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Mahanadi Coalfields Ltd, … vs Dcit, Sambalpur on 3 January, 2018

2. The issue involved in Ground No.1 of appeal and Ground No.11 of

appeal is inter connected, which relates to confirmation of disallowance of

Prospecting & Boring expenses of Rs.397.91 lakhs.

3. Brief facts of the case are that the Assessing Officer noticed that the

assessee has claimed Rs.448.53 lakhs as prospecting & boring expenses

for the year. Before the Assessing Officer, it was explained that as per

the accounting policy, prospecting & boring expenses are part of fixed

asset as per schedule -XIV of the Companies Act, 1956 but being of
ITA No .73/ CTK/201 2
Asse ssment Year : 20 08- 200 9

revenue nature, the expenditure has been claimed in the computation of

total income. The Assessing Officer was not satisfied with the explanation

furnished by the assessee and concluded that the prospecting & boring

expenditure as per the assessment order of earlier years is to be allowed

u/s.35E for next ten years and, accordingly, allowed 10% of Rs.448.53

lakhs being Rs.44.85 lakhs, which was confirmed in appeal by the CIT(A).

Source: IK

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Mahanadi Coalfields Ltd, … vs Dcit, Sambalpur on 3 January, 2018


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