TaxTMI 
TaxTMI 
2011 (8) TMI 1159
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....rent FY under section. 37(1) of the I.T. Act, 1961. (2) That the ld. CIT(A.) has erred in law as well as on facts by deleting the addition made for delayed payment of Employees' Contribution to the P.F. stating that the same is covered as per provision of Sec. 43B of the I.T. Act, whereas Sec. 2(24)(x) read with Sec. 36(1)(va) applies in the case of Employer's Contribution to the P.F. only. 2. At the time of hearing, ld. A.R. submitted that he has no objection in respect of Ground No. 2 of the appeal if the order of ld. CIT(Appeals) is reversed and the finding of Assessing Officer is restored as the assessee failed to deposit Employees' Contribution even before due date of filing of the return. 3. In view of the above submission of ld. AR, we restore the action of Assessing Officer by reversing the order of ld. CIT(Appeals). Hence, Ground No. 2 of the appeal taken by the Department is allowed. 4. Now coming to Ground No. 1 of the appeal, the relevant facts are that the assessee was engaged in the business of Mining as a licensee for mining in Nadidih Mines in Orissa, which was acquired by the assessee-company in the year 1979. During the assessment proceedi....
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....mental balance or to avoid pollution is in the nature of revenue expenses. It was contended that similar issue was considered by the Hon'ble Kolkata High Court in the case of M/s. Essel Mining & Industries in ITA No. 376 of 2005 in an appeal filed against the order of ITAT in ITA No. 2520/Kol./2004, wherein ITAT, Kolkata Bench decided the issue in favour of the assessee stating that afforestation expenditure should be treated as revenue in nature. 6. However, Assessing Officer did not agree with the contention of the assessee and stated that it is 'one-time levy' to meet the future social course. The Hon'ble Supreme Court has categorized it as a fee in Writ Petition No. 202 of 1995, under which the Users to pay NPV to the Forest Department. Assessing Officer stated that the said payment is a one time payment and accordingly held that it is capital in nature and added back to the income of the assessee. Being aggrieved, assessee filed appeal before the first appellate authority. 7. At the time of hearing, ld. AR and DR submitted that their contentions in the present case are on the same line as made in ITA No. 933/Kol./2009 in the case of ACIT -vs.- Rungta Sons (P)....
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....s also placed on the decision of ITAT, Ahmedabad in the case of JCIT -vs.- Deversons Industries Ltd. (2007) 290 ITR (AT) 287, wherein the amount paid to a State Agency for setting up and commissioning an effluent plant for the socio-economic upliftment of the population of the affected villages by the pollutants discharged by the assessees units was held to be a revenue expenditure. Ld. CIT(Appeals) considered the above submission of the assessee and the fact that mining was executed in the year 1982 and 1985 giving the right to the assessee to mining in the areas and the assessee was engaged in mining operation as a licensee and also considered the fact that assessee did not get any fresh right to mining by making this payment under the Order of the Hon'ble Apex Court in the assessment year under consideration. Ld. CIT(Appeals) has stated that assessee did not get any fresh right to acquire any capital asset nor any extension of right, but continued to carry on mining activities and after considering the decision of Hon'ble Apex Court in the case of Bikaner Gypsums Limited -vs.- CIT (1991) 187 ITR 39 held that the payment made by the assessee though is a one-time payment b....
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....of disability that arose in continuation of its mining business pursuant to the decision of the Hon'ble Apex Court in T.N. Godavaram Thirumalpad -vs.- Union of India in I.A. No. 826 in W.P.(C) No. 202/ 1995 delivered on 26.09.2005 on the issue of levy of NPV. He submitted that though NPV payment is a one-time payment, the same was not made to acquire any asset. Ld. AR submitted that the Hon'ble Supreme Court in the above case itself had held that payment of NPV is for protection of environment and not in relation to any proprietary rights. He submitted that the Hon'ble Apex Court also observed that the imposition of NPV is a charge or a fee which falls in Entry 47 read with Entry 20 of List III of 7th Schedule to the Constitution. It was observed that the fund set up is a part of economic and social planning, which comes within Entry 23 of List III and the charge which is levied for that purpose would come under Entry 47 of List III and, therefore, Article 110 is not attracted. It is relevant to state that Entry 47 read "fees in respect of any of the matters in this list, but not including fees taken in any court". Therefore, the Hon'ble Apex Court acknowledged that....
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....t Value (NPV) of such diverted land so as to utilize the amounts so received for getting back in long run the benefits which are lost by such diversion. Hon'ble Apex Court vide its guidelines for determination of NPV directed the Ministry of Environment and Forests to formulate a scheme providing that whenever any permission is granted for change of use of forest land for non-forest purposes, and one of the conditions of the permission should be that there should be compensatory afforestation, then the responsibility of the same should be that of user agency. Hon'ble Apex Court observed that the money so received towards NPV should be used for natural assisted re-generation, forest management, protection, infrastructure development, wildlife protection and management, supply of wood and other forest produce saving devices and other allied activities. In the context, Hon'ble Apex Court observed that NPV will not fall under Article 110 or 199 or 195 of the Constitution. It was observed that such payments were levied for rendering service which the state considers beneficial in public interest. It is a fee which falls in entries 47 of List-III of 7th Schedule of the Consti....
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....vantage of any enduring benefit, may, nonetheless, be on revenue account and the test of enduring benefit may break down. Hon'ble Apex Court observed that if the advantage consisted of merely in facilitating the concerned assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, expenditure would be on revenue account, even though the advantage may be endured for an indefinite future. 14. We observe that in the case before us, assessee has got right to carry on mining operations in 1982 and 1985, i.e. long time ago before the assessee was asked to pay NPV as per direction of Hon'ble High Court and consequently assessee was compelled to make the payment to facilitate to continue its mining business. Therefore, the above decision of Hon'ble Apex Court in the case of Bikaner Gypsums Limited (supra) squarely applies to the case of assessee and it could not be capital in nature. 14.1. A similar issue also came before Hon'ble Karnataka Bench of ITAT in the case of National Aluminium Co. Ltd. -vs.- DCIT [101 TTJ (CTK) 948]. In th....