44 Sardar Patel Marg, C-Scheme Jaipur Raj ----Respondent For Appellant(s) : Mr. K.D. Mathur for Mr. R.B. Mathur For Respondent(s) : Mr. Sanjay Jhanwar with Ms. Archana HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 17/04/2018 1. By way of this appeal, the appellant has assailed the judgment and order of the tribunal whereby tribunal has partly allowed the appeal of the assessee for statistical purpose and dismissed the appeal of the department. 2. Counsel for the appellant has framed following substantial question of law:- Whether in the facts and circumstances of the case the admissibility of Mines Closures Plan of Rs.47080000/- is permissible expenditure I the year under consideration. 3. The facts of the case are that the case of the assessee was picked up for scrutiny assessment and the assessment under section 143(3) of the Income Tax Act, 1961 (hereinafter referred

(2 of 3) [ITA-84/2018] to as the Act) was framed vide order dated 25.02.2015. While framing the assessment, the AO made addition of Rs. 63, 44,181/- on account of disallowance of land tax paid on the ground that the assesee himself had stated that the amount had been deposited under the direction of the court and the matter was sub-judice before the Hon’ble Rajasthan High Court. Hence, the Assessing Officer made addition on account of disallowance of Mine Closure charges of Rs. 4,70,80,000/-, the Assessing Officer also made addition on account of Interest on Deposits of Rs. 13,40,90,000/-, the Assessing Officer made other disallowance in respect of Corporate Social Responsibility Expenditure of Rs. 9508197/-, disallowance on Legal and Professional Expenses of Rs. 44,81,910/-, Upfront Fees paid of Rs. 52,58,106/-, Legal Expenses Paid to Industrial Development Financial Corporation Limited of Rs. 1,94,94,460/-, Difference in Claim of Depreciation for Rs. 8,18,38,172/-, disallowance on Depreciation on Intangible Assets of Rs. 42,49,575/-, Adjustment u/s 145A of the Act of Rs. 5,33,18,202/-. 4. Counsel for the respondent has relied upon the decision of this court in ITA No.151/2016 (Principal Commissioner of Income Tax-III vs. Rajasthan State Mines & Minerals Ltd.) decided on 13.10.2017 wherein it has been held as under:- 5. Regarding issue no.5, counsel for the appellant has relied upon the observations made by the AO which reads as under:- 3.10 Provision for Mines Closure F.Y. 2009-10:- During the assessment proceedings the assessee claimed as under: “In compliance to guidelines dated 27.08.2009, as amended from time to time, by Ministry of

(3 of 3) [ITA-84/2018] Coal, Government of India, for preparation of Final Mine closure, company has provided sum of Rs. 2,49,04,000/- towards proportionate mines closure expenses for the financial year 2009-10 in the books of accounts prepared for financial year 2009-10 in the books of accounts prepared for Financial Year 2011-12 as prior period expenses of Rs.2,49,04,000/- while making computation of total income for the assessment year 2012-13. As the assessment proceedings for the year are under progress, it is requested toallow the claim of the assessee while passing the assessment order u/s 143(3). Copy of Income

Tax

Return

Acknowledgement, computation of total income and notes to the computation are enclosed for the ready reference.” I have gone through the claim made by the assessee in respect of towards proportionate mines closure expenses for the financial year 2009-10 amounting to Rs. 2,49,04,000/-. As the assessee itself mentioned in his reply that the expenditure has not been debited in the books of accounts for the assessment year under consideration therefore no question of its allowability arises. Even otherwise, legally also the claim of the assessee is not valid in view of the decision of Hon’ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT 284 ITR 323, that claim of deduction not made in the return cannot be entertained by AO otherwise than by filing revised return. 6.1 Regarding issue no.5, it is not reflected in the books of accounts without taking closure of a mining is a statutory liability and the same is for the subsequent year reflected, therefore, in view of the decision rendered by the tribunal, we are of the opinion that the tribunal has not committed any error. 5. In that view of the matter, no substantial question of law arises. 6. The appeal stands dismissed. (INDERJEET SINGH),J (K.S.JHAVERI),J Brijesh 38.