Appeal details
Counselvise Citation
12523314 RSA 2013
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 16 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-09-2013
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
26-08-2013
Assessment Year
2004-2005
Appeal Filed On
08-03-2013
Judgement Text
IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 125/JODH/2013 (A.Y. 2004-05) LATE SHRI BHERU LAL LOHAR VS DCIT, CENTRAL-1, L/H SHRI RAJENDRA LOHAR, 16, MUMAL TOWER, PROP. MAHALAXMI STONE SUPPLIER, UDAIPUR. BHILWARA ROAD, AMET, RAJSAMAND. PAN NO. AAKPL4774B (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. AMIT KOTHARI. DEPARTMENT BY : DR. DEEPAK SEHGAL-CIT- DR. DATE OF HEARING : 26/08/2013. DATE OF PRONOUNCEMENT : 23/09/2013. O R D E R PER HARI OM MARATHA, J.M. : THIS APPEAL OF THE ASSESSEE FOR A.Y. 2004-05 IS DI RECTED AGAINST THE ORDER OF LD. CIT(A), DATED 19/12/2012. 2. THE SOLE GROUND RAISED IN THIS APPEAL IS AGAINST THE SUSTAINED ADDITION OF RS. 5,30,570/- MADE ON ACCOUNT OF EXCES S STOCK OF MARBLE BLOCKS. THE FACTS RELATING TO THIS ISSUE ARE THAT O RIGINALLY THE 2 ASSESSMENT U/S 153A R.W.S. 143(3) WAS MADE ON 17/03 /2006 AT A TOTAL INCOME OF RS. 25,02,310/- AGAINST THE RETURNED INCO ME OF RS. 19,28,511/-. IN THE FIRST ROUND LD. CIT(A), CENTRAL , JAIPUR VIDE ORDER DATED 23/11/2007 DELETED ONE OF THE ADDITIONS AND R EDUCED THE ASSESSED INCOME AT RS. 24,59,080/-. IN FURTHER APPE AL APPELLATE TRIBUNAL VIDE ITS ORDER DATED 29/12/2008 RESTORED B ACK THE ISSUE OF EXCESS STOCK FOUND TO THE FILE OF A.O. FOR MAKING F RESH VERIFICATION. THE TRIBUNAL GAVE THE FOLLOWING DIRECTION TO A.O. '3. THE ID. CIT(A) FINDING THAT THE SURVEY PARTY HA S CATEGORIZED THE EXCESS STOCK AS WHITE MARBLE BLOCK GR. 1, UPHELD THE FINDING OF ASSESSING OFFICER THAT THERE WAS EXCESS STOCK AND AS SUCH CONFIRMED THE ADDITION AS UNEXPLAINED INVESTMENT. THERE BEING NOT A MUCH VARI ATION BETWEEN THE TRADING ADDITION AND ADDITION AT RS. 53 0570/- OF UNEXPLAINED INVESTMENT AS AGAINST RS. 531200/- M ADE BY THE AO. 4. WE HAVE HEARD THE PARTIES AND HAVE ALSO CAREFULL Y PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS CL AIMED THAT EXCESS STOCK INVENTORIZED IS OF PRODUCE OF HIS MINES THAT WAS NOT EVEN A FINISHED PRODUCT. IT, THEREFORE , COULD NOT BE TAKEN AS AN INVESTMENT BY THE ASSESSEE. AN A FFIDAVIT WAS ALSO FILED BEFORE THE AO BUT HE DID NOT COMMENT ADVERSELY THEREON. THAT BESIDES, THE VALUATION OF S UCH 3 STOCK IS STATED TO BE HIGH AND EXCESSIVE IN VIEW OF THE FACT THAT NO INVESTMENT THEREON IS INVOLVED. THESE FACTS NEED TO BE EXAMINED FOR COMING TO A LOGICAL CONCLUSION I N ACCORDANCE WITH LAW, MORE SO WHEN THE ASSESSING OFF ICER MADE TRADING ADDITION AND ALLOWED TELESCOPING AGAIN ST UNEXPLAINED INVESTMENT WHILE ID. CIT(A) MADE UNEXPL AINED INVESTMENT A BASIS OF SUSTAINING ADDITION WITHOUT D ELVING UPON THE ESTIMATION OF INCOME. WE, THEREFORE, SET A SIDE THE ADDITION AND RESTORE THE MATTER TO THE FILE OF THE AO FOR ADJUDICATION OF ISSUES AFRESH IN THE LIGHT OF OBSERVATIONS AS AFORESAID. NEEDLESS TO ADD REASONAB LE AND EFFECTIVE OPPORTUNITIES OF BEING HEARD SHALL BE GIV EN TO ASSESSEE BEFORE TAKING DECISION IN ACCORDANCE WITH LAW. ' 2.1 IN FACT A SURVEY U/S 133A OF THE ACT WAS CONDUC TED AND DURING THIS SURVEY MADE AT THE PREMISES OF M/S. MAHALAXMI STONE SUPPLIERS WHICH IS THE PROPRIETARY CONCERN OF THE ASSESSEE, A T THE MARBLE MINE OF THIS CONCERN, PHYSICAL INVENTORY OF STOCK OF WHITE MARBLE BLOCKS WAS PREPARED. THE EXCESS STOCK WAS DETERMINE AT 8906 SQ . FT. VALUED AT RS. 530570/-, BY TAKING EQUIVALENT TRUCK LOAD AND THEN CONVERTING ITS VALUE IN RUPEES. 2.2 IN THE SECOND ROUND THE SAME ADDITION HAS BEEN REPEATED. 4 2.3 BOTH THE PARTIES HAVE REITERATED THEIR EARLIER STAND. THE GIST OF LD. ARS SUBMISSION ARE AS UNDER :- 1. THE APPELLANT IS ENGAGED IN MINING AND SALE OF MARBLE BLOCKS IN THE NAME OF M/S MAHALAXMI STONE SUPPLIERS AMET. 2. A SURVEY UNDER SECTION 133A WAS CONDUCTED ON DATED 11-12- 2003 ON THE MARBLE MINES OF THE APPELLANT IN VILLAGE KOTADI. 3. DURING THE COURSE OF SURVEY UNDER SECTION 133A OF THE ACT, PHYSICAL VERIFICATION OF MARBLE BLOCKS WAS CAR RIED OUT BY THE SURVEY PARTY AND RECORDED THE STATEMENT OF T HE APPELLANT. 4. DURING THE COURSE OF PHYSICAL VERIFICATION, THE STOCK OF MARBLE BLOCKS OF 8,906 CFT WERE ALLEGED TO BE FOUND IN EXCESS THAN THE BALANCE OF MARBLE BLOCKS SHOWN IN T HE BOOKS OF ACCOUNTS. 5. THE SURVEY OFFICER CONVERTED THE EXCESS STO CK OF 8906 CFT MARBLE BLOCKS INTO' 37.90 TRUCKLOADS PRESUMING THAT 235 CFT MARBLE BLOCKS ARE EQUIVALENT TO ONE TRUCKLO AD. 5 6. THE SURVEY OFFICER VALUED THE SAID EXCESS STOC K OF 37.90 TRUCKS LOAD FOR RS. 5,30,570/- ASSUMING THE RATE OF RS. 14,000/-PER TRUCKLOAD ONLY. 3.7. THE ASSESSING OFFICER HAS MADE THE ADDITION O F EXCESS STOCK OF RS. 5,30,570/- TO THE RETURNED INCOME OF T HE APPELLANT FOR THE REASONS STATED IN HIS ORDER. 3.8. AT THE OUTSET THE APPELLANT VERY RESPECTFULLY STATES IN BRIEF THE MODUS OPERANDI OF EXCAVATING THE MARBLE B LOCKS FROM MINES AND MAINTAINING THE STOCK ACCOUNTS AS FO LLOWS: THE MARBLE ROCKS ARE BLASTED IN THE MINES WITH EXPL OSIVE AND THE UNEVEN BLASTED MARBLE ROCKS ARE PRODUCED FR OM THE MINES ALONG WITH THE MARBLE SCRAP. THEREAFTER THE UNEVEN BLASTED MARBLE ROCKS ARE SIZE D INTO SPECIFIC SIZE OF MARBLE BLOCKS BY THE CUTTING AND T REAMING PROCESS AND THE SIZED MARBLE BLOCKS ARE CALLED FINI SHED GOODS. AFTER PROCESS OF SIZING, THE MARBLE BLOCKS C OME INTO MARKETABLE CONDITION AND THEREAFTER THE SIZED MARBL E BLOCKS ARE RECORDED IN THE BOOKS OF ACCOUNTS (STOCK REGISTER) AS FINISHED GOODS IN TERMS OF TONS. THE RESIDUAL WASTE, SCRAP AND BLASTED MARBLE ROCKS OF UNEVEN SIZE HAVING SEVERAL CRACKS IN THEM AND NOT I N MARKETABLE CONDITION AS FINISHED GOODS HAVE BEEN TH ROWN OUT OR DUMPED SEPARATELY FROM TIME TO TIME. 6 9. THE SURVEY OFFICER HAS TAKEN THE PHYSICAL S TOCK OF THE RESIDUAL WASTE, SCRAP AND BLASTED MARBLE ROCKS OF U NEVEN SIZE HAVING SEVERAL CRACKS IN THEM AND NOT IN MARKE TABLE CONDITION AS FINISHED GOODS. 10. THE PHYSICAL STOCK OF WASTE AND UNUSABLE BLA ST MARBLE ROCKS OF UNEVEN SIZE CANNOT BE TREATED AS MARKETABLE STOCK OF FINISHED GOODS. THE UNEVEN SIZ E AND WASTE MARBLE ROCKS HAVE NO MARKETABLE VALUE FOR THE APPELLANT. 11. IN OTHER WORDS, THE SURVEY PARTY HAS TREATED THE WASTE BLASTED MARBLE ROCKS AS FINISHED MARBLE BLOCK S 12. THE APPELLANT VERY RESPECTFULLY FURTHER STAT ES THAT THE SURVEY PARTY HAS ADOPTED THE INCORRECT CONVERSI ON PARAMETER OF 235 CFT ARE EQUIVALENT TO ONE TRUCKLOA D. 13. THERE MAY BE LESS CFT MARBLE BLOCK THAN 235 CFT IN ONE TRUCKLOAD ACCORDING TO THE SIZE OF MARBLE BLOCK . 14. SIMILARLY, THE VALUE OF ONE TRUCKLOAD ADOPT ED BY THE SURVEY PARTY IS ALSO TOTALLY INCORRECT AND WITHOUT ANY CORROBORATING EVIDENCES. 15. IT IS VERY RESPECTFULLY FURTHER SUBMITTED THA T THERE WAS NO EXCESS STOCK OF FINISHED MARBLE BLOCKS ON TH E MINES AND, THEREFORE, THE ADDITION OF EXCESS STOCK OF MAR BLE 7 GOODS OF RS. 5,30,570/- MADE BY THE ASSESSING OFFIC ER TO THE RETURNED INCOME OF THE APPELLANT IS TOTALLY UNWARRANTED AND LIABLE TO BE DELETED. 16. SHRI RAJENDRA LOHAR HAS ALSO CONFIRMED IN RE PLY TO QUESTION 4 OF HIS POST SEARCH STATEMENT DATED 09-01 -2004 (COPY ENCLOSED) THAT THE SURVEY PARTY HAS INCLUDED SUCH MARBLE BLOCKS IN PHYSICAL INVENTORY, WHICH ARE NOT IN MARKETABLE CONDITION. 17. THE APPELLANT HAD ALSO FILED AN AFFIDAVIT DA TED 19-01- 2006 (COPY ENCLOSED) DECLARING THAT THE SURVEY PART Y HAS CARRIED PHYSICAL VERIFICATION OF STOCK OF MARBLE BL OCKS TREATING THE UNEVEN BLASTED MARBLE ROCKS AS FINISHE D MARBLE BLOCKS. 18. IT IS SETTLED PRINCIPLE OF LAW THAT THE AFFID AVIT IS HAVING THE EVIDENTIARY VALUE AND IF THE CONTENTS OF THE AFFIDAVIT FILED BY THE ASSESSEE ARE NOT SPECIFICALL Y REBUTTED BY THE ASSESSING OFFICER BY CROSS EXAMINING OR CALL ING UPON THE ASSESSEE TO PRODUCE ANY SPECIFIC DOCUMENTARY EV IDENCE IN SUPPORT OF THE AFFIDAVIT SWORN BY HIM, THE CONTE NTS OF THE SAID AFFIDAVIT DEEMED TO HAVE BEEN ACCEPTED BY HIM. OUR ABOVE SUBMISSIONS ARE WELL SUPPORTED BY THE FOL LOWING JUDICIAL DECISIONS: MEHTA PARIKH & CO. VS. CIT (1956) 30ITR 181 (S.C. ) SOHAN LAI GUPTA VS. CIT (1958) 33 ITR 786 (ALL.) 8 19. IN THE PRESENT CASE, THE ASSESSING OFFICER HA D NOT SPECIFICALLY CALLED ANY EVIDENCES OR DOCUMENTS FROM THE APPELLANT IN SUPPORT OF THE SWORN AFFIDAVIT. 20. THE ASSESSING OFFICER HAD NOT SPECIFICALLY CON TROVERTED THE CONTENTS OF THE AFFIDAVIT DATED 19-01-2006 AND IN THE ABSENCE OF SPECIFIC REBUTTAL BY ASSESSING OFFICER T HE SAME DEEMED TO HAVE BEEN ACCEPTED BY HIM. 21. THE ASSESSING OFFICER HAS SIMPLY OBSERVED TH AT THE AFFIDAVIT DATED 19-01-2006 GIVEN BY THE APPELLANT I S NOTHING BUT SELF-SERVING DOCUMENT AND PREPARED AFTE R THOUGHT AND ON MANIPULATED STAND HAVING NO SANCTITY IN THE EYE OF LAW. 22. THE SIMPLE OBSERVATION OF THE ASSESSING OFFI CER THAT THE AFFIDAVIT OF THE APPELLANT IS NOTHING BUT SELF- SERVING DOCUMENT HAVING NO LEGAL SANCTITY AND PREPARED AFTE R THOUGHT ON MANIPULATED STAND IS NOT SUFFICIENT AND ADEQUATE TO PROVE HIS ALLEGATION ON THE APPELLANT W ITHOUT ANY EVIDENCE. IN THE ABSENCE OF ANY TANGIBLE EVIDEN CE, THE AFFIDAVIT CANNOT BE TREATED AS PREPARED AFTER THOUG HT ON MANIPULATED STAND. 23. THE APPELLANT HAS CORRECTLY STATED FACTS IN THE AFFIDAVIT DATED 19-01-2006 FILED BY HIM AND THE SUR VEY PARTY HAS TAKEN THE PHYSICAL STOCK OF STOCK OF FINI SHED MARBLE BLOCKS TREATING THE UNEVEN SIZE MARBLE ROCKS AS 9 FINISHED MARBLE BLOCKS. 24. THE A.O. HAS OBSERVED THAT THE ASSESSEE HAS HIMSELF DECLARED ON OATH IN THE STATEMENTS RECORDED DURING THE COURSE OF SURVEY THAT HE HAD GIVEN CORRECT INFORMAT ION IN HEALTHY MIND AND WITHOUT ANY COERCION AND PRESSURE ON HIM IN RESPECT OF INVENTORY OF STOCK OF MARBLE BLOC KS OF HIS MINES AND THE AFFIDAVIT OF THE APPELLANT IS AFTER T HOUGHT. 25. THE APPELLANT VERY HUMBLY SUBMITS THAT THE STATEMENT RECORDED ON OATH UNDER SECTION 133A OF TH E ACT HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DUR ING THE COURSE OF SUCH STATEMENT CANNOT BE MADE BASIS O F ANY ADDITION IN THE ASSESSMENT. OUR RELIANCE HAS BEEN P LACED ON THE FOLLOWING JUDICIAL DECISION FOR THIS PURPOSE : CIT VS. S. KHADAR KHAN SONS (2012) 210 TAXMAN 248 ( SC) PAUL MATHEWS & SONS VS. CIT (2003) 263ITR 101 (KER. ) 26. THE APPELLANT, THEREFORE, VERY HUMBLY SUBMIT S THAT THE ADDITION OF THE EXCESS STOCK OF 8906 CFT MARBLE BLOCKS WORTH RS. 5,30,570/-MADE BY THE ASSESSING OFFICER O N THE BASIS OF SURVEY STATEMENT OF THE APPELLANT IS UNWAR RANTED AND LIABLE TO BE DELETED. 27. THE ASSESSING OFFICER HAS NOT BROUGHT ON REC ORD THE COGENT AND WORTHWHILE MATERIAL OR ANY CONCRETE AND TANGIBLE EVIDENCE OF DEFINITE CHARACTER TO PROVE TH AT THE 10 APPELLANT WAS HAVING THE EXCESS STOCK OF 8906 CFT M ARBLE BLOCKS ON HIS MINES AT THE TIME OF SURVEY. 28. IN THE ABSENCE OF ANY POSITIVE TANGIBLE EVIDE NCE TO PROVE THAT THE APPELLANT WAS HAVING THE EXCESS STOC K OF 8906 CFT MARBLE BLOCKS ON HIS MINES AT THE TIME OF SURVEY, THE ADDITION OF THE EXCESS STOCK OF 8906 CFT MARBLE BLOCKS WORTH RS. 5,30,57O/-MADE BY THE ASSESSING OFFICER I S LIABLE TO BE DELETED. 29. THE ASSESSING OFFICER HAS OBSERVED THAT THE APPELLANT HAS NOT OBJECTED BEFORE THE SURVEY PARTY AT TIME OF PREPARATION OF PHYSICAL INVENTORY THAT UNEVEN BLAST MARBLE ROCKS OF 8906 CFT ARE NOT THE FINISHED MARBLE BLOCK S 30. THE APPELLANT VERY HUMBLY SUBMITS THAT IN RE PLY TO QUESTION 12 OF THE STATEMENT RECORDED ON DATED 11-1 2-2003 DURING THE COURSE OF SURVEY UNDER SECTION 133A OF T HE ACT HE CLEARLY STATED THAT ONLY THREE TRUCK FINISHED GO ODS ARE LYING ON HIS MINES. THUS HE INDIRECTLY OBJECTED THA T EXCEPT ONE TRUCK OF FINISHED STOCK NO OTHER GOODS ARE FINI SHED GOODS. 31. THE APPELLANT FURTHER RESPECTFULLY STATES THAT THE OBSERVATION, FINDINGS AND ALLEGATIONS MADE BY THE ASSESSING OFFICER IN HIS ORDER OF ASSESSMENT AND TH E INFERENCES AND CONCLUSIONS DRAWN BY HIM ON THE BASI S OF THESE FINDINGS AND ALLEGATIONS ARE FACTUALLY INCORR ECT 11 PATENTLY ERRONEOUS AND, THEREFORE, THE SAME ARE LIA BLE TO BE QUASHED. 32. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT MARBLE BLOCK WHICH ARE DETACHED FROM THE MINE IN DEPTH ARE SUPPOSE TO BE ENTERED INTO PRODUCTION REGISTER OF M INE. 33. THE APPELLANT IS ENTERING THE FINISHED GOODS IN THE PRODUCTION CUM STOCK REGISTER REGULARLY. HE CONSIST ENTLY FOLLOWS THIS SYSTEM OF ENTERING THE STOCK IN PRODUC TION CUM STOCK REGISTER SINCE SEVERAL YEARS. 34. THE ASSESSING OFFICER FURTHER OBSERVED THAT STOCK CUM PRODUCTION REGISTER IS CERTIFIED BY THE ASSISTANT M INING ENGINEER IS INCORRECT. 35. THE APPELLANT SUBMITS THE PRODUCTION REPORT OF MARBLE BLOCKS SUBMITTED TO THE MINING DEPARTMENT IS SUBJECT TO VERIFICATION WITH THE PRODUCTION CUM STO CK REGISTER BY THE ASSISTANT MINING ENGINEER IN THE MI NING DEPARTMENT. 36. THERE IS NO ADVERSE REMARK HAS BEEN ENDORSED BY THE MINING DEPARTMENT ON SUCH PRODUCTION CUM STOCK REGI STER BY THE MINING DEPARTMENT WHICH CLEARLY PROVES THE AUTHENTICITY AND VERACITY OF PRODUCTION OF MARBLE B LOCKS BY THE APPELLANT. 12 37. THE BLAST MARBLE ROCKS MEASURING 8906 CFT LYING IN KOTADI MINES CANNOT BE TREATED AS STOCK OF MARBLE B LOCKS IN MARKETABLE CONDITION, AND SAME CANNOT BE COMPARE D WITH STOCK OF FINISHED MARBLE BLOCKS SHOWN IN THE S TOCK REGISTER. 38. THE APPELLANT HAS CORRECTLY SHOWN THE STOCK OF MARKETABLE MARBLE BLOCKS IN HIS BOOKS OF ACCOUNTS O N THE DATE OF SURVEY AND THERE WAS NO EXCESS STOCK FINISH ED MARBLE BLOCKS ON MINES. 39. IT WOULD BE SIGNIFICANT TO STATE HERE THAT MA RBLE IS NATURAL MINERAL PRODUCT AND FOUND UNDERNEATH THE EA RTH. THE LAND IS TAKEN ON LEASE FROM THE MINING DEPARTME NT OF THE STATE GOVERNMENT ON PAYMENT OF DEAD RENT/ ROYAL TY ON PRODUCTION OF MARBLE. 40. THE MARBLE PRODUCT IS PROCURED FROM THE MINE S BY THE PROCESS OF EXCAVATING OF MINES AND DRILLING AS WELL AS BLASTING OF MARBLE ROCKS IN THE MINES WITH EXPLOSIV E AND PRODUCED THE UNEVEN MARBLE PRODUCT FROM THE MINES A LONG WITH THE MARBLE SCRAP. 41. IT IS UNIVERSAL FACT THAT THE ASSESSEE CANNO T PRODUCE OR MANUFACTURE THE MARBLE BLOCKS OR SCRAP EXCEPT FOLLOWING THE ABOVE PRODUCTION PROCESS. 13 42. IT IS ALSO WELL SETTLED THAT THERE CANNOT BE EXCESS STOCK OF MARBLE PRODUCT ON PRODUCING MINES EXCEPT M AKING NEW PURCHASES OF MARBLE PRODUCT FROM THE MARKET. 43. THE APPELLANT HAS NOT MADE ANY PURCHASES OF THE MARBLE BLOCKS OR SCRAP FROM THE MARKET DURING THE Y EAR. 44. FROM THE ABOVE, IT BECOMES ABUNDANTLY CLEAR T HAT THERE WAS AND /OR CANNOT BE EXCESS STOCK OF MARBLE BLOCKS ON THE MINES OF THE ASSESSEE. 45. THE APPELLANT HAS CORRECTLY SHOWN THE STOCK OF MARKETABLE MARBLE BLOCKS IN HIS BOOKS OF ACCOUNTS O N THE DATE OF SURVEY AND THERE WAS NO EXCESS STOCK OF FIN ISHED MARBLE BLOCKS ON MINES. 46. FOR THE REASONS STATED ABOVE, THE APPELLANT VERY RESPECTFULLY STATES THAT THERE WAS NO EXCESS STOCK OF 8906 CFT ON THE MINES ON THE DATE OF SURVEY. 47. THEREFORE, THE ADDITION OF UNDISCLOSED INCO ME OF RS. 5,30,570/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS STOCK IS LIABLE TO BE DELETED. 48. IN VIEW OF THE FOREGOING GROUNDS OF DEFENCE, THE APPELLANT VERY HUMBLY PRAYS THAT THE ADDITION OF UNDISCLOSED INCOME OF RS. 5,30,570/- MADE BY THE AS SESSING OFFICER ON ACCOUNT OF EXCESS STOCK IS LIABLE TO BE DELETED. 14 IN VIEW OF THE FOREGOING GROUNDS OF DEFENCE, THE AP PELLANT VERY HUMBLY PRAYS TO YOUR HONOUR TO : I. QUASH THE ASSESSMENT ORDER DATED 21-12-2009 AS BEING AB INITIO, VOID, ILLEGAL AND / OR IN OPERATIVE, II. DELETE THE VARIOUS ADDITIONS AND/OR DISALLOW ANCES OF RS. 5,30,570/-MADE BY THE ASSESSING OFFICER AS BE ING ARBITRARY, FICTITIOUS AND ILLEGAL AND VOID AB INITI O. III. PASS SUCH OTHER ORDER OR ORDERS AS MAY BE DE EMED FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE. THE APPELLANT CRAVES LEAVE TO FURTHER ADD, AMEND AND/OR TO MODIFY THE ABOVE SUBMISSION AT THE TIME OF HEA RING. WE HOPE YOUR GOODSELF WILL FIND OUR ABOVE SUBMISSIO NS IN ORDER AND FAVOUR US WITH AN APPROPRIATE RELIEF AND OBLIGE. THE ABOVE SUBMISSIONS ARE MADE AS PER THE INSTRUCTI ONS OF OUR ABOVE CLIENT AND INFORMATION, DOCUMENTS AND EXPLANATION GIVEN TO US BY THEM FROM TIME TO TIME. THE APPELLANT VERY HUMBLY PRAYS FOR JUSTICE. ' 2.4 THE GIST OF LD. DRS SUBMISSION ARE AS UNDER :- THE AO HAS OBSERVED THAT DURING THE COURSE OF PRES ENT PROCEEDINGS THE ASSESSEE HAS ARGUED THE SAME FACTS AS RAISED DURING ORIGINAL ASSESSMENT PROCEEDINGS AND N O NEW 15 THINGS/ EVIDENCES WERE FURNISHED. THE AO ALSO OBSER VED THAT DURING THE COURSE OF PRESENT PROCEEDINGS THE A SSESSEE ARGUED THAT HE ENTERED ONLY FINISHED GOODS IN REGIS TER AND THERE IS NO INVESTMENT IN GOODS PRODUCED. THE AO HA S ACCORDINGLY REQUIRED THE ASSESSEE TO GIVE DETAILS O F FINISHED GOODS AS WELL AS UNFINISHED GOODS AND COST OF PRODUCTION OF BOTH TYPES OF GOODS. AS REGARDS SUCH QUERY THE ASSESSEE STATED THAT NO SUCH DETAIL WAS MAINTAI NED. FURTHER REGARDING THE CLAIM OF THE ASSESSEE IN THE AFFIDAVIT THAT THE STOCK WAS TAKEN OF BLASTED MARBLE ROCKS TH E AO HAS REQUIRED THE ASSESSEE TO GIVE EVIDENCE IN SUPPO RT OF SUCH AFFIDAVIT AND AGAIN THE ASSESSEE STATED THAT N O DETAIL IS AVAILABLE FOR SUCH BLASTING OF MARBLE ROCKS. THE EXPENSES ON PRODUCTION ON PARTICULAR DAY AND OF PARTICULAR G OODS ARE ALSO STATED TO BE MAINTAINED ON DAY TO DAY BASIS. A S PER AO NO QUALITY WISE AND QUANTITY WISE DETAIL OF MARBLE BLOCKS IS MAINTAINED OR RECORDED IN THE PRODUCTION CUM DISPAT CH REGISTER KEPT AS PER PROVISIONS OF MINING ACT A COP Y OF WHICH WAS ALSO FURNISHED DURING THE COURSE OF HEARI NG. THE AO FURTHER OBSERVED THAT THE ASSESSEE ARGUED THAT T HERE CANNOT BE EXCESS STOCK OF BLOCK AT MINE AS THE ASSE SSEE WAS NOT MAKING ANY PURCHASE IS ALSO COMPLETELY BASELESS BECAUSE THE MARBLE BLOCKS ARE EXCAVATED BUT NOT ENT ERED IN THE STOCK REGISTER IF THE INTENTION TO SOLD THEM IS WITHOUT DISCLOSING THEM IN THE BOOKS OF ACCOUNTS. A S REGARDS THE AFFIDAVIT OF THE ASSESSEE DATED 19.11.2 006 FILED BEFORE THE AO, THE AO HAS STATED THAT SUCH AFFIDAVI T IS NOTHING BUT A SELF SERVING STATEMENT OF THE ASSESSE E AFTER 16 24 MONTHS OF TIME SINCE THE DATE OF SURVEY ON HIS M INE AND THAT THE CONTENTS OF THE AFFIDAVIT ARE NOT SUPPORTE D BY ANY COGENT EVIDENCES. IT IS STATED THAT SUCH AFTERTHOUG HT OF THE APPELLANT IS PROVED FROM THE FACT THAT NO SUCH OBJE CTIONS WERE RAISED AT THE TIME OF INVENTORIZATION OF PHYSI CAL STOCK OF WHITE MARBLE BLOCKS AS ALSO DURING POST SEARCH INVESTIGATION BEFORE THE DDIT(INV), UDAIPUR. IT IS ALSO STATED THAT AT THE TIME OF SURVEY U/S 133A SH. UMES H LOHAR S/O SH. BHERU LAL LOHAR WAS HIMSELF PRESENT AT THE MINE AND HE NEVER RAISED SUCH POINT/ OBJECTION THAT THE SURVEY OFFICER HAS TAKEN THE STOCK OF BLASTED MARBLE ROCK ALSO IN ADDITION TO THE FINISHED MARBLE BLOCKS / MARKETABLE BLOCKS LYING IN THE MINES. THE AO HAS ALSO REFERRED TO THE RELEVANT QUESTION/ ANSWER OF SH. UMESH LOHAR VIDE H IS STATEMENT RECORDED ON 11.12.2003 WHEREIN, IN QUESTI ON NO. 6 HE ADMITTED THAT ON THE MINE MARBLE BLOCKS ARE EXCAVATED WHICH ARE SOLD ON THE MINE ITSELF. AS REG ARDS THE CLAIM OF THE ASSESSEE THAT THE PRODUCTION CUM DISPA TCH REGISTER WAS CERTIFIED BY THE ASSTT. MINING ENGINEE R, AMET, THE AO HAS STATED THAT SUCH CLAIM IS EXAGGERATED IN AS MUCH AS NO DAY TO DAY OR MONTH TO MONTH PRODUCTION FOR ENTIRE FINANCIAL YEAR WAS CERTIFIED OR CHECKED BY T HE ASSTT. MINING ENGINEER OR DEPUTED PERSON AND THE MINING EN GINEER HAS PUT HIS SEAL AND SIGNATURE ON OPENING PAGE AND FIRST PAGE OF PRODUCTION CUM DISPATCH REGISTER OF THE MIN E JUST TO CERTIFY THE OPENING OF THE PRODUCTION CUM DISPAT CH REGISTER OF THE MINE. AS PER THE AO THE MINING ENGI NEER HAS NOT CERTIFIED EACH AND EVERY ENTRY OF PRODUCTIO N 17 RECORDED BY THE ASSESSEE AND THE ALLEGED PRODUCTION CUM DISPATCH REGISTER WAS MAINTAINED FOR ONLY PURPOSE O F PAYING ROYALTY CHARGES AND DEAD RENT TO THE MINING DEPARTMENT. IN VIEW OF THESE FACTS THE A.O. CAME T O THE CONCLUSION THAT EXCESS STOCK FOUND AND VALUED AT RS . 530570/- STILL REMAINED UNEXPLAINED AND DURING THE PRESENT PROCEEDINGS ALSO THE ASSESSEE HAS FAILED TO PROVE THAT SUCH EXCESS STOCK WAS WRONGLY TAXED. 2.5 AFTER CONSIDERING RIVAL SUBMISSIONS WE HAVE FOU ND FROM THE RECORDS THAT THIS IS A CASE OF MARBLE MINING AND DU RING SURVEY PROCEEDINGS, ON THE MINING ITSELF ON 11.12.2003, IN VENTORY OF STOCK WAS PREPARED AND 8906 CFT STOCK OF MARBLE BLOCKS WAS FO UND EXCESS WHICH WAS VALUED AT RS. 530570/-. THE MAIN CONTENTION OF THE ASSESSEE IS THAT UNEVEN MARBLE ROCKS, WHICH WERE OF WASTE IN NA TURE, HAVE BEEN INCLUDED IN THE INVENTORY OF STOCK AND THIS STOCK, IN FACT, HAS NO VALUE. THE ASSESSEE HAS ALSO RELIED ON THE MAINTENANCE REG ISTER OF MINING IN WHICH DETAILS OF FINISHED MARBLE ROCKS IS RECORDED. IN THAT REGISTER, THIS STOCK IS NOT FOUND RECORDED. ON OVERALL EXAMINATION , IT IS FOUND THAT THE PRODUCTION REGISTER ITSELF HAS INDICATED THAT S UCH A STOCK WAS OF WASTE NATURE AND WAS NOT A PART OF MARKETABLE LOT. THE ASSESSEE HAS ALSO FILED HIS AFFIDAVIT IN SUPPORT OF THE ABOVE FA CT, WHICH REMAINED UNCONTROVERTED. SINCE THE STOCK WAS TAKEN AT THE SI TE OF MARBLE 18 MINING, SO THERE IS EVERY POSSIBILITY OF SUCH A MIS TAKE. THE EVIDENCES REFERRED TO BY THE LD. AR ALSO SUPPORT ASSESSEES C ONTENTION. THEREFORE, WE HOLD ACCORDINGLY AND TAKE THE VALUE O F THIS STOCK AT NIL BEING WASTE AND NOT MARKETABLE. WE DELETE THIS ADDI TION AND ALLOW THE APPEAL. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 RD SEPTEMBER, 2013. VL/ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT BY ORDER 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR
