Principal Commissioner Of Income Tax, Sambalpur Charge v. M/S. Tata Sponge Iron Ltd., Keonjhar

IN THE HIGH COURT OF ORISSA AT CUTTACK ITA No.95 of 2022 ….Appellant Principal Commissioner of Income Tax, Sambalpur Charge -versus- M/s. TATA Sponge Iron Ltd., Keonjhar …. Respondent ITA No.98 of 2022 Principal Commissioner of ….AppellantIncome Tax, Sambalpur Charge-versus- M/s. TATA Sponge Iron Ltd., ….RespondentKeonjharITA No.99 of 2022Principal Commissioner of ….AppellantIncome Tax, Sambalpur Charge-versus- M/s. TATA Sponge Iron Ltd., ….RespondentKeonjharITA No.101 of 2022Principal Commissioner of ….AppellantIncome Tax, Sambalpur Charge-versus- M/s. TATA Sponge Iron Ltd., ….Respondent Keonjhar ITA No.102 of 2022 ….Appellant Principal Commissioner of Income Tax, Sambalpur Charge -versus- M/s. TATA Sponge Iron Ltd., Keonjhar ….Respondent ITA No.103 of 2022 ….Appellant Principal Commissioner of Income Tax, Sambalpur Charge -versus- M/s. TATA Sponge Iron Ltd., Keonjhar ….Respondent Advocates appeared in this case: For Appellant : Mr. S.S. Mohapatra, Advocate Senior Standing Counsel (Revenue) (In all the appeals) For Respondents : Mr. A. Parja, Senior Advocate with Mr.V. Mohapatra, Advocate (In all the appeals) CORAM: JUSTICE ARINDAM SINHA JUSTICE SANJAY KUMAR MISHRA ----------------------------------------------------------------------- Date of hearing and judgment: 27.07.2023 ----------------------------------------------------------------------- ARINDAM SINHA, J.1. Mr. Mohapatra, learned advocate, Senior Standing Counsel appears on behalf of appellant (revenue). He submits, there are two issues giving rise to substantial questions of law, on which the appeal be admitted against order dated 4[th] July, 2022 made by the Income Tax Appellate Tribunal, Cuttack Bench in ITA no.152/CTK/2015, ITA no.116/CTK/2016, ITA no.4077/ CTK/2015, ITA no.158/CTK/2014, ITA no.153/CTK/2015 and ITA no.117/CTK/2016 2. He submits, the two issues are firstly, regarding expenditure on railway siding, taken by the Assessing Officer (AO) to be capital in nature on disallowing the claim of expenditure. The Tribunal relied on its earlier order dated 28[th] April, 2004 to hold against revenue. He draws attention to paragraph-13 in impugned order to submit, fact was that the railway had continued to keep the siding open clearly showing that the assessee had been given use of it. The siding was constructed by the assessee and it is deriving enduring benefit from use of it. Hence, the AO was correct in disallowing the expenditure on the siding. On query from Court he submits, earlier order dated 28[th] April, 2004 of the Tribunal was challenged in appeal. The appeal went against revenue. 3. The second point, Mr. Mohapatra submits, is regarding benefit under section 80IA in Income Tax Act, 1961 to the captive power plant of assessee regarding its supply to GRIDCO. In fairness he submits, appeal to this Court earlier on the issue, was decided against revenue upon reliance of CIT Vs. Alembic Limited wherein, the Gujarat High Court had taken the view in decision dated 20[th] July 2016. Further appeal to the Supreme Court against Alembic limited (supra) is pending. 4. Mr. Parija, learned senior advocate appears on behalf of the assessee. He submits, the Tribunal correctly relied on judgment of the Supreme Court in M/s. Empire Jute Co. Ltd. v. Commissioner of Income Tax, reported in (1980) 4 SCC 25. The second point also stands decided against revenue. 5. Fact found by the Tribunal is that the siding is on railway line. It belongs to the railway. The assessee appears to have incurred expenditure for use of it. The result of improvement may be of enduring nature but the expenditure incurred by the assessee on the siding cannot be said to be capital in nature. 6. In M/s. Empire Jute Co. Ltd. (supra) the Supreme Court had expressed its view, on the issue where the asset improved by 4. Mr. Parija, learned senior advocate appears on behalf of the assessee. He submits, the Tribunal correctly relied on judgment of the Supreme Court in M/s. Empire Jute Co. Ltd. v. Commissioner of Income Tax, reported in (1980) 4 SCC 25. The second point also stands decided against revenue. 5. Fact found by the Tribunal is that the siding is on railway line. It belongs to the railway. The assessee appears to have incurred expenditure for use of it. The result of improvement may be of enduring nature but the expenditure incurred by the assessee on the siding cannot be said to be capital in nature. 6. In M/s. Empire Jute Co. Ltd. (supra) the Supreme Court had expressed its view, on the issue where the asset improved by expenditure of the assessee, belonged to the assessee. In spite of the Supreme Court finding nature of use and improvement caused by the expenditure to be of enduring nature, the Court had said that it was not capital expenditure. was not capital expenditure. 7. In the facts and circumstances of the cases before us, we do not find any substantial question arises on this issue. 8. So far as the second point is concerned, we accept view taken by the Gujarat High Court in Alembic (supra) as followed by coordinate Bench on order dated 31[st] July, 2019 in I.TA no.163 of 2011 (parties own case). P.Pradhan 9. No substantial question arises for admission of the appeals. They are dismissed. (Arindam Sinha) Judge (S.K. Mishra) Judge Signature Not Verified Digitally SignedSigned by: PRASANT KUMAR PRADHANDesignation: SecretaryReason: AuthenticationLocation: High Court of Orissa, CuttackDate: 28-Jul-2023 14:46:27