DCIT, Bangalore V. M/s Mysore MInerals Ltd., Bangalore

ITA 808/BANG/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7033 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V CHANDRASHEKAR MS PRISCILLA
• Section: 143(3); 145; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER A ND SHRI JASON P.BOAZ, ACCOUNTANT MEMBER ITA NO S . 683 & 1109 / BANG/20 12 (ASSESSMENT YEAR S : 20 0 8 - 09 & 2009 - 10 ) M/S.MYSORE MINERALS LTD. , NO.39, M.G.ROAD, PB NO.5046, BANGALORE. PAN: AACCM2873L APPELLANT VS. DEPUTY COMMISSIONER OF INCOME - TAX / ASST. COMMISSIONER OF INCOME - TAX CIRCLE 12(1), BANGALORE. RESPONDENT AND ITA NOS.808 & 1309/BANG/2012 (ASSESSMENT YEARS: 2008 - 09 & 2009 - 10) (BY THE REVENUE) ***** A SSESSEE BY: SHRI V.CHANDRASHEKAR, ADVOCATE. REVENUE BY: MS.PRISCILLA SINGSIT, CIT(DR). DATE OF HEARING : 04 - 09 - 2014 DATE OF PRONOUNCEMENT: 10 - 1 0 - 2014 O R D E R PER BENCH : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDERS OF THE CIT(A) - III, BANGALORE DATED 9 - 3 - 2012 AND 9 - 7 - 2012 FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 RESPECTIVELY. ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 2 OF 11 2. BRIEF FACTS OF THE CASE AR E THAT THE ASSESSEE - COMPANY IS IN THE BUSINESS OF MINING AND EXTRACTION OF MINERAL S , METALS AND GRANITES. IT FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR AND THE SAME WAS TAKEN UP FOR SCRUTINY U/S 143(3) OF THE INCOME - TAX ACT, 1961[HEREINAF TER REFERRED TO AS 'THE ACT']. DURING THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2008 - 09, FROM THE AUDIT REPORT FOR THE F INANCIAL YEAR 2007 - 08 , THE ASSESSING OFFICER (AO) OBSERVED THAT THE A UDITOR HAS QUALIFIED THE TRANSACTION OF THE ASSESSEE WITH M/S.KALYANI STEELS LTD., STATING THAT THE COMPANY HAS MARKETING AGREEMENT WITH M/S.KALYANI STEELS LTD., WHICH EXPIRED ON 31 - 3 - 2006 AND HAS BEEN TAKEN UP FOR ARBITRATION AND P ENDING AWARD, THE COMPANY HAS REVISED THE RATE TO RS.700/ - PER METRIC TON AND THE REVISED RATE IS WITHOUT PREJUDICE TO THE PENDING PROCEEDINGS AND SINCE THE OUTCOME OF ARBITRATION IS NOT KNOWN, THE EXACT PROFIT/LOSS EARNED/INCURRED BY THE COMPANY EVEN AFTER THE REVISION OF RATE CANNOT BE QUANTIFIED, IN THE ABSENCE OF OUTCOME OF ARBITRATION PROCEEDINGS . TAKING NOTE OF THE ABOVE QUALIFICATION OF THE AUDITOR, THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF IRON ORE SUPPLIED TO M/S.KALYANI STEELS LTD., AND OTHERS ALONG WITH RATE S CHARGED AND REASONS FOR SELLING THE ORE AT OLD R ATES. THE ASSESSEE - COMPANY FILED ITS REPLY STATING THAT THE COMPANY HAD ENTRUSTED THE CONTRACT OF RAISING IRON ORE IN SUBBARAYANAHALLI MINES AND JAMBUNATHANALLI MINES ON 17 - 1 - 2002 AND SIMULTANEOUSLY ON THE SAME DATE, ANOTHER ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 3 OF 11 AGREEMENT OF MARKETING CONTRAC T WAS ALSO ENTERED INTO WITH M/S.KALYANI STEELS LTD., FOR MARKETING OF IRON ORE MINED AT SUBBARAYANAHALLI MINES AND THE CONTRACT WAS STATED TO BE AWARDED TO M/S.KALYANI STEELS LTD., AFTER FOLLOWING PRESCRIBED GOVERNMENT GUIDELINES AND PROCEDURES. IT WAS A LSO SUBMITTED THAT THE TRANSACTIONS WITH M/S.KALYANI STEELS LTD., ARE AS PER THE AGREEMENT DATED 17 - 1 - 2002 ACCORDING TO WHICH THE PRICES SHALL BE REVISED AND RE - FIXED ON FIRST OF APRIL EACH YEAR TAKING INTO CONSIDERATION THE PRICES OF MMTC BUT THAT THE COM PANY S CLAIMS ON M/S.KALYANI STEELS LTD., REGARDING VARIOUS CLAUSES OF THE AGREEMENT INCLUDING REVISION OF RATES ARE UNDER ARBITRATION. THE AO OBSERVED THAT DURING THE FINANCIAL YEAR 2007 - 08, THE ASSESSEE - COMPANY HAD SOLD 5,94,928 MT OF C - ORE TO M/S.KALYA NI STEELS LTD., AT THE RATE OF RS.700/ - PER MT WHEREAS THE MARKET RATE OF IRON ORE WAS RS.1250/ - PER MT AS ON 4 - 4 - 2007. SINCE THE PRICE CHARGED TO M/S.KALYANI STEELS LTD., WAS ONLY RS.700/ - PER MT, THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS OF DEBIT NO TES RAISED AND THE CLAIMS MADE BEFORE THE ARBITRATOR, IF ANY, DURING THE FINANCIAL YEAR 2007 - 08. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN THE CIRCUMSTANCES FOR SELLING C - ORE AT LOW RATE TO M/S.KALYANI STEELS LTD., THE ASSESSEE REPLIED THAT THE COMPANY HAD S OLD C - ORE TO M/S.KALYANI STEELS LTD., AT THE RATE OF RS.700/ - PER MT AS AN INTERIM PRICE BASED ON THE RESOLUTION PASSED BY THE COMPANY IN ONE OF THE BOARD MEETINGS AND THE FINAL SELLING PRICE IS YET TO BE FIXED IN RESPECT OF THE TRANSACTIONS RELATING TO TH E ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 4 OF 11 FINANCIAL YEAR 2007 - 08 AND NEGOTIATIONS ARE STILL GOING ON WITH THE LONG STANDING BUYERS. IT WAS ALSO SUBMITTED THAT THE FINAL RATE PER MT OF C - ORE WILL NOT BE LESS THAN MMTC PRICE AND ONCE FINAL PRICE IS FIXED BASED ON THE OUTCOME OF THE ARBITRATION OR NEGOTIATIONS WITH LONG STANDING BUYER, THE DIFFERENCE AMOUNT WILL BE OFFERED AS THE INCOME ON THE BASIS OF RAISING THE ADDITIONAL INVOICE S OR DEBIT NOTE S ON THE BUYER. IT WAS SUBMITTED THAT THERE WAS NO SUPPRESSED SALE CONSIDERATION AGAINST THE GOODS SOL D TO M/S.KALYANI STEELS DURING THE YEAR. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT THE DIFFERENCE OF THE MMTC PRICE AND THE PRICE CHARGED BY THE ASSESSEE IS SUPPRESSED SALE OF THE ASSESSEE AND HE ACCORDINGLY ADOPT ED THE FAIR MARKE T PRICE AT RS.1250/ - PER MT AND THE DIFFERENTIAL SALE PRICE ( I.E. RS.1250 - RS.700 ) OF RS.550 / - PER MT WAS BROUGHT TO TAX. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONSIDERED THE FACT THAT NO MONEY WAS REALIZED IN EXCESS OF WHA T IS RECORDED IN THE BOOKS . HOWEVER, HE HELD THAT THE ASSESSEE HAD RAISED INVOICE ON KSIL AT RS.1057 PMT UP TO 1 - 2 - 2008 WHICH WAS LATER RE VERSED FOR THE ENTIRE FINANCIAL YEAR AFTER THE BOARD RESOLUTION OF 18 TH OF MARCH 2008 . HE, THERE A F TER , HELD T HAT THE MARKET PRICE OF MMTC COULD NOT HAVE BEEN REALIZED BY THE ASSESSEE AND EVEN THE PRICE STATED TO BE RAISED BY THE ASSESSEE AT RS.700/ - PMT IS ALSO NOT ACCEPTABLE. HE, THEREFORE, ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 5 OF 11 DIRECTED THE AO TO RE - COMPUTE THE TURNOVER OF THE ASSESSEE BY ADOPTING THE PRICE AT RS.1057/ - PMT AS RAISED BY IT IN ITS INVOICES . THUS, THE ASSESSEE WAS GIVEN A PARTIAL RELIEF. AGAINST THE RELIEF GIVEN BY THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US WHILE AGAINST THE CONFIRMATION OF THE PART OF SALE PRICE IN EXCESS OF WH AT IS RAISED BY THE ASSESSEE IN THE DEBIT NOTE, THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE, SHRI V .CHANDRASHEKAR, WHILE REITERATING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW, HA S DRAWN OUR ATTENTION TO THE DECISION OF THIS TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE EARLIER ASSESSMENT YEARS I.E. 2004 - 05 TO 2006 - 07 WHEREIN THE TRIBUNAL HAS CONSIDERED THE SIMILAR SET OF FACTS AND HAS HELD AT PARA.18.4 AS UNDER: 18.4 WE HAVE HEARD BOTH PARTIES AND CAREFULLY PERUSED AND CONSIDERED THE MATERIAL ON RECORD. WE FIND FROM THE RECORD THAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS REQUIRED BY THE ASSESSING OFFICER. FROM THE DETAILS ON RECORD IN RESPECT OF THE ADDITIONS MADE TO THE RETURNE D INCOME ON ACCOUNT OF SALES TO M/S. KALYANI STEELS LTD BELOW MARKET PRICE, WE AGREE WITH THE OBSERVATIONS OF THE ASSESSING OFFICER THAT THE PRICE CHARGED FOR C - ORE IS BELOW THE MARKET PRICE. WE ALSO OBSERVE THAT THE ASSESSING OFFICER HAS RECORDED THAT KAR NATAKA LOK AYUKTA IN ITS REPORT ON THE MINING SCAM ALLEGED MALPRACTICES ON THE PART OF THE OFFICIALS OF THE ASSESSEE COMPANY. FROM THE SUBMISSIONS MADE BY THE ASSESSEE, A GOVT OF KARNATAKA UNDERTAKING, IT CAN BE INFERRED THAT THE SALES OF C - ORE TO KALYANI STEELS LTD ARE SUPPORTED BY INVOICES RAISED, ENTRIES IN THE BOOKS OF ACCOUNTS AUDITED BY CHARTERED ACCOUNTANTS. THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE IS THE MERCANTILE SYSTEM AS PER THE PROVISION OF SECTION 145 OF THE ACT AND WE FIND THAT NO FA ULT HAS BEEN FOUND THEREIN NOR HAS IT BEEN REJECTED. NOWHERE IN THE ORDER OF ASSESSMENT OR THE MATERIAL ON RECORD DO WE FIND ANYTHING TO ESTABLISH THAT THERE WERE ANY REALIZATION S ON ACCOUNT OF SALES BEYOND WHAT ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 6 OF 11 IS RECORDED IN THE BOOKS OF ACCOUNTS. AS PER THE I.T. ACT, 1961 PROFITS FROM BUSINESS ARE TO BE COMPUTED UNDER SECTION 28 OF THE ACT AS PER THE ACCOUNTING POLICIES MANDATED BY SECTION 145 OF THE ACT WHICH IN THE ASSESSEE'S CASE IS THE MERCANTILE SYSTEM. THE SCOPE OF TOTAL INCOME IS ALSO DEFINED UNDE R SECTION 5 OF THE ACT. THE I.T. ACT, 1961 IS VERY CLEAR THAT WHAT IS TO BE TAXED IS THE REAL INCOME OF AN ASSESSEE AND NOT NOTIONAL OR HYPOTHETICAL INCOME AND IT DOES NOT PERMIT AN ASSESSING OFFICER TO COMPUTE INCOME WITHOUT ANY EVIDENCE. THERE IS NO FIND ING BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS SOLD ITS C - ORE AT A PRICE LESS THAN THAT AGREED TO IN THE CONTRACT ENTERED INTO WITH M/S. KALYANI STEELS LTD OR THAT IT HAS REALIZED FROM M/S. KALYANI STEELS LTD ADDITIONAL AMOUNTS ON SUCH SALES WHICH IT H AD NOT RECORDED IN ITS BOOKS. THE ASSESSEE IS LEGALLY BOUND TO ABIDE WITH THE TERMS OF THE CONTRACTUAL OBLIGATIONS ARISING OUT OF ITS AGREEMENT TO SELL C - ORE TO M/S. KALYANI STEELS LTD AND THE CONTRACT ENTERED INTO BEING LEGAL AND VALID, IT CANNOT BE BRUSH ED ASIDE. AFTER TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE CASE ON THIS ISSUE, WE FIND THAT NO EVIDENCE WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO ESTABLISH THAT THE ASSESSEE HAS REALIZED FROM THE SALE OF C - ORE TO M/S. KA LYANI STEELS LTD MORE THAN WHAT IS RECORDED IN THE ASSESSEE'S BOOKS OF ACCOUNT. IN THIS VIEW OF THE MATTER, THE ADDITION MADE ON ACCOUNT OF SALES TO M/S. KALYANI STEELS LTD BELOW MARKET RATE, IN OUR CONSIDERED OPINION IS NOT FOUNDED ON SOUND AND ACCEPTED A CCOUNTING AND LEGAL PRINCIPLES AND IS THEREFORE LIABLE TO BE DELETED. WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE DECISION OF THE LEARNED CIT(APPEALS) IN DELETING THE ADDITION OF RS.15,51,45,117. THE GROUNDS AT S.NOS.2 AND 3 RAISED BY REVENUE ARE A CCORDINGLY DISMISSED. HE ACCORDINGLY RELIED ON THE ORDER OF THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE, MS.PRISCILLA SINGSIT, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE AO. 5. HAVING REGARD TO THE CONTENTIONS OF BOTH THE PARTIES AND H AVING CONSIDERED THE RIVAL CONTENTIONS, WE FIND THAT THE TRIBUNAL, IN THE EARLIER ASSESSMENT YEARS HAS TAKEN NOTE OF THE FACT THAT THE KARNATAKA LOK AYUKTA, IN ITS REPORT ON MINING SCAM HAD ALLEGED MAL PRACTICES ON THE PART OF THE OFFICIALS OF THE ASSESSEE - COMPANY WHICH IS A GOVERNMENT OF KARNATAKA ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 7 OF 11 UNDERTAKING AND INQUIRIES WERE INITIATED AGAINST THE RELEVANT OFFICIALS. THE TRIBUNAL HAS ALSO HELD THAT NO EVIDENCE WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT THE ASSESSEE HAS REALIZED FR OM THE SALE OF C - ORE TO M/S.KALYANI STEELS LTD., MORE THAN WHAT IS RECORDED IN THE ASSESSEE S BOOKS OF ACCOUNT AND THEREFORE THE TRIBUNAL HAD CONFIRMED THE ORDER OF THE CIT(A) IN DELETING THE ADDITION. DURING THE COURSE OF HEARING, WE HAD NOTICED FROM THE ORDER OF THE CIT(A) THAT THE ASSESSEE HAD INITIALLY RAISED DEBIT NOTES AT RS.1057 / - PMT AND HAD REDUCED THE RATE TO RS.700/ - PMT DURING THE PENULTIMATE MONTH OF THE FINANCIAL YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE HAD STATED THAT THIS HAS BEEN DONE I N VIEW OF THE BOARD RESOLUTION DATED 18/3/2008 . THE LEARNED COUNSEL FOR THE ASSESSEE WAS DIRECTED TO FILE COPY OF THE BOARD RESOLUTION WHICH HAS BEEN FILED BEFORE US. ON PERUSAL OF THE SAID BOARD RESOLUTION, WE FIND THAT MMTC PRICE WAS RS.1058 PMT PREVAI LING ON 1 ST APRIL 2007 FOR SUPPLIES TO BE MADE DURING THE FINANCIAL YEAR 2007 - 08 WHICH IS IN CONFORMITY WITH THE MARKETING AGREEMENT AND ACCORDINGLY THE ASSESSEE COMPANY HAD RAISED DEBIT NOTE FOR THE SAME WHERE AS M/S.KALYANI STEELS LTD., HAD OFFERED SALES PRICE AT RS.635/ - PMT AND AFTER NEGOTIATIONS THE SALE PRICE WAS FIXED AT RS.700/ - PMT WITHOUT PREJUDICE TO THE AWARD BY THE ARBITRATOR. IN VIEW OF THE SAME , THOUGH BILLS WERE RAISED AT RS.1057/ - TILL FEBRUARY 2008, THE PRICE WAS CHANGED TO RS.700/ - .I T IS SEEN THAT WHAT IS ACTUALLY RECEIVED BY THE ASSESSEE ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 8 OF 11 IS ONLY RS.700/ - PMT DURING THE RELEVANT FINANCIAL YEAR AND THE FINAL PRICE WAS YET TO BE FIXED AFTER THE OUTCOME OF THE ARBITRATION. THE ASSESSEE HAS TO OFFER THE BALANCE OF SALE CONSIDERATION IN THE Y EAR OF ARBITRATION AWARD . WHAT IS CONTEMPLATED TO BE TAXED UNDER THE INCOME - TAX ACT IS THE REAL INCOME AND UNLESS INCOME DUE TO THE ASSESSEE HAS BEEN CRYSTALLIZED, IT CANNOT BE BROUGHT TO TAX ON AN ESTIMATE BASIS . IT IS NOT IN DISPUTE THAT THE ASSESSEE H AS, IN FACT, RECEIVED ONLY RS.700/ - PMT FROM M/S.KALYANI STEELS LTD. THEREFORE, AS HELD BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR EARLIER ASSESSMENT YEARS, WE ARE INCLINED TO ALLOW THE ASSESSEE S APPEAL AND HOLD THAT THE ACTU AL PRICE RECEIVED BY THE ASSESSEE ONLY SHALL BE TREATED AS INCOME OF THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR A S THE ASSESSEE HAS TO OFFER DIFFERENCE OF PRICE CHARGED O N THE FINAL PRICE ARRIVED AT BY THE ARBITRATOR IN THE YEAR OF AWARD. 6. IN THE RESULT, THE ASSESSEE S APPEALS ARE ALLOWED AND THE REVENUE S APPEALS ARE DISMISSED. 7. FOR THE ASSESSMENT YEAR 2008 - 09, THERE IS AN ADDITIONAL ISSUE RELATING TO SALES MADE TO M/S.SHIVASHANKAR MINERALS. 7.1 BRIEF FACTS OF THE CASE ARE THAT IN THE SAID CAS E, THE MMTC RATE WAS RS.1250/ - PMT WHEREAS THE ASSESSEE HAD SOLD ORE TO ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 9 OF 11 M/S.SHIVASHANKAR MINERALS AT RS.231/ - PMT. THE AO MADE SIMILAR ADDITION AS IN THE CASE SALES TO M/S.KALYANI STEELS LTD., WHEREAS THE CIT(A) HAS GIVEN PARTIAL RELIEF TO THE ASSESSEE ON SIMILAR GROUNDS AND BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 7.2 WE FIND THAT THE AGREEMENT S BETWEEN THE ASSESSEE AND M/S.KALYANI STEELS LTD., AND ALSO M/S.SHIVASHANKAR MINERALS , A RE SIMILAR AND THE FIXATION OF PRICE OF ORE WAS A LSO GOVERNED BY SIMILAR SET OF FACTS. THEREFORE, FOLLOWING THE SAME LOGIC, WE HOLD THAT THE ACTUAL PRICE RECEIVED BY THE ASSESSEE ONLY IS TO BE BROUGHT TO TAX. 8. AS REGARDS THE ADDITION ON ACCOUNT OF VALUATION OF CLOSING STOCK , BRIEF FACTS ARE THAT DURI NG THE ASSESSMENT PROCEEDINGS, THE ASSESSEE - COMPANY WAS ASKED TO FURNISH THE DETAILS OF CLOSING STOCK AS ON 31 - 3 - 2008 AND FROM THE PERUSAL OF THE DETAILS OF TENDERS FINALIZED AGAINST THE IRON ORE FINES DURING MARCH 2008 AND FROM THE DETAILS FILED, THE AO F OUND THAT THE ASSESSEE HAD CALLED FOR TENDERS AGAINST ITS STOCK OF IRON ORE FINES AND IT GAVE DELIVERY ORDER IN THE MONTH OF MARCH/APRIL 2008. THUS HE CAME TO THE CONCLUSION THAT THE ASSESSEE HAS CLOSING STOCK OF IRON ORE BUT THE SAME WAS NOT RECORDED IN THE BOOKS OF ACCOUNT . THE AO HELD THAT THE ASSESSEE COMPANY IS SUPPOSED TO TAKE THE VALUE OF THE CLOSING STOCK AT THE END OF EACH FINANCIAL YEAR AND SUCH VALUE ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 10 OF 11 SHOULD BE ADOPTED AS THE CLOSING STOCK TO ARRIVE AT THE TRUE AND CORRECT INCOME. HE OBSERVED T HAT THE ASSESSEE - COMPANY HAD STOCK OF IRON ORE OF 1,10,000 MTS AT THE END OF FINANCIAL YEAR AND HE DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT ITS STOCK WAS ALREADY SOLD BY TENDERS AND ONLY DELIVERY WAS PENDING. HE, THEREFORE, VALUED THE STOCK AT R S.25/ - PMT AND ARRIVED AT THE CLOSING STOCK AT RS.27,50,000/ - AND BROUGHT IT TO TAX AS THE VALUE OF THE CLOSING STOCK. 8.1 AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 8.2 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD, IN FACT, SOLD THE STOCK BY TENDERS AND THE TENDERS WERE FINALIZED AND PAYMENTS WERE RECEIVED AND IT WAS ONLY PENDING DELIVERY AND THEREFORE THE STOCK IN QUESTION DID NOT BELONG TO THE ASSESSEE. IF THE ASSESSEE HAS ALREADY RECEIVED THE PAYMENT FOR THE SALE OF STOCK, IT WOULD DEFINITELY BELONG TO THE PURCHASER AND THE STOCK LYING WITH THE ASSESSEE WOULD NOT BELONG TO THE ASSESSEE. HOWEVER, WE FIND THAT THERE IS NO FINDING BY ANY OF THE AUTHORITIES ON THIS CONTENTION OF THE ASSESSEE AND THEREFORE THIS CONTENTION NEEDS VERIFICATION BY THE AO. IN VIEW OF THE SAME, THE ISSUE IS REMITTED TO THE FILE OF THE AO FOR DE NOVO CONSIDERATION. THE ASSESSEE SHALL FURNISH ALL THE ITA NO S . 683, 808, 1109 & 1309 /BANG/20 1 2 M/S.MYSORE MINERALS LTD. PAGE 11 OF 11 NECES SARY DETAILS BEFORE THE AO TO SUBSTANTIATE ITS CLAIM AND THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARING . THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE ASSESSEE S APPEALS ARE ALLOWED AND THE REVENU E S APPEALS ARE DISMISSED. PRON OUNCED IN THE OPEN COURT ON 10 TH OF OCTO BER, 201 4. SD/ - SD/ - (JASON P BOAZ ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER EKSRINIVASULU COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE