Karnataka High Court
The Prl Commissioner Of Income Tax vs M/S Gogte Minerals on 8 February, 2024
Author: S G Pandit
Bench: S G Pandit
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ITA No. 100037 of 2022
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 8TH DAY OF FEBRUARY, 2024
PRESENT
THE HON'BLE MR JUSTICE S G PANDIT
AND
THE HON'BLE MR JUSTICE K V ARAVIND
INCOME TAX APPEAL NO. 100037 OF 2022
BETWEEN:
1. THE PR COMMISSIONER OF INCOME TAX,
NAVANAGAR, HUBLI-580026.
2. DEPUTY COMMISSIONER,
INCOME TAX, CIRCLE-1,
BELAGAVI-590001.
...APPELLANTS
(BY SRI. Y. V. RAVIRAJ, ADVOCATE)
AND:
M/S. GOGTE MINERALS,
NASCO ISHANYA, KHANAPUR ROAD,
TILAKWADI, BELAGAVI-590001
PAN: AABFG 3663N.
Digitally signed by ...RESPONDENT
CHANDRASHEKAR
LAXMAN
KATTIMANI
Date: 2024.02.17
THIS INCOME TAX APPEAL IS FILED U/S.260A OF THE INCOME
11:07:43 +0530 TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL
QUESTION OF LAW STATED ABOVE AND ALLOW THE APPEAL AND
SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE
TRIBUNAL, PANAJI NENCH, PANAJI IN ITA NO.186/PAN/2018, DATED
05.04.2022 FOR THE AY 2014-15 MARKED AS ANNEXURE-A AND
CONFIRM THE ORDER DTD 23.12.2016 PASSED BY THE ASSISTANT
COMMISSIONER OF INCOME TAX, CIRCLE-1, BELAGAVI FOR THE A.Y
2014-15 AS ENCLOSED AND MARKED AS ANNEXURE C.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
K V ARAVIND, J., THE FOLLOWING:
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ITA No. 100037 of 2022
JUDGMENT
The above appeal is under Section 260A of the
Income Tax Act, 1961 (for short 'Act'), by the Revenue
aggrieved against the order passed by the Income Tax
Appellate Tribunal (for short 'ITAT') in ITA
No.186/PAN/2018 for the assessment year 2014-15 dated
05.04.2022.
2. The revenue has raised following substantial
questions of law for consideration of this Court:
i. Whether on the facts and in the
circumstances of the case and in law, the
Tribunal is justified in remanding the
matter back to the assessing authority
without giving any findings on the
detailed speaking order of assessment
passed by the assessing authority u/s
143(3) of the Act, in conformity with the
Judgment of this Hon'ble Court in ITRC
No.138 to 141 of 1993 on the issue of
allowance of 'pit filling' expenses in the
case of the Respondent for the earlier
years?
ii. Whether on the facts and in the
circumstances of the case and in law, the
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Tribunal is justified in holding that the
unascertained and un-estimated
'provisions' of mine closure expenses not
incurred during the year are allowable
expenses when the mining activities are
under progress and the liability to close
the mine has not arisen?
iii. Whether on the facts and in the
circumstances of the case and in law, the
Tribunal is justified in holding that the 'pit
filling' expenses not actually incurred, are
allowable expenses without referring to
and which is not in conformity with the
Supreme Court Judgment in the case of
M/s New India Mining Corporation (P) Ltd
(2000) 111 Taxman 632(SC)?
3. The respondent/assessee is engaged in the
business of Mining of iron ore. The assessee filed return of
income on 13.09.2014 declaring total income of
Rs.21,82,77,410/-. The assessment was selected for
scrutiny by issuance of notice under Section 143(2) of the
Act. The assessee has claimed a sum of Rs.20,95,29,352/-
as deduction towards pit filling expenses on estimation at
the rate of Rs.106 per ton. The assessing officer by order
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of assessment dated 23.12.2016 disallowed the same,
holding the expenses are unreasonable and not genuine in
the absence of any reasonable, rational and scientific basis
for estimation.
4. The assessee against order of assessment
preferred appeal before the Commissioner of Income Tax
(Appeals), Belagavi. The CIT(Appeals) by order dated
12.02.2018 allowed the appeal in part by estimating the
pit filling expenses at Rs.104 per ton.
5. The revenue being aggrieved against the order
of CIT(A) preferred appeal before the Tribunal. The
Tribunal proceeded to hold that the estimation of pit filling
expenses made by CIT(A) is without any basis. The
Tribunal further recorded that the addition/disallowance
made by the assessing officer is without proper
calculation. The Tribunal directed the assessing officer to
reconsider the calculation as per available records after
granting opportunity to the assessee. The revenue is in
appeal challenging the order of remand.
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6. Shri. Y.V. Raviraj, learned Senior Standing
counsel appearing for the appellant/revenue submits that
the assessing officer has recorded a detailed finding to
disallow the pit filling expenses. The provision made
towards pit filing expenses is without any basis. The
provision made in the profit and loss account towards pit
filling is regularly withdrawn by the partners, which would
show that the provision was not towards pit filling
expenses qualifying business expenditure. As the
petitioner is in continuation of mining activity, the liability
to fill the mining pits does not arise. In the circumstances,
the order of the Tribunal remanding the matter to the
assessing officer for reconsideration is without any
purpose.
7. We have heard learned Senior Standing counsel
for the appellant/revenue Shri. Y.V. Raviraj and perused
the appeal papers.
8. The assessing officer has disallowed the entire
claim of expenditure by way of provision towards pit filling
expenses on the basis of the statements recorded from the
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representatives of the assessee. The Appellate
Commissioner has proceeded to estimate the expenses
towards pit filling expenses. On appeal by the revenue, the
Tribunal has arrived at a conclusion that the finding
recorded by the CIT(A) in estimating the pit filling
expenses is without any basis. The Tribunal further held
that the pit filling expenses has to be reconsidered by the
assessing officer after granting opportunity to the
assessee.
9. The revenue is in appeal contending that, in
view of the detailed order of assessment, order of remand
to the assessing officer is unnecessary. The revenue in this
appeal has not alleged or pleaded that the finding
recorded by the Tribunal is perverse. Further the order of
the Tribunal remanding the matter to the assessing officer
is without expressing any opinion on merits of the case.
The order of remand would not prejudice the interest of
the revenue or the assessee. No substantial question of
law would arise for consideration of this Court from the
order of Tribunal.
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10. In view of the above, we are of the considered
opinion that no substantial question of law would arise
from the order of remand passed by the Tribunal. Hence,
the appeal is dismissed.
Sd/-
JUDGE
Sd/-
JUDGE
RKM
