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Allowed of Leave encashment expenditure even though the same has not been made in the return of income. Where the taxes deposited before filing the return of income were more than the taxes finally determined on regular assessment, the interest under section 234A is held not leviable.

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Section 37, 139, 234A of Income Tax Act, 1961—In the instant case, appeal is preferred by revenue.
In the 1st ground revenue challenged the deletion of addition of 20,00,000/- made by the AO by disallowing contribution to State Renewal Fund.
Held that— Following the decision of the Co-ordinate Bench in assessee’s own case and decision of the Hon’ble Rajasthan High Court in case of Pr. CIT vs. Rajasthan State Seed Corporation Ltd, we upheld the order of the ld. CIT(A). Hence, the ground so taken by the Revenue is dismissed.

In 2nd ground the Revenue has challenged allowance of deduction of 3,01,47, 000/- in respect of provision for Mines Closure Expenses.

Held that— Following the decision of the Co-ordinate Bench in assessee’s own case and decision of the Hon’ble Rajasthan High Court in case of Pr. CIT vs. Rajasthan State Seed Corporation Ltd, we hereby affirm the order of ld. CIT(A). Hence, the ground so taken by the Revenue is dismissed.

In 3rd ground Revenue has challenged the decision of ld. CIT(A) wherein receipt of 2,92,48,044/- from sale of Carbon Emission Certifications were held as capital in nature.

Held that— Following the decision of the Co-ordinate Bench in assessee’s own case, we hereby affirm the order of the ld CIT(A). Hence, the ground so taken by the Revenue is dismissed.

In Ground No. 1 of the assessee’s appeal, it has challenged the confirmation by the ld CIT(A) of disallowance of 1,22,76,496/- out of rural development expenses.

Held that— we are of the view that where the expenditure has been incurred by the assessee in vicinity of its mining areas and its workers and its employees are also benefited by incurrence of such expenditure, the assessee has established the necessary nexus of such expenditure for the purpose of smooth running of its business operation and such expenditure should be held as allowable deduction. In the result, we delete the addition made by the Assessing Officer under the head of Rural Development Expenses and ground so taken by the assessee is allowed.

In Ground No. 2, the assessee has challenged the action of the ld. CIT(A) in confirming the disallowance of amortization of mining land of 3,97,32,278/- and leasehold land of 8,18,248/- by treating it as capital expenditure.
Held that— following the decision of the Hon’ble Rajasthan High Court, the AO is directed to allow depreciation under 32(1)(ii) of the Act. The ground of assessee is thus allowed with said directions.

In Ground No. 3, the assessee has challenged the confirmation of action of the AO in not allowing the leave encashment expenditure of 29,39,32,282/- claimed by the assessee.

Held that— AO is directed to allow the claim of contribution made to LIC towards the liability of leave encashment of the employees even though the same has not been made in the return of income.

In Ground No. 4, the assessee has challenged the action of the ld. CIT(A) in holding that issue of chargeability of interest u/s 234A is mandatorily and consequential by not deciding the ground that the return filed on or before the date prescribed u/s 139(1) and thus the same is not leviable.