TaxTMI 
TaxTMI 
2026 (3) TMI 1104
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....hort referred to as "CIT(A)"), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year 2017-18. 2. Brief facts of the case is that the assessee is a company engaged in the business of Mining and Power Generation. For the Asst. Year 2017-18, assessee filed its Return of Income on 27-10-2017 declaring total income of Rs. 208,50,39,720/- (Income declared u/s. 115JB of Rs. 436,58,77,612/-). The return was taken for scrutiny assessment. The assessee earned dividend income of Rs. 6,30,66,949/- and debited expenses of Rs. 66,96,863/- in the Profit and Loss account for earning exempt income. The assessing officer found that this expenses is....
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....f Rs. 2,59,24,567/- made by the A.O. was directed to be deleted. In support of the same, Ld. CIT(A) relied upon Hon'ble Gujarat High Court judgment in the case of CIT vs. Corrtech Energy Pvt. Ltd. 45 taxmann.com 116 and Special Bench decision in the case of ACIT vs. Vireet Investments Pvt. Ltd. 165 ITD 27 (Del) (SB). 4. Regarding the Additional Ground of Mine Closure expenses u/s. 37(1) of the Act. The assessee sought deduction of Rs. 62,91,01,252/- on account of Mine Closure Expense under Section 37(1) of the Act. This claim represents the net amount derived from the provision made during the year (Rs. 65,05,59,333/-) after reducing the provision from earlier years paid during the current year (Rs. 2,14,58,081/-). This claim was based o....
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....s. 2,59,24,567/-, without appreciating the fact that the AO, after proper satisfaction and detailed reasoning in the assessment order, had correctly computed the disallowance as per Rule 8D(2)(ii) and (iii) at Rs. 2,59,24,567/- strict conformity with the provisions of the Act and judicial precedents applicable at the time?" 2." Whether the Ld. CIT(A) has erred in law and on facts in allowing the additional depreciation on re-adjusted WDV (Civil Work of Wind Mill) of Rs. 45,21,271/- without appreciating the fact that depreciation on the Civil Work of the Windmill which was disallowed/restricted in earlier years after due examination, cannot be reversed artificially enhancing the W.D.V. in the current year which is Impermissible in l....
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....nd perused the materials available on record. The Jurisdictional High Court in the case of Corrtech Energy Pvt. Ltd. (cited supra) held that disallowance u/s. 14A r.w.r. 8D be restricted only to the expenditure in relation to the investments that yielded exempt income. It is undisputed fact that the assessee earned dividend income on the investment of Rs. 66,96,86,308/- and not earned dividend on the remaining investment of Rs. 327,15,92,473/-. Further the assessee suo moto disallowed Rs. 66,96,863/- u/s. 14A of the Act which representing the average value of investments on which dividend income was actually received, which also exceeds the maximum permissible disallowance of Rs. 33,48,431/- as per Rule 8D(2)(iii) being 0.5% of average yiel....
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....cision therefore it does not require any interference. For ready reference the finding of the Tribunal is reproduced as follows: "7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee company made provision in Mining Closure Fund as per the guidelines issued by the Ministry of Coal which is mandatory to each mining company. It is not disputed fact that the assessee made claim u/s 43B every year as and when the actual expenditure is made. The department in the past has accepted this position. The said provision is mandatory and the assessee has made the said provision in books of accounts following the guidelines of the Ministry of Coal. The issue of as....
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....e as the requirement of the Mine owners, the same should be allowed as expenses. Thus, appeal of the assessee is partly allowed." 10.1. Ld. Counsel also placed on record the subsequent decision passed by the Co-ordinate Bench of this Tribunal in assessee's own case in ITA No. 938/Ahd/2024 dated 07/08/2025 relating to the Asst. Year 2015-16, wherein it followed the earlier year order of the Tribunal and held as follows: "15. It is evident that in the impugned year also the assessee had claimed mine closure expenses deposited in escrow account as per MCP approved in its Profit and Loss account and added back the same while computing its income for the year. Nature of the same being by way of provision for final expenses to be incu....