Singareni Collieries Co. Ltd Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad Grants Major Relief to Singareni Collieries – Educational Society Contribution Allowed, Other Additions Remanded
Hyderabad Tribunal delivered a consolidated order on cross appeals filed by Singareni Collieries Co. Ltd. (“SCCL”) and the Revenue against CIT(A)/NFAC’s order dated 30.01.2024 for AY 2018-1
1. Closing Stock Difference (₹6.91 Cr)
AO added difference between standalone & consolidated financials as unexplained stock.
Tribunal: Difference may relate to subsidiary’s stock consolidation. Matter remanded to AO for verification
2. Contribution to Singareni Educational Society (₹38.15 Cr)
- AO disallowed u/s 40A(9).
- Tribunal: Payment was statutory obligation under NCWA, not voluntary. Relied on SC (Mohan Mahto, 2007), jurisdictional HC ruling (2024), & earlier ITAT orders for AYs 2015-16, 2016-17, 2021-22. Held allowable expenditure; addition deleted
3. Double Disallowance Issues (₹141.67 Cr provisions, ₹1.49 lakh TDS, ₹5.73 lakh cash, ₹11.67 Cr assets written off)
- AO made disallowance though assessee had already suo motu disallowed ₹933.43 Cr in ITR under “other items u/s 28–44DA.”
- Tribunal: To avoid double addition, issue remanded to AO for verification
4. Disallowance u/s 40(a)(ia) – Interest Payments (₹119.60 Cr)
- AO disallowed 30% of interest expenditure alleging non-TDS.
- Tribunal: Whether section 194A applies requires factual verification. Remanded to AO
5. Section 43B Disallowance Error (₹1.07 Cr)
- AO added amount due to inadvertent ITR reporting mismatch.
- Tribunal: Pure reporting error; remanded to AO to verify & delete if claim correct
6. Revenue’s Appeal – Depreciation on Mine Development Expenditure (₹30.46 Cr)
- AO restricted depreciation to 10% (as “building”). CIT(A) allowed 15%.
- Tribunal upheld CIT(A): Expenditure within mines (tunnels, dams, bunkers, retaining walls) is functionally “plant & machinery.” Earlier ITAT & HC rulings in SCCL’s own cases followed. Depreciation @15% confirmed; Revenue’s appeal dismissed
Tribunal’s Final Decision
