TaxTMI 
TaxTMI 
2012 (1) TMI 313
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....ancial year 2004-05. The Assessing authority in its order vide Annexure-C at paragraph 4.1 has made the following observations relating to the averments made by the assessee to seek the said deduction as capital expenditure. "4.1 The assessee,, vide letter dated 28.02.2007, submitted that the payment of Rs. 1,27,22,600/- towards contribution for compensatory afforestation as per the directions of the Supreme Court is debited as forest lease rentals. This payment is collected for forest land diverted for non-forestry purposes under Forest (Conservation) Act, 1980. This payment was collected by the State Government as per the orders dated 30.10.2002 of the Hon'ble Supreme Court. The assessee filed copy of the orders of the Supreme Court and ....
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.... Tax Act, 1961." --- 2. IN paragraph no. 4.3 of the said order, the Assessing Authority has given the following reasons to reject the request and restricted 1/14th of the said amount as expenditure. "4.3. As could be seen from the above facts though the said expenditure of Rs. 1,27,22,600/-, being payment representing net present value towards compensatory afforestation in respect of leased area measuring 20.23 hectares was for the purposes of the assessee's business, the entire expenditure is not attributable to the financial year 2004.05 under consideration. The assessee has carried on mining activity on the part of the said leased area just for 3 months and mined are to the extent of 1,29,868 tones as against the total mineable reser....
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....x vide order at Annexure-B confirmed the order of the Assessing Authority. The appellate Tribunal vide Annexure-A has made the following observation. "We find force in the submission of the learned counsel that payments to the Government are to be paid once the mining lease is obtained and such payments are to the paid once the mining lease is obtained and such payments are governed by various acts along with the Apex Court making a ruling for State Governments to participate in the granting of mining lease by recovering compensation when their forests are uprooted. Therefore for this purpose, the funds are used for a natural regeneration which the assessee participates indirectly. Therefore at no pint of time could it be said that the ass....