M/s. Jai Shree Ram Stone Crusher (I) Pt. Ltd, Nainital V. DCIT, Nainital

ITA 348/DEL/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7016 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 29-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `D: NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER I.T. A. NO.348/DEL/2009 ASSESSMENT YEAR : 2005-06 M/S. JAI SHREE RAM STONE CRUSHERS DY. COMMISSIONER OF INCOME-TAX, (I) PVT. LTD., VS. HALDWANI DISTT. NAINITAL. RAMPUR ROAD, HALDWANI DISTT. NAINITAL, (UTTARAKHAND) PAN: AABCJ2477L (APPELLANT) (RESPONDENT ) APPELLANT BY : SHRI TARUN KUMAR, ADVOCATE RESPONDENT BY : MS. Y. KAKKAR, DR. O R D E R PER C.L. SETHI, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 1 4.10.2008 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN THE MATTER OF AN ASSESSMENT MADE UNDER SEC.143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT) BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2005- 06. 2. IN THIS APPEAL, THE ASSESSEE HAS ASSAILED THE CI T(A)S ORDER IN CONFIRMING THE FOLLOWING ADDITIONS MADE BY THE ASSE SSING OFFICER:- (1) RS.19,79,284/- ON ACCOUNT OF ILLEGAL TRANSPORTATION (UNDISCLOSED SALES). 2 (2) RS.1,71,309/- ON ACCOUNT OF ILLEGAL STOCK . (3) RS.25,000/- ON ACCOUNT OF COMPOUNDING FEES FOR ILLE GAL MINING IMPOSED BY DISTRICT MAGISTRATE, NAINITAL. 3. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE ORDERS OF THE AUTHORITIES BELOW. 4. THE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTU RING OF STONE GRITS AND DARA (MIXTURE OF SMALL STONES AND STONE DUST FR OM BOULDERS AND STONE). THESE BOULDERS AND STONES WERE EXTRACTED FROM GOLA RIVER FROM HALDWANI AFTER ACQUIRING RIGHTS FROM FOREST DEPARTMENT OF UT TRANCHAL GOVERNMENT. IN THE INSTANT CASE, A SURVEY WAS CONDUCTED AGAINST TH E ASSESSEE BY THE FOREST DEPARTMENT/PWD AND REVENUE DEPARTMENT OF UTTRANCHAL GOVERNMENT. ON THE BASIS OF MATERIAL FOUND DURING SURVEY, THE DIST RICT MAGISTRATE, NAINITAL PASSED AN ORDER ON 19.03.2005 HOLDING THAT DURING T HE YEAR THE ASSESSEE HAD DONE ILLEGAL TRANSPORTATION AND MADE UNDISCLOSED SA LES OF 17182.13 CUBIC MT. OF MINERALS. IT WAS ALSO HELD BY THE DISTRICT MAGISTRATE THAT THE ASSESSEE HAD SHOWN ILLEGAL MINING OF 13660 CUB MT. AND THE A SSESSEE WAS HAVING ILLEGAL STOCK OF 2060 CUB MT. OF STONE, WHICH WAS B ROUGHT FROM GOLA RIVER. IN THE LIGHT OF THE FINDINGS GIVEN BY THE DISTRICT MAGISTRATE, THE AO MADE THE FOLLOWING, AMONGST OTHERS, ADDITIONS:- (1) ADDITION OF RS.19,79,284/- ON ACCOUNT OF ILLEGAL TR ANSPORTATION MAKING UNDISCLOSED SALES OF 17182.13 CUB MT. OF STO NE GRIDS. 3 (2) ILLEGAL STOCK OF RS.1,71,309/-. (3) PAYMENT OF COMPOUNDING FEES/PENALTY OF RS.25,000/-. 5. ON AN APPEAL, THE CIT(A) CONFIRMED THE AOS ACTI ON AND CONFIRMED THE AFORESAID THREE ADDITIONS MADE BY THE AO. WHI LE CONFIRMING THE ADDITIONS, THE LEARNED CIT(A) HAS OBSERVED THAT HE FOUND NO OTHER FRESH MATERIALS TO DIFFER FROM THE FINDINGS GIVEN BY THE AUTHORITY OF DISTRICT MAGISTRATE, NAINITAL INCLUDING THE REPORT GIVEN BY THE MINING OFFICER AND JOINT ENQUIRY COMMITTEE. 6. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. IN THE COURSE OF HEARING OF THIS APPEAL, THE LEA RNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IDENTICAL ISSUE HAD COM E FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF M/S. UTTARAKHAND STONE PRODUCTS PVT. LTD., HALDWANI IN ITA NO.347/DEL/2009, WHERE ITAT, NEW DE LHI BENCH `H VIDE ORDER DATED 26 TH APRIL, 2010, HAS RESTORED THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION. IT WAS FURT HER POINTED OUT THAT IN THE CASE OF M/S. KRISHNA STORE INDUSTRIES PVT. LTD. VS. DCIT (ITA NO.419/DEL/2009), IDENTICAL MATTER HAS BEEN RESTORE D BACK TO THE FILE OF THE AO BY ITAT, DELHI BENCH `D, NEW DELHI VIDE ORDER D ATED 23.12.2009. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER MADE A STATEMENT AT THE BAR THAT THE ORDER PASSED BY THE DISTRICT MAGISTRATE, NAINIT AL IS SUBJECT TO AN APPEAL 4 BEFORE THE HIGHER AUTHORITY AND THE MATTER IS STILL PENDING AND HAS NOT ATTAINED THE FINALITY. 8. THE LEARNED DR ON THE OTHER HAND, RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. 10. IN THE CASE OF M/S. UTTARAKHAND STONE PRODUCTS PVT. LTD., THE AO MADE CERTAIN ADDITIONS ON ACCOUNT OF ILLEGAL MINING AND UNDISCLOSED STOCK IN THE LIGHT OF THE ORDER OF THE DISTRICT MAGISTRATE, NAINITAL, DATED 19.03.2005. THE TRIBUNAL AFTER HEARING BOTH THE PARTIES, RESTOR ED THE MATTER BACK TO THE FILE OF THE AO FOR RE-ADJUDICATION VIDE ORDER DATED 26 TH APRIL, 2010. IT RUNS AS UNDER:- 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORDS CAREFULLY. NO DOUBT THERE WAS S URVEY BY THE FOREST DEPARTMENT, REVENUE DEPARTMENT AND PWD OF TH E STATE OF UTTARAKHAND. BUT THE PROCEEDINGS ARISING FROM S UCH SURVEY FOR THE PURPOSE OF DETERMINING THE VIOLATION OF THE TERMS OF LEASE AGREEMENT ETC. HAVE NOT ATTAINED FINALITY. T HE PENALTY IMPOSED BY THE LD. DISTRICT MAGISTRATE, NAINITAL FO R SUCH VIOLATION IS UNDER CHALLENGE BEFORE THE DIVISIONAL COMMISSIONER, NAINITAL. THUS, THE INFORMATION IN T HE SHAPE OF ANY CORROBORATIVE EVIDENCE CONSIDERED BY THE A.O. F OR CHARGING THE ASSESSEE WITH HAVING EXCESS STOCK IS PREMATURE INFORMATION. CONSIDERING THIS ASPECT, WE SET ASIDE THIS ISSUE TO THE FILE OF THE A.O. FOR RE-ADJUDICATION. HE SHALL TAKE INTO CONSI DERATION THE OUTCOME OF SURVEY CARRIED OUT BY THE AUTHORITIES OF THE STATE GOVERNMENT AS CORROBORATIVE PIECE OF EVIDENCE AND T HEN DETERMINE THE ISSUE WHETHER THE ASSESSEE HAS EXCESS TOCK OR NOT AT THE END OF THE ACCOUNTING YEAR. THIS INFORMATIO N RECEIVED FROM THE STATE GOVERNMENT WOULD BE THE INFORMATION, WHICH 5 COMES OUT AFTER THE DETERMINATION OF ISSUE IN PURSU ANCE OF THE ORDER OF DIVISIONAL COMMISSIONER, NAINITAL. NEEDLE SS TO SAY THAT OBSERVATION MADE BY US WILL NOT IMPAIR OR INJU RE THE CASE OF THE A.O. OR WOULD CAUSE ANY PREJUDICE TO THE DEF ENSE/ EXPLANATION OF THE ASSESSEE IN THE FRESH PROCEEDING S. THE A.O. SHALL AFFORD DUE OPPORTUNITY OF HEARING TO THE ASSE SSEE. 11. SIMILARLY, IN THE CASE OF M/S. KRISHNA STORE INDUSTRIES PVT. LTD., THE ADDITION MADE BY THE A.O. ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SURVEY AND IN THE LIGHT OF DISTRICT MAGISTRATE, NAINITALS ORDER DATED 19.03.2005, HAS BEEN RESTORED BACK TO THE FILE OF T HE AO BY THE TRIBUNAL VIDE ORDER DATED 23.12.2009 FOR FRESH ADJUDICATION. 12. IN THE LIGHT OF THE AFORESAID TRIBUNALS ORD ERS IN THE CASES BASED ON IDENTICAL FACTS, WE ARE INCLINED TO RESTORE THE ISS UES INVOLVED IN THIS APPEAL BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATI ON AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AND IN THE LIGHT OF THE OBSERVATIONS MADE BY THE ITAT IN THE CASES OF M/S. UTTARAKHAND STONE PRODUCTS PVT. LTD. AND M/S. KRISHNA STORE INDUSTRI ES PVT. LTD. WE ORDER ACCORDINGLY. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSE E IS TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 14. THIS DECISION WAS PRONOUNCED IN THE OPEN CO URT IMMEDIATELY AFTER THE HEARING WAS OVER ON 26 TH SEPTEMBER, 2011. SD/- SD/- (A.N. PAHUJA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH SEPTEMBER, 2011. 6 ITA NO.348/DEL/2009 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.