The Pune Income Tax Appellate Tribunal (ITAT) has recently held that lease rent paid for acquiring mining rights is capital in nature and no deduction would be allowable.
Assessee ZF Steering Gear (India) Ltd is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing mechanical and power steering gears and parts thereof for commercial vehicles, passengers-buses, multi-utility vehicles, passenger-cars and tractors. After filing the return Deputy commissioner disallowed an amount of Rs.24,33,339/ towards amortization of leasehold premium paid in respect of land acquired from Gujarat Power Corporation Limited, Gujarat for Solar Project on leasehold basis. Against this order the assessee filed an appeal before ITAT.
Nikhil Pathak Counsel For The Assessee Submits That Assessing Officer has erred in law and on facts in confirming disallowance of the claim of expenses of Rs.24,33,339/- towards amortisation of leasehold premium paid in respect of land acquired from Gujarat Power Corporation Limited, Gujarat for Solar project on leasehold basis.
M. G. Jasnani counsel for the revenue submits that amortization of lease premium could not be allowed as “revenue expenditure”, as it is of enduring nature. After considering the contentions of the both parties the division bench of ITAT comprising Partha Sarathi Chaudhury,( Judicial Member) And Inturi Rama Rao, (Accountant Member ) dismiss the appeal filed by the assessee and observed in the light of the judgment of the Supreme Court in the case of Aditya Minerals Pvt. Ltd. the impugned amortization of lease premium cannot be allowed as “revenue expenditure”
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