2018 (6) TMI 1789

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.... Subash Agarwal, Mr. Brijesh Kr. Singh, Mr. Pranit Bag. The Court :- The legal issue that the Revenue seeks to assert is as to whether the payment of the net present value by an assessee engaged in mining for use of forest land for mining purpose would be a capital expenditure or a revenue expenditure. It is not in dispute that pursuant to a lease for mining manganese ore in village Konthar-....

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.... observed that the assessee did not get any fresh right to mining by making the payment of the NPV in terms of the Supreme Court order; it was only that if the payment had not been made, the assessee would have been liable to be hauled up for contempt or have its mining operations stopped. Both the Commissioner (Appeals) and the Appellate Tribunal have referred to a judgment reported at 107 ITR....

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....nce the assessee was entitled to carry on mining operations and such payment had been made for the removal of the difficulty in the assessee carrying on its business in accordance with its licence, the expenditure had to be regarded as a revenue expenditure and could not be treated as a capital expense. The dictum in Bikaner Gypsums Ltd. is squarely applicable in the present case. This is not a....

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....ce fee was found to be a capital expenditure. However, as is evident from paragraph 11 of the report, the fee was paid for obtaining a prospecting licence and it was such fee that entitled the business to be conducted in the relevant area. The distinction between the judgment in R.B. Seth Moolchand Sugachand and the judgment in Bikanker Gypsums Ltd is that in Bikaner Gypsums Ltd there was a pre-ex....