COMMISSIONER OF INCOME TAX III vs. M/S MYSORE MINERALS LTD

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ITA/144/2013HC KarnatakaKAHC01018028201308 March 2017Bench: JAYANT PATEL,N.K.SUDHINDRARAO5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the payment for the mining lease was a revenue expenditure. The Tribunal's decision, which was upheld by the High Court and had its SLP dismissed, was considered binding.

What were the facts?

The assessee paid Rs. 5,02,59,000/- towards Net Present Value for a mining lease, as directed by the Apex Court. The Assessing Officer treated this as capital expenditure to be amortized over five years, but the Tribunal relied on its earlier decision in a similar case.

What were the issues?

Whether the payment for a mining lease is capital or revenue expenditure, and whether the Tribunal's reliance on a prior decision that had reached finality was correct.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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.144/2013 BETWEEN:

1.

COMMISSIONER OF INCOME TAX III QUEENS ROAD, BANGALORE.

2.

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-12(1) BANGALORE.

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

AND:

M/S MYSORE MINERALS LTD NO.39, M.G.ROAD, BANGALORE-560001

...RESPONDENT (BY SRI.A SHANKAR & M LAVA, ADVOCATES)

2 THIS ITA IS FILED UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 02/11/2012 PASSED IN ITA NO.679/BANG/2010, FOR THE ASSESSMENT YEAR 2004-05, PRAYS TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND SET ASIDE THE APPELLATE ORDER DATED 02/11/2012 PASSED BY THE ITAT, 'C' BENCH, BANGALORE IN APPEAL PROCEEDINGS ITA NO.679/BANG/2010, AS SOUGHT FOR IN THIS APPEAL.

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 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? 2. Whether on the facts and circumstances of the case, the Tribunal is

3 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?”

2.

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?.

3.

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

4 4. 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 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.

5.

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

5 dismissed, the question has to be answered against the Revenue and in favour of Assessee.

6.

The appeal stands disposed of accordingly.

Sd/- JUDGE

Sd/- JUDGE

Sk/-

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