THE JOINT COMMISSIONER OF INCOME TAX vs M/S SRI. KUMARASWAMY MINERAL EXPORTS

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 8TH DAY OF MARCH 2017

PRESENT

THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MR.JUSTICE N K SUDHINDRARAO ITA NO.6004/2013 BETWEEN:

THE JOINT COMMISSIONER OF INCOME TAX BELLARY RANGE, BELLARY, THROUGH THE COMMISSIONER OF INCOME TAX, GULBARGA AYKAR BHAVAN, SEDAM ROAD, GULBARGA

...APPELLANT (BY SRI.E.I.SANMATHI, ADVOCATE)

AND:

M/S SRI.KUMARASWAMY MINERAL EXPORTS NO.54-J, III MAIN, PARVATHI NAGAR BELLARY-583101

...RESPONDENT (BY SRI.A SHANKAR, ADVOCATE)

THIS ITA IS FILED U/S. 260A OF THE INCOME TAX ACT, 1961, BY THE ADVOCATE FOR APPELLANT PRAYING TO ALLOW THIS APPEAL AND SET ASIDE

2 THE ORDER DATED 31.01.2013 (RECEIVED ON 19.02.2013) IN FILE NO: ITA 650/BANG/2009 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH-B, PARTLY SETTING ASIDE THE JUDGMENT AND ORDER DATED 01.04.2009 PASSED IN APPEAL NO. ITA 136/CIT(A) HBL/08-09 BY THE COMMISSIONER OF INCOME TAX (APPEALS), HUBLI, WHEREIN, THE ASSESSMENT ORDER DATED 30.12.2008 AGAINST THE ASSESSEE / RESPONDENT FOR THE ASSESSMENT YEAR 2006-07 IS CONFIRMED AND PASS ANY OTHER APPROPRIATE ORDERS, IN THE INTEREST OF JUSTICE.

THIS APPEAL COMING ON FOR HEARING THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING:

JUDGMENT

The appellant-revenue has preferred the present appeal by raising the following substantial questions of law: “1. Whether the Income Tax Appellate Tribunal was justified in holding that the amount paid by the assessee to the Deputy Conservator of Forest towards Compensatory aforestation management and planning

3 agency is not the capital expenditure and hence is an allowable deduction? 2. Whether the Income Tax Appellate Tribunal being the final fact finding authority, is justified in remanding to the Commissioner of Income Tax (Appeals) the issue in regard to the disallowance of the deduction towards the deferred revenue expenditure? 3. Whether no amount is actually paid during the relevant year, whether the deferred revenue expenditure is deductible?”

We have heard Mr.Sanmathi, learned counsel for appellant-revenue and Mr.A.Shankar, learned counsel for the respondent-assessee. 3. As such, the only two questions would arise for consideration. One is question No.1 and in the second question, there appears to be typographical error since the matter is remanded to the assessing officer and not to the Commissioner of the Income Tax (Appeals). So far

4 as question No.1 is concerned, in our view, the matter stands covered by the decision of this Court passed today in ITA No.144/13 pertaining to the amount paid by the assessee towards Compensatory aforestation management and planning agency for the mining lease and therefore, as such, question would not remain as substantial question of law but even if it is to be examined and answered, it would stand answered against the Revenue and in favour of the assessee. 4. We may also record, in the order passed in ITA 144/13, it has been observed thus: “The appellant-revenue has preferred the present appeal by raising the following substantial questions of law:

“1. Whether on the facts and circumstances of the case, the Tribunal’s order can be said as perverse in nature as Tribunal has relied upon a decision which has not reached finality?

5 2. Whether on the facts and circumstances of the case, the Tribunal is right in law in holding that the assessing authority ought not to have held that the amount of Rs.5,02,59,000/- paid by the assessee towards Net Present Value for mining lease to forest department is to be amortised over a period of five years starting from A.Y.2004-05 and as such the said expenditure is Capital Expenditure?”

As such, in our view, the only question of law which may arise is, whether the payment made by way of compensation of Rs.5,02,59,000/- by the assessee as per the direction of the Apex Court for mining lease to the Forest Department can be said as a revenue expenditure or a capital expenditure?.

We have heard Mr.Sanmathi, learned counsel for the appellant-revenue and Mr.A.Shankar, learned counsel for the respondent-assessee.

As such, the Tribunal in the impugned order has relied upon its earlier decision in case of M/s.Ramgad Minerals and Mining Pvt.Ltd., vs. ACIT in ITA 1012(BNG)/2008 dated 9.4.2009. It has been brought to our notice by the learned

6 counsel for respondent-assessee that the very decision of the Tribunal in case of Ramgad Minerals (supra) was carried before this Court in ITA 5021/09 and this Court has dismissed the appeal of the Revenue and it has been further stated that SLP was preferred against the aforesaid decision of this Court in case of Ramgad supra and the said SLP has also been dismissed.

We may record that in view of aforesaid decision as such, no substantial questions of law would arise for consideration. But even if it is to be examined, in view of the aforesaid decision that the decision of the Tribunal has been not interfered with by this Court and SLP is dismissed, the question has to be answered against the Revenue and in favour of Assessee.

The appeal stands disposed of accordingly.”

So far as the second question is concerned, in our view, it can hardly be considered as substantial question of law because the discretion has been exercised by the Tribunal for remanding the matter to the Assessing Officer. No perversity can be found when

7 the Tribunal has not given any finding of fact. Hence, the second question need not be answered. 6. The appeal stands disposed of accordingly.

Sd/- JUDGE

Sk/-

THE JOINT COMMISSIONER OF INCOME TAX vs. M/S SRI. KUMARASWAMY MINERAL EXPORTS