TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 1050
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....to consideration the difference between opening and closing value of nonvendible coal of Rs. 22,43,24,000/-. 4. At the outset, the Ld. AR of the assessee submitted that the assessee is a Public Sector Undertaking and on this issue the Ld. CIT(A) has given relief to the assessee by relying on the Tribunal's order in assessee's own case for AYs. 2003-04 to 2005-06. We note that the Ld. CIT(A) has given relief to the assessee by taking note of the decision of this Tribunal in assessee's own case for AY 2003-04 to 2005-06 in ITA No. 462 to 469/Kol/2019 dated 27.10.2016 which is seen placed at pages 8 and 9 para 12 to 14 of the Tribunal's order wherein we note that this issue is covered in favour of the assessee. We note that the Ld. CIT(A) at page 6 has decided this issue as under: "The value of this 472 M. T. of non-vendible col was shown as closing stock in hand in the balance sheet of the previous year i.e. during the AY 2008-09. However, for the current year i.e. 2009-10 the value of this non-vendible coal was not shown in the opening stock as well as in the closing stock as its value was considered was nil. For the previous AY 2008-09, the ITAT Kolkata bench vide ITA No. 2266/K....
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....ion to the copy of the AO's order found placed at pages 18 to 29 of the paper book. It was also brought to our notice that for AY 2008-09, the ACIT in his giving effect order dated 27.12.2019 after verification has allowed full claim of depreciation and AO's order is found placed at paged 32 to 33. In the light of the aforesaid facts which are not disputed and since the AO has allowed the claim of the assessee for 100% additional depreciation after verification for earlier years, in the normal course, we could have allowed it. However, since the main grievance of the revenue is that the assessee failed to justify the admissibility of additional depreciation by producing the break up of assets and also taking note of the action of the Tribunal in assessee's own case for AYs 2008-09 and 2009-10 we set aside the issue back to the AO with a direction for fresh adjudication after considering the details of plant and machinery used by the assessee for the purpose of extraction of coal. We note that the assessee has claimed to have produced the audited financial statement which gave all the required particulars before the authorities below. Since we are remanding the issue back to the A....
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.... along with working note on stowing subsidy. But failed to submit any documentary evidence in this regards as the proof of subsidy received. 5.4. Hence, in the light of the above fact, less showing of stowing subsidy amounting to Rs. 143.41 lakhs added to the income of the assessee company." 9. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who has given relief to the assessee by holding as under: "The A.O. had added Rs. 252.56 lakhs and Rs. 2647.52 lakhs to arrive at the subsidy accrued to the appellant during the relevant assessment year. But the amount of Rs. 2647.52 lacs shown as subsidy receivable, is not the subsidy receivable for the current year only but also includes the subsidy receivable for the earlier years as well. The total subsidy due for the AY 2009-10 was Rs. 50,70,29,057/-, which has been shown in the P& L Account under the head "other receipts". The AO, in the assessment order, had reduced from subsidy receivable of Rs. 2647.52 lakhs, this amount of Rs. 50.70 lakhs being subsidy received. But this amount of Rs. 2647.52 lakhs is not the subsidy received but is the subsidy receivable for the current AY, out of which Rs. 2521.56 lakhs have ....
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....uthorities. It was pointed out to us that an amount of Rs. 26,47,52,000/- is the balance amount to be received on account of all the years as on 31.03.2009 and the AO failed to appreciate that in the ledger head "subsidy receivable includes all the subsidy receivable". It was brought to our notice that from the details of receivable accounts it is revealed that opening balance as on 01.04.2008 was Rs. 29,89,57,887/- out of which subsidy the assessee received against opening balance was Rs. 28,91,19,093/- and the amount receivable against FY 2008-09 was Rs. 25,48,73,091/- which means that Rs. 98,78,794/- (rounded of Rs. 98,79,000/-) was the amount receivable from earlier FYs prior to FY 2008-09 which has already been offered as income in the relevant years. We note that the Ld. CIT(A) has rightly noted that the total subsidy due for the year under consideration (AY 2009-10) was Rs. 50,70,29,057/- which has been shown in the P&L Account under the head 'other receipts'. The Ld. CIT(A) has rightly noted that Rs. 2647.52 lacs is not the subsidy received. Subsidy due at the beginning of the year was Rs. 29,89,97,877/- out of which Rs. 28,91,19,093/- was received. Hence, the balance was ....
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.... view that incurring of the expenses by the Assessee cannot be disputed and in fact has not been disputed by the revenue. There appears to be only a dispute with regard to the evidence of incurring of the expenses. The details to which our attention was drawn by the learned counsel for the assessee, in our view, requires to be verified by the AO. We therefore set aside the order of the CIT(A) on this issue and remand the question of incurring of these expenses to the AO for fresh consideration, with liberty to the Assessee to let in evidence to substantiate its claim for deduction of the aforesaid expenditure. For statistical purposes the relevant grounds of appeal are treated as allowed." 11. Since the Tribunal has set aside the order or the Ld. CIT(A) and remanded the question of incurring these expenses to the AO for fresh consideration with the liberty to assessee to adduce evidence to substantiate its claim for deduction of the aforesaid expenditure, we also set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO to be decided afresh as ordered in AY 2003-04 to 2005-06. This ground of appeal of revenue is allowed for statistical purposes." 12. Sin....
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....income of the assessee. On appeal, the Ld. CIT(A) has restricted the disallowance at 50% of the claim. Aggrieved, the revenue as well as the assessee is before us. 14. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the donations were given to local clubs as well as to Ram Krishna Mission and Bharat Sevasram Sangha , which has been disallowed by AO. On appeal the Ld CIT(A) gave partial relief by allowing 50% of the expenditure claimed as donation. Against the said action of Ld CIT(A) both parties are before us. We note that on similar issue of expenditure claim in respect of donation given to the local clubs during Durga Puja etc. was before the Hon'ble Calcutta High Court in CIT Vs. Bata India Ltd. 201 ITR 884 (Cal) wherein it was held to be an allowable expense. However, we find that even though the assessee in its reply has stated that certain donations were given to the local clubs etc. the amount given as donation to the local clubs are not discernible from the materials placed before us, so it has to be verified by the AO and the AO to allow 100% deduction on the claim of expenditure in respect of donations given by the....
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....carry out welfare activities. We note that the assessee expended CSR expenses of Rs. 9.11 cr. However, the AO has disallowed 50% of the expenditure and made an addition of Rs. 4,55,50,000/- being 50% of the expenses on account of CSR. The AO has disallowed the claim on the ground that the assessee did not file ledger copy of the expenses booked under the CSR. According to the AO, in the absence of date wise expenses with detail narration, the expenses remained unverifiable and as such resorted to estimated disallowance of 50% of such expenses. According to the Ld. AR, the books of the assessee are audited by different auditors as well as the CAG. It was pointed out by the assessee that contributions made with the proper approval of the competent authority to develop proper educational infrastructure not only for the children of the workmen of the company but also for the benefit of public at large. This expenditure are made partly as staff welfare expenditure and partly as social cause as per its commitment to the society in the form of CSR activities which the assessee is duty bound to oblige as per the Companies Act, 1956. We note that the assessee is a Public Sector Undertaking ....
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....ted by the provision of such basic amenities mainly comprised of the workers of the assessee-company and their families. He also appears to have overlooked the fact that such basic amenities could not have been provided to the assessee's employees in isolation as the said expenditure in any case had to be incurred for the entire area as a whole. Before us, learned counsel for the assessee has contended that over 90 per cent of the population residing in that area constituted assessee's own workers and their families and it appears from the record that this fact has not been disputed by the Revenue at any stage. Moreover, in the absence of such facilities in that area, it would not have been possible for the assessee-company to get the proper work force for its operation without which it was not possible to carry on its business effectively and efficiently. The labour by itself is an important input for any type of business, more particularly for the business of the assessee company of mining operation and, therefore, the expenditure incurred mainly for the welfare of the labour force has to be treated as incurred wholly and exclusively for the purpose of its business. It is....
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....on to a primary health center building located near its mill and despite the fact that the said primary health center was meant for the benefit of public at large, the Orissa High Court allowed the said expenditure as a business expenditure considering that the same was going to result in providing treatment to the ailing workmen of the assessee also and the assessee was under an obligation to provide such benefits. In the present case, although there is nothing on record to show that such an obligation was there on the assessee-company, the incurring of such expenditure was very much warranted from the point of view of business expediency, as already mentioned. In the case of Sanghameshwar Coffee Estates Ltd. v. State of Karnataka [1986] 160 ITR 203 (Karn), the expenditure incurred by the assessee towards salary paid to the teachers of the school was held undoubtedly to be in the interest of the children of its employees and the same being a welfare measure, was allowed as business expenditure. In the case of ITAT v. B Hill and Co. (P) Ltd. [1983] 142 ITR 185 (All), the expenditure incurred on donations made to the schools with a view to provide educational facilities to the labou....