TaxTMI 
TaxTMI 
2026 (9) TMI 909
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.... dealt on merits. Assessee approached the Hon'ble High Court and the Hon'ble High Court of Bombay at Goa in Misc. Civil Application No.133 of 2026 in Tax Appeal No.23/2024 judgment dated 11.03.2026 has remanded the matter to the ITAT, Panaji Bench with a direction to adjudicate the matters on merits. Relevant observation of the Hon'ble High Court reads as under : "1. The appeals filed by the Revenue, having been admitted, are listed for hearing. The respective counsel representing the respondents/Assessee submit that they are ready to be relegated to the ITAT and are agreeable to the fact that the appeals can be decided by the Tribunal on its merits. 2. Ms Amira Razaq, appearing for the Revenue, expresses her consent for remanding the matter but would submit that the appeals shall be decided on merits by keeping the rights and contentions of the respective parties open. 3. The respective counsel representing the Assessee are, however, agreeable to have the appeals heard on merits as the Tribunal had merely pronounced upon the technical aspect of the matter. 4. In the wake of the aforesaid statement, the respective ITAT appeals are remanded back t....
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....e have considered the rival submissions. Admittedly, after the concept of block of assets for the purpose of depreciation, if any part of the plant and machinery falling within the block is put to use during the relevant assessment year, then, the depreciation becomes eligible for the said block of assets. Admittedly, the dry plant of Tudou division has been put to use during the relevant assessment year. It is only the wet process which had been temporarily shut down in view of the order of the Forest Department. The dry plant having been used during the relevant assessment year and as the plant and machinery falls within the block of assets, the Assessee would be entitled to depreciation in respect of the said block of assets. In these circumstances, the AO is directed to grant the Assessee depreciation in respect of the Tudou plant as claimed. In the result, ground nos. 3.1 to 3.4 of the Assessee's appeal stands allowed." 10. Ld.CIT(A) has deleted the said disallowance following the order of Tribunal. We also find that in assessee's case for A.Y. 2008-09, ld.CIT(A) has decided this issue in favour of assessee. We therefore following the rule of consistency affirm the finding ....
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....terest included in clause (1) incurred during the previous year; B=the average of value of investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year: C= the average of total assets as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year, (iii) an amount equal to one-half per cent of the average of the value of investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year?" 14. As per the above rules, ld. Assessing Officer has calculated the disallowance mainly for the interest expenditure under Ruyle 8D(2)(ii) and indirect expenses incurred for earning the exempt income under Rule 8D(2)(iii) of the Act. 15. So far as the interest disallowance u/s. 14A r.w.Rule 8D(2)(ii) is concerned, the assessee has commonly contended that interest expenditure was incurred for borrowings taken for specific business purposes such as acquisition of ships, mines and....
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....O is accordingly directed to re-compute the disallowance by not making any addition on account of interest on borrowed funds. 7. The next ground of appeal relates to disallowance of expenditure u/s 14A. The Assessing Officer has disallowed the expenditure @ 0.5% of average cost of investments which works out to Rs. 3,65,53,397/-. According to the appellant they have not incurred any expenditure on making or selling investments. It is not possible to accept that there will be no cost involved in relation to the investments and accordingly some expenditure has to be attributed to the income which does or will not form part of the total income. However since Rule 8D(iii) directs the disallowance at 0.5% of average value of investments, such average value has to be determined in a scientific method considering all facts and circumstances of the case. 8. It is argued by the appellant that some of the investments are made in Group Companies and other companies where once the investments are made there is no further effort to be put in by the appellant and hence these will invite no expenditure whatsoever and whereas every year there will be disallowance of 0.5% of the v....
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....s are not involved in the transactions relating to investments. Therefore according to the appellant only the administrative expenses relating to administration department of the head office of the appellant should be the limit for disallowance. I see merit in this argument. The Assessing Officer is directed to restrict the disallowance to the administrative expenses at the head office of the appellant and also to the actual exempt income earned by the appellant. 14. The appellant has argued that overall disallowance cannot exceed the amount of dividend income. I agree to the contention of the appellant and direct the Assessing Officer to restrict the disallowance as worked out after taking into account the aforesaid directions to the dividend income earned during the relevant previous year." 19. So far as disallowance u/s. 14A read with Rule 8D(2)(ii) is concerned, we fail to find any inconsistency in the finding of ld.CIT(A) holding that since the assessee had sufficient interest free funds for all the years under consideration which are more than the alleged investments appearing in the balance sheet, therefore in light of settled judicial precents including that jud....
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....d in (2026) 183 taxmann.com 164, Deputy Commissioner of Income-tax vs. SP Port Maintenance (P.) Ltd. (2024) 164 taxmann.com 752 (Mumbai - Trib.), Aker Powergas (P.) Ltd. vs. ACIT (2016) 70 taxmann.com 11. Thus, no interference is called for in the finding of ld.CIT(A) for the impugned assessment years. Respective grounds of appeal raised by the Revenue and cross objection grounds raised by the assessee on this issue of disallowance u/s. 14A of the Act for A.Yrs. 2009-10 to A.Y. 2014-15 are dismissed. 22. Next common issue Raised by the Revenue is against the disallowance of Demurrage expenses u/s. 40(a)(ia) of the Act. 23. Relevant facts concerning this issue are that the assessee who is engaged in export of iron ore has entered into sale contracts with foreign buyers for the supply of iron ore on an FOB basis. Under the terms of said contracts, the assessee guarantees the buyers a specified loading rate per day/hour. In cases where the assessee loads the ore at a rate faster than the agreed loading rate, the assessee becomes entitled to a bonus, referred to in the contract as "dispatch money". However, if the assessee loads a quantity lower than the minimum guaranteed rate, ....
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....ee and the buyer for the purchase and sale of iron ore on an FOB basis. The dispatch money and demurrage are merely adjustments to the agreed sale consideration between the parties. Since the transaction in question relates to export of iron ore and the payment towards demurrage effectively represents a reduction in the sale consideration, in our considered view, the assessee is not under any obligation to deduct tax at source on the amount remitted to the buyer towards demurrage. Further, the ship owner recovers freight directly from the buyer, who also independently settles any demurrage liability with the shipowner. The demurrage payable to the ship owner is not borne by the assessee but by the buyer and therefore there is no liability to deduct tax at source on the assessee which does not call for any disallowance u/a.40(a)(ia) of the Act. 25. We further find that in the preceding assessment year 2008-09 in assessee's case, Coordinate Bench in ITA No153/PNJ/2017 order dated 13.11.2018 has decided this issue in favour of the assessee placing reliance on the judgment of Hon'ble Jurisdictional High Court in the case of V.S. Dempo and Co. (P) Ltd. (supra). Following the decision....
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....for purchase of capital goods. However, the assesee successfully demonstrated that the parties involved were suppliers of spares and services and not suppliers of capital goods. We further find that finding of ld.CIT(A) is also supported by the fact that in assessee's own case for A.Y. 2008-09 ld.CIT(A) vide order dated 17.02.2017 has observed that advances have been given in the normal course of business and therefore allowable as business loss. This finding of ld.CIT(A) has not been challenged by the Revenue authorities before this Tribunal. Similar was the case for A.Y. 2010-11 where also similar type of disallowance of advances given to Shirish Steel supplier was also deleted by ld.CIT(A) observing that it is not a capital expenditure and is to be allowed as deduction and has not been challenged by the Department before this Tribunal. In view of the above, we fail to find any infirmity in the finding of ld.CIT(A) deleting the disallowance of business advances written off for A.Y. 2009-10 and A.Y. 2011-12. Respective grounds of appeal raised by the Revenue are dismissed. 29. The next common issue for our consideration is the disallowance of contribution to Goa Infrastructure ....
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....s one of the principal beneficiaries. Such a social obligation demanded by the local community cannot be overlooked by the assessee and such expenditure should be treated as expenditure incurred for the purpose of carrying on its business. The assessee is not owning an asset or property in that way. Therefore, the assessee cannot account the expenditure by way of capital expenditure in its books of account. We, therefore, direct the assessing authority to give deduction for the said amount of expenditure. This ground is, accordingly, allowed." 32. The above finding of the Tribunal has not been challenged by the Department before the Hon'ble High Court. Similar view was taken up by this Tribunal for A.Y. 2008-09 in assessee's own case in ITA No.153/PNJ/2017 order dated 13.11.2018. We therefore in absence of any change in the facts and circumstances and taking consistent view we fail to find any inconsistency in the finding of ld.CIT(A) deleting the disallowance of contribution to GIDC. Grounds of appeal raised by the Revenue on this issue for A.Yrs. 2010-11, 2011-12 and 2012-13 are dismissed. 33. The next common issue relates to disallowance of higher education and training ex....
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.... in brief are that the assessee incurred expenditure towards construction in local villages and the Institute of Maritime studies for maintaining cordial relations with villagers and ensuring smooth conduct of business operations. No capital asset came into existence in the hands of assessee and the temples/community structures were situated on public land not owned by the assessee. Ld. Assessing Officer held it to be a donation/contribution to the local public land and institutes not having any direct business and commercial expediency. However, ld.CIT(A) deleted the addition observing that the alleged expenditure have been incurred as part of social responsibility and for maintaining cordial relation in areas surrounding the business establishment. Aggrieved Revenue is now in appeal before this Tribunal placing reliance on the order of the Assessing Officer and ld. Counsel for the assessee on the finding of ld.CIT(A). 38. We have considered the rival arguments made by both the sides and perused the record. We observe that the assessee has incurred expenditure for construction and repair of temples and contribution to Institute of Maritime studies where its business establishme....
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....pra) and has held that the alleged expenditure is for commercial expediency and should not treated as capital in nature. Similarly in assessee's own case for A.Y. 2009-10 and A.Y. 2011-12 ld.CIT(A) has deleted similar type of disallowance and no further appeal has been filed by the Revenue before this Tribunal. In view of the above and taking consistent view, we affirm the finding of ld.CIT(A). Ground No.5 raised by the Revenue for A.Y. 2010-11 is dismissed. 43. Ground No.8 raised by the Revenue for A.Y. 2010-11 is against the deletion of disallowance u/s. 40(a) of the Act at Rs. 5,10,89,201/- incurred towards consultation and other charges paid without deduction of tax at source. 44. Facts relating to this issue are that the assessee paid alleged sum as consultation charges to parties located outside India contending that the services were rendered outside and that non-resident parties did not have Permanent Establishment (PE) in India therefore the income did not accrue or arise in India and no TDS was deductible u/s. 195 of the Act. Further, during the course of assessment proceedings, assessee has relied upon the provisions of respective Double Taxation Avoidance Agreemen....
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....ational Ship Building Associations, licensing charges and incidental services which are claimed to be not qualifying for Fees for Technical services. Further, the DTAA protection is available to the assessee as the income from the payment made to non-resident parties was not chargeable to tax in India. Further, the observation of the Assessing Officer that assessee should have obtained the certificate u/s. 195(2) and 195(3) is not relevant since the assessee had no liability to deduct the tax at source on the law prevailing at the relevant point of time. Under these facts and circumstance and the judicial precedents referred supra and that the amendment being made retrospective and on the date of payment the assessee was not liable to deduct tax at source, we fail to find any infirmity in the finding of ld.CIT(A) and thus ground No.8 raised by the Revenue is dismissed. 46. Ground No.9 raised by the Revenue for A.Y. 2010-11 is against the deletion of disallowance for obsolete stock written off. 47. Facts in brief are that the assessee is engaged in the Ship Building Division and a 100% Export Oriented Unit engaged in the manufacture of various materials such as steel plates, p....
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....at the kind of business which the assessee is engaged into manufacture of vessels, various items of inventory are lying at various places and some time on physical verification many items are not found. We note that even though there is no specific observation by the Assessing Officer about the sale of the stock written off as scrap but then sale of scrap is a routine part of the company which is carried out on time to time basis. However, various items in the inventory which are obsolete and unusable are required to be removed out of the inventory for proper and fair accounting purposes. Such writing off of the inventory is purely revenue in nature. Hon'ble Jurisdictional High Court in the case of CIT Vs. Gigabyte Technology (India) Ltd. 421 ITR 21 (Bom.) has held that obsolete stock written off are allowable as business expenditure even though the stock was not actually sold or disposed of. Similarly, in the case of CIT Vs. Heredialla Chemicals Pvt. Ltd. 216 ITR 742 (Bom.) has held that once the inventory had become commercially obsolete and unusable, deduction could not be denied merely because physical disposal had not taken place. 50. Considering the judicial precedents and....
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.... of a new ship but amounted, in substance, to current repairs to the existing ship. These findings have not been challenged before us by the revenue. The fact that old parts of the ship were replaced by new parts, in our opinion, is not relevant for determining whether the expenditure was on 'current repairs' or not. The replacement of the old parts by new parts does not mean that a new asset was brought into existence in relation to the ship in question. The replacement of the parts was only in the process of current repairs of the ship. The expenditure claimed in this case, therefore, amounts to 'current repairs' which is allowable as a deduction under section 31. 12. In view of the above, we answer question No. 1 in the affirmative and in favour of the assessee." 54. Since the very same issue has been examined by the Hon'ble High Court in assessee's own case, we therefore respectfully following the same fail to find any infirmity in the finding of ld.CIT(A). Ground No.10 raised by the Revenue is dismissed. 55. Now we move on to adjudicate cross appeal ITA No.36/PAN/2020 wherein the assessee has raised solitary issue in Ground No.1 and Additional Gr....
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....e to cross examine M/s Trimurti Exports and also observed that no evidence with the seized document represent transportation expenses. The addition made by the Assessing Officer at Rs. 1.43 crore and alleged cash payment made to M/s Trimurti Exports was subsequently challenged by the assessee before ld.CIT(A) but in absence of any evidence establishing that cash reflected in the seized papers represents funds kept for transportation expenses, ld.CIT(A) sustained the addition made by the Assessing Officer. 57. Aggrieved assessee is now in appeal before this Tribunal. 58. Ld. Counsel for the assessee submitted that Department has adopted incorrect factual premise. There is no purchase of iron ore by the assessee against the cash consideration. Since the assessee has not made any purchases in cash, the amount reflected in the seized document reflects transportation expenditure and the cash payments if any were made to the transporters and not to the assessee and therefore the addition cannot be made in the hands of assessee. Further, reliance made to the decision of Tribunal in the case of M/s. Trimurti Exports in ITA No. 5/PNJ/2015 order dated 10.08.2015 deleting the said addit....
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....l in the case of M/s. Trimurti Exports deleting the addition in the hands of M/s. Trimurti Exports for the very same transaction, we find that since the Revenue has failed to establish any unaccounted transaction, therefore, the impugned addition deserves to be deleted. Additional ground No.1 and Ground No.1 raised by the assessee are allowed. 62. The next common issue raised by the assessee in the Cross Objections for A.Yrs. 2010-11 to 2014-15 relates to disallowance of depreciation claimed on commercial vehicles. 63. Facts in brief are that assessee purchased motor cars during 01.04.2009 to 30.09.2009 and claimed depreciation at 50% on the Light Motor Vehicles claiming them to be covered under commercial vehicles. However, ld. Assessing observed that motor cars fall under a separate category other than commercial vehicles and that the assessee's cars qualify as "Maxi-cab/Motor-cab" and therefore are excluded from the definition of "commercial vehicle." Similar view has been taken by ld.CIT(A). Now the assessee has raised cross objections assailing the orders of ld.CIT(A). 64. We have heard the rival submissions and perused the record. We find that the issue for our c....
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....ssessee carried the matter before ld.CIT(A) who not only observed that once an asset is accepted and forms part of particular block of assets u/s. 32,the block continues to retain its identity and since the depreciation at the rate of 80% has been granted to the assessee in earlier years, the depreciation rate applicable to that block cannot be disputed in subsequent years. Aggrieved revenue is in appeal before this Tribunal. 68. We have heard the rival submissions and perused the record. We find that assessee has claimed depreciation @80% for the energy saving devices as per the block of asset created in the preceeding years and the same has been accepted by the Department and for the year under consideration depreciation has been claimed at @80% on the written down value (WDV) of the block of assets falling in the category of 80% rate of depreciation. We take note of the definition of plant and machinery in the Direct Tax Ready Reckoner where the following assets are eligible for depreciation @80% : "Plant and machinery - Energy saving devices, renewal energy devices, rollers in flour mills, sugar works, steel industry, wind mills, electric generators/pumps running on....
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....ase deeds and produce such stamp papers or papers in which stamp duty is paid so as to facilitate this office in execution of lease deed without any further delay. Assessee paid the said sum and claimed it as revenue expenditure. However, during the course of assessment proceedings, ld. Assessing Officer while examining this issue observed that the mining leasehold rights constitute a capital asset within the meaning of section 2(14) of the Act and such mining lease include the rights to explore land, extract minerals, construct infrastructure and transfer leasehold rights. Thus, the claim of payment of stamp duty of Rs. 35.03 crore as revenue expenditure was denied and ld. Assessing Officer held the same to be capitalised. 72. Aggrieved assessee preferred appeal before ld.CIT(A) and filed detailed written submissions. Ld.CIT(A) referred to CBDT Instruction No.002 of 1943 providing that legal expenses incurred in connection with renewal of lease for a period of less than 50 years are allowable as revenue expenditure. Further, ld.CIT(A) noted the fact that payment was not made to the Government towards lease premium for mining rights but was paid as stamp duty on execution of doc....
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.... existence pursuant to payment of stamp duty and therefore the expenditure could not be treated as capital expenditure. Reliance is placed on CBDT Circular No. 22 dated 23.06.1943 (enclosed as page no. 9), wherein it has been specifically clarified that legal expenses incurred in connection with renewal of lease for a period less than fifty years are allowable as revenue expenditure. Stamp duty paid for execution of renewal deed forms integral part of legal expenses incurred for renewal of lease and therefore squarely falls within the ambit of the aforesaid Circular. Reliance is placed on the decision of the Hon'ble Andhra Pradesh High Court in CIT v. Panyam Cements & Mineral Industries Ltd. [1997] 228 ITR 212 (AP) (enclosed as page nos. 10 to 11), wherein stamp duty paid for renewal of mining lease was held to be allowable as revenue expenditure. Reliance is further placed on the decision of the Hon'ble Hyderabad Tribunal in JCIT v. NMDC Ltd. [2015] 56 taxmann.com 396 (Hyd. Trib.) (enclosed as page nos. 19 to 37), wherein following Panyam Cements (supra), stamp duty paid for renewal of mining lease was allowed as revenue expenditure. ....
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....cision, the Hon'ble Tribunal has decided issue on the 'doctrine of 'substance over form' and without considering the binding CBDT Circular No. 22 [R DISC. NO. 27(53)-IT/43], dated 23-06-1943 on the income tax authorities, decision of the Hon'ble Jurisdictional High Court in CIT vs. Reliance Industrial Infrastructure Ltd. [2015] 61 taxmann.com 407 (Bombay) which is binding of the Hon'ble Tribunal and direct issue on allowably of stamp duty payment on renewal of mining decided by the Hon'ble AP High Court in CIT vs. Panyam Cements & Mineral Industries Ltd. [1997] 228 ITR 212 (AP) and the Hon'ble Hyderabad Tribunal in NMDC Ltd. vs. JCIT [2015] 56 taxmann.com 396 (Hyderabad - Trib.). It is humbly submitted that the impugned order passed by the Hon'ble Tribunal is contrary to the well-settled principles of judicial discipline and hierarchy, inasmuch as the Tribunal has passed an order against the assessee without considering the binding decisions of the Hon'ble Jurisdictional High Court (Bombay High Court) as well as the Hon'ble Andhra Pradesh High Court, both of which have decided the issue in favour of the assessee. It is a....
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....rine of binding precedent, judicial hierarchy, and the discipline expected of a statutory tribunal. In the present case also, the payment of stamp duty merely facilitated continuation of the Assessee's existing mining business and therefore squarely falls within the ratio of Bikaner Gypsums Ltd. (supra). The same is also evident from the notices dated 14.02.2013 (enclosed as page nos. 1 to 2) and 25.02.2013 (enclosed as page nos. 3 to 8) issued by the Directorate of Mines, Government of Goa. The CIT(A) has rightly appreciated based on documents submitted by the Assessee that the payment was not lease premium or royalty but merely stamp duty payable under the Indian Stamp (Goa Amendment) Act, 2012. The CIT(A) correctly appreciated that stamp duty was payable under statutory mandate and not as consideration for acquisition of mining rights. The CIT(A) has rightly held that the payment was in the nature of "duty" and therefore allowable as deduction. The disallowance made by the AO therefore deserves to be deleted. II. Renewal of Existing Lease does not Result in Acquisition of New Capital Asset or Enduring Advantage T....
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....ficial to the Assessee are binding upon the Revenue authorities. Reliance is placed on several decisions of the Hon'ble Supreme Court (see UCO Bank vs. CIT [1999] 237 ITR 889 (SC)) holding that beneficial Circulars issued by the CBDT are binding on departmental authorities. The CIT(A) has rightly relied upon the aforesaid Circular while deleting the addition. The AO could not have ignored the binding Circular while framing the assessment order. Therefore, the disallowance made contrary to the CBDT Circular deserves to be deleted. IV. Decisions Relied upon by the Assessing Officer are Distinguishable on Facts The AO has wrongly relied upon decisions dealing with acquisition of fresh mining rights or leasehold rights as capital assets. The facts of the present case are materially different since the Assessee was already carrying on mining business under existing lease and only renewal thereof was undertaken. The decisions relied upon by the AO primarily concern: a. acquisition of fresh leasehold rights; b. payment of lease premium; c. transfer of capital asset; or d. initial acquisi....
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....n nature, depreciation u/s, 32 was directed to be allowed. Therefore, without prejudice to the primary claim of revenue deduction, suitable depreciation ought to be granted to the Assessee. In view of the facts of the case, statutory provisions, CBDT Circulars and judicial precedents relied upon hereinabove, it is respectfully prayed that the disallowance of stamp duty paid towards renewal of mining lease amounting to Rs. 35,03,60,000 be deleted and the claim of the Assessee be allowed. Without prejudice, if the expenditure is held to be capital in nature, suitable depreciation u/s. 32 of the Act may kindly be directed to be allowed. ASSESSEE'S CROSS OBJECTION L. CO No.2: Disallowance of 50% depreciation claimed on commercial vehicles: Same as the Assessee's Ground No. 2 in AY 2010-11." 76. We have heard the rival arguments made by both the sides and perused the record. The issue for our consideration is that whether the expenditure incurred on stamp duty paid towards the execution of documents for renewal of mining lease is allowable as revenue expenditure or to be treated as capital expenditure. Assessee has incurre....
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.... 407 (Bombay) has held that stamp duty paid on execution of a lease deed for a period of 30 years incurred for the purpose of carrying on the assessee's business is allowable as revenue expenditure. Similarly in the case of Bikaner Gypsums Ltd. Vs. CIT (1991) 187 ITR 39 (SC) even though not directly in connection with stamp duty the Hon'ble Apex Court held that expenditure incurred for removal of obstruction or disability in carrying on existing business operations is revenue expenditure provided no new asset has come into existence. In the instant case also, it is only at the instance of the Director of Mines, Government of Goa that the assessee had to make payment of stamp duty for renewal of mining lease. 79. So far as the decision referred and relied on by ld. DR in the case of ACIT Vs. Bandekar Brothers (P) Ltd. (2026) 183 taxmann.com 675 (Panaji) is concerned, we note that the decision arrived by this Tribunal is without considering the judgment of Hon'ble Bombay High Court in the case of CIT Vs. Reliance Industrial Infrastructure Ltd. (supra) and the judgment of Hon'ble Andhra Pradesh High Court in the case of CIT Vs. Panyam Cements & Mineral Industries Ltd. (supra). Hon'....
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.... it is rather a legal expense in the nature of stamp duty which was required to be incurred for the execution of documents for renewal of mining lease and is certainly not the amount of mining lease paid for acquiring some rights for future years. The alleged sum is merely a revenue expenditure incurred to continue the business activity of the assessee and the alleged payment is not a lease premium or Royalty but merely stamp duty payable as per the Indian Stamp Goa (Goa Amendment) Act, 2012 under the statutory mandate and not the consideration for acquisition of mining rights. We therefore in light of aforementioned judicial precedents and discussion hold that the expenditure incurred by the assessee towards payment of stamp duty for towards execution of documents for renewal of mining lease is allowable as revenue expenditure. Finding of ld.CIT(A) needs no interference and grounds of appeal raised by the Revenue are dismissed. 81 The next issue raised by the Revenue in Ground No.9 for A.Y. 2014-15 is against the deletion of dumping conversion charges. 82. Facts concerned this issue are that the assessee is engaged in the business of export of iron ore and carried on mining ....
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....od. Ld. CIT(A) also held that the payment is in the nature of a statutory levy/duty imposed by the Government under the notified policy. Ld. CIT(A) further held that the policy nowhere stated that the levy is in nature of penalty and that policy itself clarifies that the charges were levied towards regularization of land used by mining operators and prescribed conversion fees and related charges and thus allowed the claim of the assessee. Now the Revenue is in appeal before this Tribunal relying on the order of the Assessing Officer whereas ld.Counsel for the assessee relied on the order of the ld.CIT(A). 83. We have heard the rival submissions and perused the record placed before us. Revenue is aggrieved with the deletion of disallowance of dumping conversion charges paid by the assessee in pursuance to Notification No.16/7/2008-RD(Part-III) dated 03.09.2013 issued by the Government of Goa. As per this policy, the mining lessees were required to make payment of conversion charges for regulating mining dumps encroached upon the Government and Private lands and such conversion fees has been charged under the Land Revenue Code with reference to the area utilised for dumping activi....
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....ction and therefore such type of charges has been levied. 84. We observe that the assessee has already acquired mining rights and is carrying on mining operations since several years. Alleged payment has been made for regulating the land used in connection with the existing mining operations and not for acquiring any new capital asset. The conversion charges are in the nature of statutory charges payable under the Government Notification. The Government also provides a mechanism for regulating the mining dumps and levy of collection charges and that the policy no where characterises the levy as penalty for any offence. 85. We also note that this Tribunal in the case of Salitho Ores Pvt. Ltd. Vs. ACIT - ITA No.72/PAN/2018 order dated 21.09.2023 under identical facts relating to dumping conversion charges paid under the very same scheme held that such expenditure as revenue expenditure observing that the assessee already had an existing mining rights and the expenditure incurred is for removal of restriction/obstruction in carrying on the business and no capital asset acquired and that the expenditure incurred is revenue in nature. We also take note of the judgment of Hon'ble A....
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....under consideration, assessee claimed depreciation on the written down value (WDV) of the Goodwill carried forward from A.Y. 2005-06 and ld. Assessing Officer disallowed the claim observing that the Goodwill in the case of amalgamated company should be the same as that in the case of amalgamating company and since no depreciation on Goodwill was claimed by the amalgamating company the assessee's claim deserved to disallowed. In appeal, the First Appellate Authority followed the judgment of Hon'ble Bombay High Court in Income Tax Appeal No.28 of 2012 order dated 12.01.2016 rendered in assessee's own case and allowed the claim. Now the Revenue is in appeal before this Tribunal. 89. Ld. DR vehemently argued relying on the order of the Assessing Officer whereas Ld. Counsel for the assessee relied on the order of ld.CIT(A). 90. We have heard the rival submissions and perused the record placed before us. We note that the Goodwill has been created in the books during F.Y. 2004-05 and the depreciation claimed has been consistently allowed to the asesssee in the past. The said claim has been made on the written down value of the Goodwill. We also take note of the judgment of Hon'ble B....
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....the stamp duty and land conversion charges paid by the assessee in earlier years. Ld.CIT(A) held that there is no nexus between the loans given and money borrowed and therefore there is no case of disallowing the interest. Aggrieved Revenue is now in appeal before this Tribunal. 93. We have heard the rival contentions and perused the record placed before us. The alleged disallowance has been made by the Assessing Officer holding that the assessee has diverted borrowed funds for granting interest free loans to its subsidiaries. We not that Hon'ble Apex Court in the case of S.A. Builders Ltd. VS. CIT reported in 288 ITR 1 has held that interest free loans advanced to subsidiaries for the purpose of business and on account of commercial expediency does not call for any interest disallowance u/s. 36(1)(iii) of the Act. It has been consistently held by the Hon'ble Courts including that of CIT Vs. Reliance Industries Ltd. Reported in (2019) 102 taxmann.com 52 (SC) that when interest free funds available to the assessee sufficient to meets its investment with subsidiaries, interest expenditure cannot be disallowed u/s. 36(1)(iii) of the Act. We also take note that no such disallowance ....