TaxTMI 
TaxTMI 
2025 (12) TMI 51
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....inafter referred to as "CIT(A)"), National Faceless Appeal Centre (hereinafter referred to as "NFAC"), Delhi dated 07.03.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and relates to Assessment Year (A.Y.) 2015-16. 2. At the outset, Ld. Counsel for the assessee pointed out that the issue raised by the assessee in his cross objection was squarely covered in favour of the assessee and so also department's appeal needed to be rejected being covered by the order passed by the ITAT in the case of the assessee itself in A.Y. 2013-14 vide order in ITA No.1880/Ahd/2019, dated 19.10.2022. Copy of the order was placed before us. 3. Having said so, our attention was drawn to the facts of the case....
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.... of holding such funds in the escrow account, the same could not be said as revenue expenditure, but was in fact a capital expenditure. I don't agree with the contention of the AO The assessee has correctly disallowed provision made for Mine closing expenses. However actual expenses incurred and paid by the assessee on this head has to be allowed u/s 43. The mode of holding such funds in an escrow account cannot be the determining factor in deciding such expenditure as Capital in nature. This expenditure when made on actual basis is clearly revenue in nature. AO is directed to delete this addition. As far as other submissions made regarding allowability of entire expenditure of Rs. 80,10,05,553/-, is concerned, this is a withou....
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....l for the assessee pointed out that in the preceding year identical disallowance of claim of mine closure expenses u/s 43B of the Act by the AO was confirmed by the Ld.CIT(A) and the assessee had carried the matter in appeal before the ITAT where during the course of hearing, an additional /alternate plea of allowance of provision created for mine closure was raised. He pointed out that while the ITAT confirmed the disallowance of claim u/s 43B of the Act, however the alternate plea of provision for mine expenses claimed was allowed. He contended therefore that the issues raised in the present appeal of the Revenue and the CO of the assessee were squarely covered by the order of the ITAT in the case of the assessee in the preceding year. ....
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....es of the Ministry of Coal. The issue of ascertaining the said provision is covered in favour of the assessee by the decision of the Hon'ble Rajasthan High Court in case of Rajasthan state Mines and Mineral Ltd. (supra) as per the contentions of the Ld. AR. But the observation of the CIT(A) that the said Mining Closure Funds is not in the nature of tax, duty, cess, fee etc. as per Section 43B, appears to be justifiable as the guideline of Ministry of Coal has given the procedure and time period for the closure expenses to be incurred by the coal mine owners who are operating coal mines without the approval of any Mine Closure Plan. Thus, Section 43B claim is not applicable in assessee's case. Thus, the CIT(A) was right in the said context. ....
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.... the Act. 11. Copy of the Circular issued by the Government of India, Ministry of Coal dt 11th January 2012 containing Guidelines for preparation of Mine Closure Plan placed at P.B 256-266 was also perused which corroborated assesses explanation that being in the business of mining, it was required to prepare a Mine Closure Plan ('MCP') and get the same approved within the stipulated time from the Ministry of Coal. Such MCPs had two components; i.e. (i) Progressive or Concurrent Mine closure Plan and (ii) Final Mine Closure Plan. Progressive MCP included various land use activities to be done continuously during the entire period of mining. On the other hand, the final MCP would start around the end of mine life and continue till the are....