Asst. Commissioner of Income tax, Belgaum V. Sri B. P. Anand Kumar Singh, Belgaum

ITA 387/PAN/2013

• Counselvise Citation: 38724114 RSA 2013
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B BARTHAKUR LD
• Keywords: Search and seizure; Principle of natural justice
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 387/PNJ/2013 (ASSESSMENT YEAR - 2008 - 09) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, BELGAUM. (APPELLANT) VS. SRI B P ANAND KUMAR SINGH, 5/805, ANAND NILAYA, K R ROAD, RANIPET, HOSPET - 583201. PAN:AFPPA4580F (RESPONDENT) APPELLANT BY : SHRI B. BARTHAKUR, LD. DR. RESPONDENT BY : SHRI S. PARTHASARATHI, ADV. DATE OF HEARING : 05/08 /2014 DATE OF PRONOUNCEMENT : 17 / 1 0 /2014 O R D E R PER: D.T. GARASIA (JM) THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT AGAINST THE ORDER OF CIT(A) - VI , BELGAUM DATED 19 TH SEPTEMBER, 2013 FOR ASSESSMENT YEAR 2008 - 09. 2. THE ONLY ONE GROUND IS RAISED BY THE DEPARTMENT WHICH READ AS UNDER . WHETHER LD. CIT(A) IS JUSTIFIED IN DELEING THE ADDITION OF RS. 18,68,91,291/ - TOWARDS UNRECOR DED SALES MADE BY THE ASSESSEE. 2.1. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF MINING AND LOGISTIC. A SEARCH U/S. 132 OF I.T. ACT WAS CARRIED OUT ON 25.03.2009 IN THE CASE OF THE APPELLANT. THE APPELLANT IS ENGAGED IN THE GROUP CASES OF SHRI B.P. ANANDKUMAR SINGH OF HOSPET. DURING THE COURSE OF SEARCH ACTION IN THE CASE OF SHRI RAVI KALYAN REDDY, CONDUCTED ON 26.10.2007 , DOCUMENTS INDICATING CASH PAYMENTS OF RS. 2.55 CRORES MADE BY M/S. VYSHNAVI MINERALS T O M/S R.K. MARKETING SERVICING ON ACCOUNT OF MINING ACCOUNT WERE SEIZED. DURING THE 2 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH COURSE OF POST SEARCH INVESTIGATION, IN THE CASE OF SHRI RAVI KALYAN REDDY, STATEME NT OF SHRI ANAND KUMAR SINGH, PROP. OF M/S VYSHANAVI MINERALS WAS RECORDED. DURING THE COURSE OF STATEMENT THE SHRI ANAND KUMAR SINGH HAS DENIED TO HAVE MADE ANY CASH PAYMENT TO M/S. R.K. MARKETING BY M/S VYSHANVI MINERALS, BUT THE BOOKS OF ACCOUNTS WERE COMPARED WHEREIN CHEQUE PAYMENT OF RS. 20 LAKHS WAS SEIZED MATERIALS WAS MATCHING WITH THE ENTRIES WITH THE BOOKS OF ACCOUNT OF R.K. MARKETING SERVICES WITH REFERENCE TO VYSHNAVI MINERALS BUT THE CASH PAYMENT WAS NOT REFLECTED IN BOOKS OF ACCOUNTS OF M/S. VYSHNAVI MINERALS SERVICES. AFTER ENQUIRY THE ASSESSEE ADMITTED THAT HE HAS MADE CASH PAYMENT OF RS. 2.55 CRORES TO M/S. R.K. MARKETING SERVICES. DURING THE COURSE OF SEARCH IT WAS FOUND AND ADMITTED FACT THAT MR. R.K. REDDY PARTNER OF M/S. R.K. MARKETI NG SERVICES WAS SERVICE PROVIDER TO THE ASSESSEE M/S. VYSHNAVI MINERALS AND IT HAS BEEN GATHERED DURING PERIOD RELEVANT TO ASSESSMENT 2008 - 09 M/S. R.K. MARKETING SERVICES HAS RAISED FOLLOWING BILLS IN RESPECT OF EXTRACTION OF IRON ORES FOR M/S. VYSHNAVI MI NERALS. THE SUMMARY OF THE SAME IS GIVEN AS UNDER: - SL. NO . INVOICE NO. & DATE PERIOD ROM FINES C ORE TOTAL QTY. RATE PER MT AMOUNT 1 01 - 03/04/07 20/04/07 TO 30/04/07 23826.500 0 8118.610 8118.610 172 1396401 2 02 - 10/05/07 01/05/07 TO 10/05/07 4547.850 18924.95 0 3777.810 22702.760 172 3904874 3 03 - 20/05/07 11/05/07 TO20/05/0 7 20567.250 7209.910 2258.470 9468.380 172 1628562 4 04 - 31/05/07 21/05/07 TO 31/05/07 22435.270 6448.050 4495.190 10943.240 172 1882238 5 05 - 15/06/07 01/06/07 TO 30/06/07 41553.150 13431.50 0 6841.150 20272.240 172 3486896 6 06 - 30/06/07 16/06/07 TO 30/06/07 25961.290 10168.94 0 6271.320 16440.260 172 287725 7 07 - 01/07/074 22078.510 17745.20 2914.230 20659.430 172 3553422 3 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH 15/07/07 TO 15/07/07 0 8 08 - 31/07/07 16/07/07 TO 31/07/07 40640.270 17004.37 0 12528.350 29532.720 172 5079628 9 09 - 16/08/07 01/08/07 TO 15/08/07 24468.280 9804.010 20725.510 30529.520 172 5251077 TOTAL 226078.370 100736.9 30 67930.640 168667.570 2901082 3 PRODUCTION AT MINES SL. NO. INVOICE NO.& DATE PERIOD FINES C ORE TOTAL QTY. RATE PER MT AMOUNT 1 05 - 15/06/07 01/06/07 TO 15/06/07 4128.960 344.370 4473 .330 140 626266 2 06 - 03/06/07 16/06/07 TO 30/06/07 10022.640 1287.590 11310.230 140 1583432 3 07 - 15/07/07 01/07/07 TO 15/07/07 3775.030 871.650 4646.680 140 650535 4 08 - 31/07/07 16/07/07 TO 31/07/07 3475.040 370.390 3845.430 140 538360 21401.670 2874.000 24275.670 3398593 PRODUCTION AT DANAPUR PLOT SL. NO. INVOICE NO. & DATE PERIOD FINES C ORE LUMPS TOTAL QTY. RATE PER MT AMOUNT 1 05 - 15/06/07 01/06/07 TO 15/06/07 724.830 0 3517.13 42 41.960 70 296937 2 06 - 30/06/07 16/06/07 TO 30/06/07 2056.82 0 0 2056.82 70 143977 3 08 - 31/07/07 16/07/07 TO 31/07/07 5338.800 0 0 5338.800 72 384394 4 09 - 16/08/07 01/08/07 TO 15/08/07 12372.830 4171.390 0 16544.220 72 1191184 5 10 - 16/08/07 01/06/07 TO 31/07/07 21401.670 2874.000 0 242 75.670 32 776821 THERE WAS SURVEY ACTION U/S. 133A IN THE MINES OF M/S. S.B. MINERALS AT VYASANKERE, WHEREIN THE DOCUMENTS CONTAINING DETAILS OF PRODUCTION OF IRON ORE FOR THE PERIOD 1.4.2007 TO 31.03.2007 WERE FOUND AND IMPOUNDED. ON ACCOUNT OF DISCREPANCIES NOTICED THERE IN AS COMPARED TO THE REPORTS SUBMITTED TO THE MINES 4 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH AND GEOLOGY DEPARTMENT. THE ASSESSEE ADMITTED THAT HE HAS NOT SHOWN THE PRODUCTION OF 940831.330 MT IS NOT REFLECTED IN THE BOOKS OF ACCOUNT AND THE SAME IS OWNED UP IN THE HANDS OF M/S. VYSHNAVI MINERAL S FOR ASST. YEAR 2008 - 09. THEREFORE, THE ASSESSING OFFICER TRIED TO VERIFY WHETHER THE STOCK DISCREPANCY NOTICED AS ABOVE IS INCLUSIVE OF THE PRODUCTIONS EFFECTED THROUGH M/S. R.K. MARKETING AS TABULATED ABOVE. THE ASSESSEE WAS REQUESTED TO IDENTIFY THE ST OCK VIS - A - VIS THE INVOICES OF M/S. R.K. MARKETING MENTIONED IN THE ABOVE CHARTS AND RECONCILE THE SAME. THE ASSESSEE WAS REQUESTED TO PRODUCE THE BILLS BY M/S. R.K. MARKETING AND INVOICES OF THE ASSESSEE. M/S. R.K. MARKETING HAS NOT INCLUDED IN THE ADMITT ED DIFFERENCE OF 940831.330 MT WHY IT SHOUL D NOT BE ADDED IN HANDS OF THE M/S. VYSHNAVI MINERALS. THE ASSESSEE CONTENDED BEFORE AO THAT IN NORMAL IRON ORE INDUSTRY CERTAI N LUMPS OF FINES ARE ALWAYS MIS INTERPRETED OR WHILE BILLING FINES MAY BE BILLED AS LUM PY OR LUMPY MAY BE BILLED AS FINES. THERE WAS UNDERSTANDING BETWEEN ASSESSEE AND SERVICE PROVIDER. THE SERVICE PROVIDER HAS BEEN CLAIMED BILLS FOR THE QUALITY OF IRON ORES DISPATCHED/ KEPT AS FINISHED PRODUCT FOR DISPATCH AT MINES. M/S. R.K. MARKETING HAS BILLED TO THE ASSESSEE F OR THE SERVICES PROVIDED AT RS. 172/ - PER MT WHICH INCLUDED ROM PRODUCTION AND CRUSHING AND SCREENING OF LUMPS AND FINES. THEREFORE, QUALITY OF ROM PRODUCTION HAS NOT MENTIONED IN THE BILLS SUBMITTED BY M/S. R.K. MARKETING. THE SEC OND CONTENTION THAT PRODUCTION OF ROM AS PER PRODUCTIO N REGISTERED IS HIGHER THAN THE QUALITY MENTIONED IN THE LETTER MAY NOT BE CONTENDED FURTHER MORE QUANTITY, THEREFORE, THERE IS DIFFERENCE. THE ASSESSEE HAS PREPARED THE RECONCILIATION STATEMENT WHICH I S AS UNDER: SL. NO . INVOICE NO. & DATE PERIOD ROM SEIZED MTRL. REF. FINES SEIZED MTRL. REF. C - ORE SEIZED MTRL. REF. 1 01 - 03/04/07 20/04/07 TO 30/04/07 23826.500 1 0 NA 8118.610 MATERIAL NOT AVAILALE 2 02 - 10/05/07 01/05/07 TO 10/05/07 4547.850 2 18924.950 3&4 3777.810 3 5 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH 3 03 - 20/05/07 11/05/07 TO20/05/0 7 20567.250 2 7209.910 4&6 2258.470 4 04 - 31/05/07 21/05/07 TO 31/05/07 22435.270 2 6448.050 6 4495.190 6 5 05 - 15/06/07 01/06/07 TO 30/06/07 41553.150 10 13431.500 13 6841.150 6 06 - 30/06/07 16/06/07 TO 30/06/07 25961.290 10 10168.940 13 6271.320 13 7 07 - 15/07/07 01/07/074 TO 15/07/07 22078.510 18 17745.200 21 2914.230 21 8 08 - 31/07/07 16/07/07 TO 31/07/07 40640.270 18 17004.370 21 12528.350 21 9 09 - 16/08/07 01/08/07 TO 15/08/07 24468.280 25 9804.010 28 &31 20725.510 28 & 31 TOTAL 226078.370 100736.930 67930.640 ANNEXURE - II PRODUCTION AT MINES . SL. NO. INVOICE NO.& DATE PERIOD FINES SEIZE D MTRL. REF. C - ORE SEIZED MTRL. REF. 1 05 - 15/06/07 01/06/07 TO 15/06/07 4128.960 11 344.370 11 2 06 - 03/06/07 16/06/07 TO 30/06/07 10022.640 12 1287.590 12 3 07 - 15/07/07 01/07/07 TO 15/07/07 3775.030 20 871.650 20 4 08 - 31/07/07 16/07/07 TO 31/07/07 3475.040 20 370.390 20 21401.670 2874.000 ANNEXURE - III PRODUCTION AT DANAPUR PLOT SL. NO. INVOICE NO. & DATE PERIOD FINES SEIZED MTRL. REF. C ORE SEIZED MTRL. REF. LUMPS SEIZED MTRL. REF. 1 05 - 15/06/07 01/06/07 TO 15/06/07 724.830 16 3517.13 15 2 06 - 30/06/07 16/06/07 TO 30/06/07 2056.82 16 3 08 - 31/07/07 16/07/07 TO 31/07/07 5338.800 19 4 09 - 01/08/07 12372.830 26 4171.390 26 6 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH 16/08/07 TO 15/08/07 5 10 - 16/08/07 01/06/07 TO 31/07/07 21401.670 AS PER ANNEXURE II 2874.000 AS PER ANNEXURE II THE ASSESSING OFFICER HAS VERIFIED THE RECONCILIATION STATEMENT AND HE WAS OF THE VIEW THAT THE R.K. MARKETTING SERVICES HAS RAISED EXTRA PRODUCTION WHICH HAS BEEN SOLD OUTSIDE THE BOOKS OF THE ACCOUNT , T HEREFORE, THERE IS SOME DIFFERENCE OF QUANTITY . THE ASS ESSING OFFICER HAS WORKED OUT THE DIFFERENCE BY EXCLUDING THE PRODUCT ION AT DANAPUR PLOT FOR THE PERIOD OF 1.6.2007 TO 31.7.2009 AND HE MADE THE ADDITION OF RS. 18,68,91,291/ - BY SHOWING THE FOLLOWING THE TABLE. SL. N. PERIOD INVOICE NO./DATE FINES (IN MT) RATE RS. (PER MT) AMOUNT (RS.) C - ORE (IN MT) RATE (PER MT) AMOUNT (RS.) 1 20/04/2007 TO 30/04/2007 01 30/04/07 -- -- - 8116.600 800 6494888 3 01/05/07 TO 10/05/07 02 10/05/07 18924.950 800 15139960 3777.810 900 34400029 4 11/05/07 TO 20/05/07 03 20/05/07 7209.910 800 5767923 2258.470 900 2032623 5 21/05/07 TO 31/05/07 04 31/05/07 6448.050 800 5158440 4495.190 900 4045671 6 01/06/07 TO 15/06/07 05 15/06/07 13431.500 800 10745200 6841.150 1000 6841150 7 16/06/07 TO 30/06/07 06 30/06/07 10168.940 800 8135152 6271.320 1000 6271320 8 01/06/07 TO 30/06/07 05 15/06/07 724.830 800 579864 3517.130 1000 3517130 9 16/06/07 TO 30/06/07 06 30/06/07 2056.820 800 1645456 -- -- - ---- 10 01/07/07 TO 15/07/07 07 15/07/07 17745.200 800 14196160 8914.200 1050 3059941 11 16/07/07 TO 31/07/07 08 31/07/07 17004.370 800 13603496 12528.350 1050 1315467 12 16/07/07 TO 31/07/07 08 31/07/07 5338.800 800 4271040 -- -- ----- 13 01/08/07 TO 15/08/07 09 16/08/07 9804.010 800 7843208 20725.510 1050 21761785 14 01/08/07 TO 15/06/07 09 16/08/07 12372.830 800 9898264 4171.390 1050 4379959 15 01/06/07 TO 31/07/07 10 16/08/07 21401.620 800 17121296 2874.000 1050 3017700 TOTAL 10,89,14,328 7,79,76,96 3 7 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH 2.2 . THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER: THE THIRD ISSUE IS WITH REGARD TO THE UNRECORDED SALES OF IRON ORE OF RS.18,68,91,291/ - MADE BY THE APPELLANT, WHICH WAS RESISTED BY THE APPELLANT VIDE HIS LETTER DATED 10.12.2009. A COPY OF THE LETTER IS ENCLOSED TO THIS SUBMISSION. THE ASSESSING OFFICER HAS ADDED A SUM OF RS.18,68,91,291 TO THE RETURNED INCOME FOR THE REASON THAT THE QUANTITY OF IRON ORE PRODUCED BY M/S.R.KMARKETING SERVICES FOR THE APPELLANT IS S OLD OUTSIDE BOOKS OF ACCOUNTS. IT IS SUBMITTED THAT THE APPELLANT IS A TRADER IN IRON ORE AND DOING CONTRACT OF IRON ORE PRODUCTION/EXCAVATION/CRUSHING AND SCREENING UNDER THE TRADE NAME OF M/S. VYSHNAVI MINERALS. THE APPELLANT HAS WORK CONTRACT FOR IRON O RE EXCAVATIO N, CRUSHING AND SCREENING WITH VYSHNAVI IRON ORE MINES OF M/S.S.B.MINERALS. THE APPELLANT DOES NOT OWN THE REQUISITE MACHINERIES AND HAS HIRED EQUIPMENTS FROM M/S.MAJKE, SERVICES. NOW IT FOLLOWS THAT THE APPELLANT RECEIVES SERVICES F ROM M/S.MAR KETING SERVICES AND THE SAME SERVICES WAS AGAIN BILLED TO M/S S B MINERALS. IN THEIR SUBMISSI ONS DATED 20.08.2013, THE APPELL ANT HAS STATED AS UNDER: DURING SEARCH OPERATIONS ON N/S. R. K. MARKET ING SERVICES CERTAIN PRODUCTION DETAILS WERE FOUND RELATING TO M/S. VYSHNAVI MINERALS, HOSPET. THE ASSESSING OFFICER HAS SERVED A LETTER DATED 09.12.2009 GIVING THE QUANTITY OF IRON ORE PRODUCED BY M/S.R.K.MARKETING SERVICES AND WAS ASKED TO RECONCILE THE SAME WITH THE BOOKS OF ACCOUNTS. THE APPELLANT VIDE HIS LET TER DATED 11.12.2009 REPLIED THAT THE QUANTITIES AS PER LETTER DATED 09.12.2009 ARE PART AND PARCEL OF ROUTING BILLS SUBMITTED BY M/S.R.K.MARKETING SERVICES. HERE, IT WAS SUBMITTED THAT THE STEPS INVOLVED IN PRODUCTION OF IRON ORE ARE AS UNDER: 1) EXTRACTI ON OF WASTE, REMOVING OF ORE FROM REEF AFTER DRILLING AND BLASTING AND THE RESULTANT ORE IS CALLED AS ROM. 2) ROM WHICH WILL BE IN THE FORM OF BOULD ERS AND DIFFERENT SIZES OF POWER IS REQUIRED TO BE CRUSHED AND SCREENED. 3) THE PROCESS OF CRUSHING AND SC REENING IS NORMALLY DONE OUT OF MINING AREA OR ANY SUCH OTHER AREA WHERE THE MINE OWNER PROVIDES NECESSARY FACILITIES. IN THE APPELLANTS CASE, THE ACTIVITY HAS BEEN DONE IN THE MINING AREA OF VYSANAKERI AND THE IRON WAS ALSO DUMPED IN THE MINING PLOT VIZ ., DANAPUR PLOT IN ADDITION TO VYSANAKERI. THERE WAS NO MINING IN DANA PUR. AS STATED EARLIER, THE ORE RAISED IN VYSANAKERI IRON 8 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH ORE MINES BELONGED TO S. B. MINERALS AND THE APPELLANT HAS RECONCILED THE ORE SUPPLIED S.B.MINERALS BY THE APPELLANT WITH THE P RODUCTION DECLARED BY R.K.MARKETING SERVICES. THUS, THE RECORDS FURNISHED WOULD SHOW THAT THE ORE PRODUCED BY R.K.MARKETING SERVICES IN THEIR VYSANAKERI MINES AND THE QUANTITY SUPPLIED HAD BEEN FULLY RECONCILED AND IF THE SAME HAD BEEN ACCOUNTED IN THE ACC OUNTS OF S.B.MINERALS, THEN THERE WAS NO ADDITIONAL ORE AVAILABLE TO THE APPELLANT TO SELL AND THUS THERE WAS NO SUPPRESSION OF SALE AS ALLEGED BY THE ASSESSING OFFICER. IN FACT, APART FROM THE STATEMENT OF R.K.MARKETING SERVICES, THERE WAS NO OTHER MATERI AL TO SUGGEST EXCESS PRODUCTION OF ORE AND THE STATEMENT OF R.K.MARKETING SERVICES HAD BEEN FULLY EXPLAINED AND RECONCILED. FURTHER, IT IS SUBMITTED THAT THE APPELLANT WAS DOING IRON ORE RAISING CONTRACT IN VYSANAKERI IRON ORE MINES OF S.B.MINERALS, HOSPET . DURING THE SURVEY PROCEEDINGS UNDER SECTIONL33A OF THE ACT AT VYSANAKERI IRON ORE MINES OF S.B.MINERALS, BOOKS PERTAINING TO PRODUCTION FIGURES WERE SEIZED AND ALSO WHILE ANALYZING THE PRODUCTION REGISTER IT WAS NOTICED THAT THERE WAS EXCESS PRODUCTION O F IRON ORE BY 9,40,891.22 MTS I.E., THE DIFFERENCE BETWEEN AS PER IBM RECORDS AND TO THAT THE SEIZED PRODUCTION REGISTER. FURTHER, 9,40,891.33 MTS OF IRON ORE PRODUCED, WHICH WAS KEPT IN MINING AREA WOULD BE DECLARED AS STOCK LYING AT MINING AREA OF VYSANA KERI IRON ORE MINES OF S.B.MINERALS AND THE VALUATION WOULD BE DONE AT THE IRON ORE RAISING CHARGES THAT IS PAID TO THE APPELLANT AT RS.200/ - PER TONNE. IN THIS CONNECTION, THE APPELLANT UNDERTOOK TO ACCOUNT THE ENTIRE AMOUNT OF RS.18,81,78,200/ - (9,40,891 .33 X 200) AS ADDITIONAL IRON ORE RAISING REVENUE FOR THE FINANCIAL YEAR 2007 - 08 AND THE SAME HAS BEEN DECLARED IN THE RETURN FILED FOR THE ASSESSMENT YEAR 2008 - 09 UNDER THE HEAD INCOME DECLARED BEING THE DIFFERENCE BETWEEN IB M AND AS PER PRODUCTION REGIS TER, A COPY OF THE RETURN FILED FOR THE ASSESSMENT YEAR 2008 - 0 9 IS ENCLOSED. HERE, IT MAY ALSO BE APPRECIATED THAT THE ROLE OF APPELLANT IS JUST A SERVICE PROVIDER, WHOSE JOB IS TO EXCAVATE, CRUSHING & SCREENING AND TRANSPORT THE ORE FROM TOP OF THE BILL TO THE BOTTOM AND HAS NO RIGHT OVER THE GOODS. AS DISCUSSED ABOVE THE APPELLANT OR HIS REPRESENTATIVE HAVE NO RIGHT OVER THE GOODS TO REMOVE FROM THE MINING AREA ALTERNATIVELY ITS THE RIGHT OF THE MINE OWNER/LEASE HOLDER TO SELL THE IRON ORE PRODUCED BY THE APPELLANT. AS PER THE VARIOUS LAWS APPLICABLE TO MINING INDUSTRY THE MINE OWNER IS SOLE AUTHORITY TO REMOVE THE FINISHED PRODUCT FROM MINING AREA. ALSO, THE APPELLANT HAS SUBMITTED BEFORE THE ASSESSING OFFI CER THAT THE PRODUCTION IN DANA PUR PLOT IS NO T AN ADDITIONAL PRODUCTION IN MINES. THE ORE PRODUCED IN MINING AREA WAS KEPT IN THE SAID PLOT AND ALSO THE APPELLANT HAD DRAWN ATTENTION TOWARDS THE FIGURES OF PRODUCTION AT MINES, FINES, C - ORE TOTALS UPTO 24,275,67 MT. THE SAID FIGURE WAS AGAIN RECORDED IN DANAPUR PLOT FOR THE PERIOD OF 01.06.2007 TO 31.07.2007 IS EXCLUDED FROM THE QUANTITIES AND QUANTUM OF UNRECORDED SALES IN THE APPELLANTS HANDS WAS WORKED OUT AS PER CHART SHOWN AT PAGE NO.20 OF THE ASSESSMENT ORDER AND THE SAME WAS MARKED AS ANNEXURE - A (PART OF ASSESSMENT ORDER). THE SAID QUANTITIES WAS MOVED FROM THE MINING AREA TO DANAPUR PLOT AND ALSO THE APPELLANT HAD REQUESTED THE ASSESSING OFFICER TO DELETE THE SAID QUANTITIES FROM THE CONSOLIDATED QUANTITIES OF LUMPY AND FINES WHICH WAS STATED I N THE LETTER DATED 09.12.2009. WITHOUT APPRECIATING THE SAME, THE ASSESSING OFFICER MADE THE ADDITION ONCE AGAIN OF THE SAME 9 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH QUANTITY WHICH HAD ALREADY BEEN DECLARED IN THE RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 1 53C OF THE ACT. THUS, THE AD DITION MADE IS LIABLE TO BE DELETED. THE ACTION OF THE ASSESSING OFFICER IS ONLY ON MERE ASSUMPTION THAT THE SERVICE PROVIDER WHO DOES JOB WORK ON BEHALF OF THEIR PRINCIPLE HA S SOLD GOODS WITHOUT ANY BASIS. FURTHER, IT MAY BE APPRECIATED THAT THE APPELLANT HAD DECLARED IN THE RETURN FILED RS. 10 CRORES (AS EXPLAINED SUPRA) AND PS. 18,81,78,200/ - AS AGREED TO BE DECLARED IN THE SWORN STATEMENT GIVEN BY THE APPELLANT. WITHOUT APPRECIATING THE SAME, THE AO HAS MADE ADDITION ON THE BASIS OF LETTER SUBM ITTED BY R.K.MARKETING SERVICES AND THE SWORN STATEMENT GIVEN BY THE MD OF R.K.MARKETING SERVICES TO THE QUESTION NO.7 OF THE STATEMENT. ACCORDINGLY, THE AO HAS CALCULATED THE TOTAL VALUE OF UNRECORDED SALES AT RS.18,68,91,291/ - AND THE SAME HAS BEEN TREAT ED AS UNDI9CLOSED INCOME OF THE APPELLANT WITHOUT APPRECIATING THE SUBMISSIONS OF THE APPELLANT AND TREATED AS UNDISCLOSED INCOME OF THE APPELLANT, WHICH IS BAD IN LAW. A COPY OF STATEMENT AND DETAILED CHART IS ENCLOSED WITH THIS SUBMISSION WHEREIN IT IS C LEARLY SHOWN THAT THE APPELLANT HAD ALREADY DISCLOSED THE QUANTITY (THE BILLS RAISED BY R. K. MARKETING SERVICES) IN THE RETURN FILED. IT IS SUBMITTED THAT DURING THE COURSE OF SEARCH PRODUCTION REGISTER WAS SEIZED AND AS PER THE PRODUCTION REGISTER THERE WAS AROUND 9,40,831.33 MTS OF IRON ORE WAS SHOWN AS EXCESS PRODUCTION. AS PER THE AGREEMENT WITH S B MINERALS, THE CONTRACTOR WOULD BE PAID ONLY ON THE BASIS OF FINISHED IRON ORE WITHDRAWN FROM THE MINING AREA AN D THE ENTIRE QUANTITY OF IRON ORE SHOWN AS WORK - IN - PROGRESS AND THE CONTRACTOR HAD SUBMITTED A PROVISIONAL BILL FOR THE SAME AND THE SAME WAS SEIZED AT THE TIME OF SEARCH. WHEN ACTUAL SALE TAKES PLACE, THE SAME WAS RECORDED IN PRODUCTION REGISTER AND THE APPELLANT WAS ONLY A CONTRACTOR DOING THE WO RK OF PRODUCTION OF IRON ORE AND HE WAS IN NO WAY CONNECTED WITH THE STOCK LYING IN THE MINING AREA. THE APPELLANT HAS CLARIFIED THAT THE SAID QUANTITIES AS REFERRED TO IN THE AOS LETTER DATED 09.12.2009 FORM PART AND PARCEL OF THE QUANTITIES RECORDED IN SEIZED PRODUCTION REGISTER. RECONCILIATION OF T HE QUANTITIES AS PER AOS LETTER WAS DONE WITH THE COPY OF SEIZED PRODUCTION R E GISTER THE SAID PROD UCTION REGISTER WAS MAINTAINED BY VYSNAKERI IRON ORE MINES OF S. B. MINERALS. FURTHER, IT MAY BE APPRECIATED T HAT THE APPELLANT HAS DULY IDENTIFIED THE SAID QUANTITY TABULATED IN THE AOS LETTER AND PROVED THAT THE SAME ARE FORMING AND PARCEL RECORDED IN SEIZED PRODUCTION REGISTER. HENCE, THE APPELLANT HAD DISCHARGED THE ONUS CAST UPON HIM IN THE FORM AND MANNER A S REQUIRED BY THE DEPARTMENT AND THAT TOO ADOPTING THE BASIS AS REQUIRED BY THE DEPARTMENT. WITHOUT APPRECIATING THE SUBMISSION OF THE APPELLANT, THE AO ON MERE SURMISE HAS MADE THE ADDITION AGAIN IN THE HANDS OF THE APPELLANT ON THE BASIS SWORN STATEMENT RECORDED FROM THE MD OF R.K.MARKETING SERVICES WITH REGARD TO THE ANSWER GIVEN TO QUESTION NO.7 OF THE STATEMENT WHEREIN THE MD HAS NOT STATED SPECIFICALLY STATED THAT THE SALES WERE OUT OF BOOKS OF ACCOUNT. FURTHER, THE AO HAS NOT GIVEN ANY OPPORTUNITY TO THE APPELLANT TO CROSS - EXAMINE D THE MD OF R.K.MARKETING SERVICES WHICH IS BAD IN LAW AND THE REASONS GIVEN BY THE AO IN HIS ASSESSMENT ORDER ARE INCOR RECT (AT PAGE 20 OF THE ORDER). 10 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH HERE, IT IS SUBMITTED THAT THE APPELLANT HAS CLEARLY MATCHED ALMOST ALL THE QUANTITIES AS PER SEIZED MATERIAL TO THAT OF QUANTITIES AS PER SEIZED PRODUCTION REGISTER. DURING THE COURSE OF ASSESSMENT THE APPELLANT HAS REQUESTED THE ASSESSING OFFICER TO FURNISH THE EVIDENCE THAT HE HAS TO PROVE THAT THE QUANTITY IN QUESTION IS S OLD OUTSIDE BOOKS OF ACCOUNTS. IN SPITE OF THE OBJECTIONS RAISED BY THE APPELLANT, THE ASSESSING OFFICER HAS FAILED TO PROVIDE ANY SORT OF DOCUMENTARY EVIDENCE THAT THE QU A NTITY OF GOODS IN QUESTION IS SOLD OUTSIDE THE BOOKS OF ACCOUNTS. DURING THE COURSE OF ASSESSMENT THE APPELLANT HAS MADE AN OBJECTION FOR THE PROPOSAL OF ASSESSING OFFICER TO TREAT THE QUANTITY AS SALE OUTSIDE BOOKS OF ACCOUNTS. APPELLANT ALSO HAS OBJECTED TO THE ASSESSING OFFICER THAT ANY ADDITION WITHOUT ANY LOGIC OR BASIC IS BAD LAW. THE APPELLANT AFTER HAVING RECONCILED THE QUANTITY AS PER PROVISIONAL BILLS OF R.K.MARKETING WITH THAT OF SEIZED STOCK REGISTER HAS DISCHARGED HIS DUTY TO THE SATISFACTION OF THE ASSESSING OFFICER. IT IS ALSO STATED BY THE APPELLANT THAT WHEN THE QUANTITY IN QUESTION IS PART AND PARCEL OF SEIZED STOCK REGISTER/PRODUCTION REGISTER ON THE BASIS OF WHICH THE UNDISCLOSED INVESTMENT IN INVENTORY IS VOLUNTARILY DECLARED BY THE APPELLANT AND WHICH IS ALSO DULY ACCEPTED BY THE INVESTIGATION WING OF IT DEPARTMENT. THIS GOES TO PROVE THAT INVESTIGATION WING OF THE IT DEPARTMENT HAS HAVING ACCEPTED THE CORRECTNESS OF THE SEI ZED PRODUCTION REGISTER AND THE VALUE OF INVESTMENT MADE IN WORK IN PROGR ESS. THE ASSESSING OFFICER HAS FAILED TO ACCEPT THAT THERE WAS 9,30,831. 33 M T OF IRON ORE WHICH IS YET TO BE SOLD BY THE MINE OWNER. THE ACTION OF THE ASS ESSING OFFICER IS QUITE CONTRADICTORY, BEYOND NATURAL JUSTICE AND PRINCIPLES OF ACCOUNTANCY, WHEREIN HE HAS TRIED TO PROVE THAT THE APPELLANT HAS SOLD IRON ORE OUT OF QUANTIT Y OF CLOSING STOCK AS DECLARED AND ACCEPTED BY THE INVESTIGATION WING OF THE DEPARTMENT. IT IS RESPECTFULLY SUBMITTED THAT THE INVESTMENT IN EXCESS STOCK AS ALLEGED BY THE AO IN HIS ASSESSMENT ORDER WAS ALREADY BEEN DECLARED BY THE APPELLANT IN HIS RETURN FILED FOR THE RELEVANT ASSESSMENT YEAR AND ON WHICH THE APPELLANT HAD ALSO PAID THE TAXES AND TAXING THE SAME AGAIN IN THE HANDS OF THE APPELLANT IS BAD IN LAW AND ACCORDINGLY THE ADDITION ITSELF IS LIABLE TO THE DELETED. IN VIEW OF THE ABOVE EXPLANATION OF THE APPELLANT AND THE FACT THAT NO SPECIFIC EVIDENCE OF ANY UNRECORDED SALES HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER, THE FACT WHICH IS RELEVANT IS THAT THE APPELLANT HAS ALREADY DISCLOSED AN ADDITIONAL INCOME OF RS. 18,81,78,200/ - IN THE R ETURN OF INCOME FILED SUBSEQUENT TO THE SEARCH AND SEIZURE ACTION ON ACCOUNT OF DISCREPANCY IN STOCK OF 9,40,891.33 M.T. OF IRON ORE NOTICED AT 200/ - PER M.T. ( AS COST OF PRODUCTION OF EXCESS STOCK AT VYSANAKERI IRON ORE MINES OF M/S S B MINERALS). ALSO, WITH REGARD TO EVIDENCES OF PAYMENTS FOR SERVICES TO M/S R K MARKETING TO THE EXTENT OF EVIDENCE GATHERED DURING SEARCH I.E. RS. 2.55 CRORE, ADDITIONAL INCOME HAS ALREADY BEEN DECLARED BY THE APPELLANT AS CASH PAYMENT NOT ACCOUNTED FOR. 11 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH UNDER SUCH CIRCUMSTANCES, THIS ADDITION MADE BY THE ASSESSING OFFICER, IS APPARENTLY IN RESPECT OF THE SAME DISCREPANCY IN IRON ORE PRODUCTION, AND THE ASSUMPTION THAT THE ADDITIONAL STOCK PRODUCED HAS BEEN SOLD BY THE APPELLANT, IS NOT BACKED BY ANY EVIDENCE ON THE PART OF THE ASSESSING OFFICER AND IS NOT CALLED FOR AND IS THEREFORE DELETED. 9. IN THE RESULT, THE APPEAL FOR A.Y. 2007 - 08 IS PARTLY ALLOWED AND APPEAL FOR A.Y. 2008 - 09 IS ALLOWED. 3 . WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSING OFFICER HAS RECONCILE D THE PRODUCTIO N FIGURE OF R.K. MARKETING AND THE MIN ES SOLD BY THE ASSESSEE COMPANY, M/S. VYSHNAVI MINERALS AND HE WAS OF THE VIEW THAT THE ASSESSEE HAS SOLD SOME OF THE PRODUCTION AMOUNTING TO RS. OF RS.18,81,78,200 / - OUTSIDE OF THE BOOKS OF ACCOUNTS. THE C IT( A) HAS VERIFIED THE DIFFERENCE AND AFTER VERIFICATION OF THE DIFFERENCE THE CIT(A) WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS COME TO CONCLUSION THAT THERE IS A DISCREPANCY I N RESPECT OF IRON ORE PRODUCTION, AND THE ASSUMPTION THAT ADDITIONAL STOCK PRODUCED HAS BEEN SOLD BY THE ASSESSEE BUT IT IS NOT BACKED BY ANY EVIDENCE , THEREFORE, THE C IT(A) HAS DE LETED THE SAME. DURING THE COURSE OF HEARING BEFORE US, LEARNED DR DID NOT BROUGHT ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE ASSUMPTION OF THE ASSESSEE IS SUPPORTED BY ANY DOCUMENTARY EVIDENCE TO SHOW THAT ASSESSEE HAD SOLD THE IRON ORES OUTSIDE THE BOOKS OF ACCOUNT. THEREFORE, WE ARE F THE VIEW THAT CIT(A) IS JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT REQUIRED. 4 . IN THE RESULT, THE APPEAL F ILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 . 1 0 .2014. S D / - S D / - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 1 7 . 1 0 .2014 P.S. - *PK* 12 . ITA NO. 387/PNJ/2013(A.Y.2008 - 09 ) ACIT VS. SRI B.P.ANAND KUMAR SINGH COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER