2021 (12) TMI 727

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....e 'Tribunal' in short) in IT(SS)A No.42/Kol/2015 for the assessment year 2011- 12. The revenue has raised the following substantial questions of law for consideration: (i) Whether on the facts and circumstances of the case the Learned Income Tax Appellate Tribunal, has erred in law in upholding the deletion of addition of Net Present Value of Rs. 12,14,61,050/- and in treating the Net Present Value as revenue expenses whereas true nature is capital expenditure? (ii) Whether on the facts and circumstances of the case the Learned Income Tax Appellate Tribunal, has erred in law in not considering the decision of the Hon'ble Supreme Court of India in the case of Bikaner Gypsum Ltd. vs. CIT reported in [1991] 187 ITR 39 (SC)....

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....e 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 case where the assessee, upon payment of the NPV, obtaind a fresh right to undertake any business. That right of the assessee was covered by the licence previously granted in its favour by the State of Odisha. The NPV payment is a king of a compensation for using forest land for non-forest purpose pursuant to an order of the Supreme Court. The payment of t....