TaxTMI 
TaxTMI 
2019 (1) TMI 1974
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appeals are, allowability of additional depreciation u/s 32(1)(iia) of the Act, allowability of set off brought forward loss and unabsorbed depreciation, allowability of provision of NCWA-VIII and executive ad hoc payments for the Assessment Year 2008-09. For the Assessment Year 2009-10, in addition to the above issues, allowability of expenditure incurred on account of environment and on account of land reclamation, allowability of the grants for sports & recreation, unabsorbed allowance of deduction u/s 35E, disallowance of expenditure on account of donation and allowability of expenditure u/s 40A(9), u/s 40A(3) of the Act arise in the appeal. Other miscellaneous issues, also arise for our adjudication in these appeals. 3. We have heard Shri Arvind Agarwal, the ld. Counsel for the assessee and Shri P. K. Srihari, the ld. CIT-DR, on behalf of the Revenue. On a careful consideration on the facts and circumstances of the case, a perusal of the papers on record, orders of the authorities below and case laws, we hold as follows. 4. We first take up ITA No.916/Kol/2016-17 for the Assessment Year 2008-09. Ground Nos.1 & 2 of the appeal are on the issue of reopening. The assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(a) In depreciation schedule that under plant and machinery Rs.834,812,000/- and Rs.1,380,039,000/- or claimed as additional depreciation. (b) Additional depreciation is claimed excluding "tele-communication tools & equipments and Railway siding" at 20% for assets acquired prior to October 08 and 10% for others. (c) Full details establishing Assessing Officer to come to a firm conclusion as to whether the stiff conditions are met for claiming additional depreciation is not furnished. Furnishing of details will only help Assessing Officer to come to a conclusion. 17. Allowance of additional depreciation is a matter to be decided based on each asset acquired. Decision depends on whether it is new (condition in proviso to section 32(1)(iia) also is to be applied) and goes into 'manufacture or production' of "article or thing" are to be established with hard documents. There are not brought to record. The additional depreciation is also a business expense and the onus is on assessee to prove before Assessing Officer the eligibility as prescribed in law. This clearly is not discharged here. Therefore Assessing Officer is correct in exercising best of judgment.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts which gave all the required particulars before the Assessing Officer. We direct the assessee to once again produce all the details as required by the Assessing Officer in support of his claim for deduction of additional depreciation. The additional depreciation should be granted on such plant and machinery that have been used for the production of coal. The Assessing Officer should keep in mind that the assessee is a public sector undertaking and its accounts are audited by the Comptroller & Auditor General of India and such audited statements have evidentiary value. 4.5 In the result, this ground of the assessee is allowed for statistical purposes. 5. Now, we adjudicate ITA No.999/Kol/2017 Revenue's appeal for Assessment Year 2008-09. Ground No.1 is on the issue of ground of allowability of additional depreciation. Consistent with the view taken by the assessee's appeal, we restore the issue to the file of the Assessing Officer. This ground is treated as allowed for statistical purposes. 5.1 Ground No.2 is on the allowability of provision of NCWA-VIII and executives ad hoc payments. The ld. CIT(A) at Page 11-12 Para 4.4 of his order had followed the decision of the ITA....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee." Respectfully following the above decision of Hon'ble' ITAT, Nagpur Bench, I direct the A.O to delete the addition of Rs. 388,58,34,000/-. Thus ground No. 5 & 6 are allowed." 5.2 As the nomenclature used was "provision", the Assessing Officer was of the view that the liability in question is not crystallized. The assessee produced wage agreement arrived at with the unions in support of the claim that the liability in question is a crystallized liability. 5.3 The issue in question is covered by the decision of the Nagpur Bench of the Tribunal in the case of Western Coalfield Ltd.(supra). Interim relief @15% of the basic wage affected from 1st July 2008 had been made from the month of April, 2008. The communication of this effect was received from Coal India Ltd. on 16.04.2008. The interim relief to employees is covered under National Coal Wage Agreement. Thus, we find no infirmity in the order of the ld. CIT(A). 5.4 In the result, this ground of the Revenue is dismissed. 6. In the result, the appeal of the Revenue and assessee are allowed in part. 7. Now, we adjudicate ITA No.1010/Kol/2015 assessee's appeal for Assessment Year 2009-10. Gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... if any, carried forward will not comprise unclaimed deduction u/s 35(4) of current year..." 10.2. We find no infirmity in this order of the ld. First Appellate Authority. The assessee should not have any grievance and the Assessing Officer is duty bound to consider the claim of the assessee for carry forward of deduction, as per Section 35(4) of the Act, in the existing Assessment Years. Accordingly, this ground of the assessee is dismissed." 7.7 Consistent with the view taken therein, we set aside the matter to the file of the Assessing Officer passing orders in accordance with this order of the Tribunal on this issue. 7.8 In the result, this ground is allowed for statistical purposes. 7.9 Ground No.5 is on the disallowance of Rs.19,17,000/- paid on account of donation. 7.10 This Bench of the Tribunal considered a similar issue in the assessee's own case in ITA Nos.462 to 464/Kol/2009 Assessment Year 2003-04 to 2005-06. The assessee's contention is that, the expenditure in question was incurred in terms of the National Coal Wage Agreement under sub-title, Education Facility and Workers Education. This is not a donation per se, but an obligation imposed on the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tified in confirming the disallowance made, by the Assessing Officer on this count, His impugned order on this issue is, therefore, reversed and the Assessing Officer is directed to allow the said expenditure." 48. The aforesaid observations of the Nagpur Bench cover every type of expenditure whether it be the reimbursement of tuition fee to the students or grants to the various institutions running the schools. The Nagpur Bench has noted as a fact that the contributions to the various schools were not incurred voluntarily, but the same was incurred to discharge the obligation, which fell on the assessee in terms of a National Coal Wage Agreement entered into with the employees' unions and such an agreement was enforceable under the law both under the Indian Contract Act as also the industrial Disputes Act. Following the decision of the Nagpur Bench of the Tribunal (supra) we set aside the order passed by the Commissioner of Income tax under section 263 and restore that of the assessing officer wherein the claim already stands allowed." 7.11 Consistent with the view taken therein, we allow the claim of the assessee. 7.12 In the result, the appeal of the assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agement, Ranchi and a Training Institute run by Coal India Limited for the purpose of training of the executives of the appellant company and other subsidiaries of Coal India Limited by invoking the provision of section 40A(9)." 8. The assessee's claim for deduction on account of payment made to IICM was rejected by the Revenue authorities for the following reasons: "Ground No.2: IICM Contribution: A.Y 2003-04 Rs.1,35,87,000/- A.Y 2005-06 Rs.1,50,00,000/- On verification it was found by the A.O that miscellaneous expenses included IICM contribution as above for the A.Y 2003-04 and A.Y 2005-06. No submissions/clarification was found by the A.O on record on this point whereas it had been the practice of the assessee as per previous year's record to make a note on the relevant items of Audit Report in Form 3CD that IICM contribution is the sum paid by the assessee as an employer which was not allowable u/s 40A(9). It was not ascertainable as to how and under what circumstances it was not ascertainable as to whether claiming of such expenses was incidental to the business activities carried on by the assessee or not as per relevant provision of....