2010 (1) TMI 1235

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....: Smt. Swati S. Patil O R D E R Per K.P.T. Thangal, Vice President This appeal by the assessee is for the assessment year 2006-07. 2. Ground Nos. 2 to 4 by the assessee is against the order of the CIT(Appeals) in confirming the findings of the Assessing Officer holding the expenditure incurred towards Compensatory Afforestation Management and Planning Agency (CAMPA) as capital expendit....

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....fit & loss account under the head Net Present Value. It was paid to Forest Department for transfer to Compensatory Afforestation Management and Planning Agency (CAMPA). The payment is made by every such user towards regeneration of forest for diversion of forest to non-forest use. Assessee was asked to explain why this expenditure should not be treated as capital expenditure. Assessee stated that ....

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....6. Aggrieved by the above order, the assessee approached the first appellate authority. For the proposition that this is an allowable expenditure u/s. 37, the assessee relied on the following decisions: (1) Dalmia Jain & Co. v. CIT 81 ITR 754 (SC) (2) CIT v. Associated Cement Co. 172 ITR 257 (SC) (3) Bikaner Gypsum Ltd. v. CIT 187 ITR 39 (SC) 7. The CIT(Appeals) noted....

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.... of capital asset, then it is revenue expenditure. The outgoing is towards carrying on of mining operations but not affecting or putting any restriction on sale or produce of appellant. He held then it will not be improving the trading facility or efficiency of the business. It is intrinsically related to capital asset and therefore it is capital expenditure. 8. Aggrieved by the order of the CI....