The Commissioner Of Income Tax,Panaji-Goa v. M/S Dempo Mining Corporation Pvt.ltd.,Panaji-Goa

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 30 OF 2003 THE COMMISSIONER OF INCOME TAX,PANAJI-GOA. Versus ....Appellants M/S DEMPO MINING CORPORATION PVT.LTD.,PANAJI-GOA. ....Respondents SHRI S.R. RIVANKAR WITH,SHRI SUDIN USGAONKAR -Coram:R. J. KOCHAR &P. V. HARDAS, JJ. -Date:15th December, 2003 P.C.: Only three questions have beenarticulated in the Memo of Appeal whicharise for consideration of this Court,being substantial questions of law, inthese Appeals under section 260-A ofthe Income Tax Act, 1961. The same read thus:- A) Whether on the facts and in thecircumstances of the case, the ITAT wasjustified in holding that the assesseeis entitled for deduction on investmentallowance u/s 32 A of the IT Act, inrespect of Machinery used in Miningactivity ignoring the fact that theassessee is engaged in extraction andprocessing of Iron ore, not amounting tomanufacturing or production of anyarticle or thing? B) Whether on the facts and in the circumstances of the case, the ITAT wasright in law to hold that provisions ofsection 43B of the IT Act, were notapplicable on the amount of Royaltypayable not being fee, or tax?C) Whether the findings of the ITAT thatroyalty cannot be treated as fee, forthe purpose of disallowance u/s 43 B iscontrary to the law laid down by theHon'ble Supreme Court in "Gorelal Dubeyvs. CIT' (248 ITR 3)?"2. Having considered the rivalsubmissions, it is seen that insofar asthe question regarding allowability ofinvestment allowance on machinery isconcerned, that issue stands answered bythe unreported decision of our HighCourt in Tax Appeal Nos. 66/2002, 5/2003and 6/2002, decided on 16th July, 2003.In the circumstances, we find no reasonto examine that question afresh inthese appeals. On the other hand, we arebound by the earlier decision of ourHigh Court referred to above in theleading case of Commissioner of IncomeTax vs. M/s. Sesa Goa Ltd..3. Insofar as the question regarding theapplication of the provisions ofSection 43 B of the Act in relation tothe royalty, whether it can be treatedas fee, even this question standsfinally concluded in fovour of theRevenue in view of the decision of the Apex Court as reported in 248 ITR 3 in the case of Gorelal Dubey vs. Commissioner of Income tax. In the circumstances,that question will have to be answeredin favour of the Revenue.4. Accordingly, these Appeals partlysucceed to the extent of questions B & C. No order as to costs. R. J. KOCHAR, J.P. V. HARDAS, J.