2012 (10) TMI 1285

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....during the year under consideration. 2. On the facts and circumstances of the case, whether the CIT(A) was correct in allowing relief even though the activity of mine closure had not been carried out and the provision for mine closure expenses was only an estimate. 2. The brief facts of the case are that the assessee claimed a sum of Rs.48,43,384/- for accrued liabilities towards the closure of mines. The assessing officer disallowed the same. The assessee went in appeal before the CIT(A). The CIT(A) deleted the disallowance by observing as under: "8. I have considered the issue carefully in the light of the facts as emerging from the assessment order and as per the submissions of the appellant. The appellant was asked ....

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....on that mine closure expenses at Rs.48,43,384/- should be allowed to the assessee. Besides the above facts of the case, the appellant has also submitted that similar provisions was made for Assessment year 2005-06 for the total amount of Rs.51,77,998/-. The learned Commissioner of Income Tax (Appeals)-I vide her order dated 14.11.2007 in appeal no.CIT(A)-I/1207/2006-07 has allowed the appeal in favour of assessee and held as under: "Thus in the light of above discussion and the case laws (cited supra) I am of the considered opinion that the mine closure of Rs.51,77,998/- should be allowed to the Assessee. The appeal contents is accepted and additions of aforesaid amount is deleted and the ground no.2 and 3 are allowed." ....

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.... and addition of aforesaid amount of Rs.48,43,384/- is hereby deleted." 3. Ld. D.R. relied on the order of the assessing officer, while the Ld. A.R. reiterated the submissions made before the CIT(A). We have carefully considered the rival submissions along with the order of the tax authorities below. In our opinion, the provision made by the assessee represent the liability accrued in view of rule 23A, 23B & 23C of the Mineral Revision and Development Rules, a copy of which was filed before us. Under these rules, mining company is required to submit progressive mine closure plan and final mine closure plan to the IBM for its approval. An approval from the Regional Controller of Mines is to be obtained in this regard and only there after ....