The Deputy Commissioner of Income Tax, Central Circle, Panaji., Panaji V. M/s Muktar Minerals Pvt. Ltd., Goa

ITSSA 36/PAN/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1769 (ITAT-PANAJI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SRINIVAS NAYAK
• Keywords: Depreciation; Search and seizure; Additional evidence
• Section: 10B; 10; 15

Judgement Text

1 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER IT (SS) A NO S . 34 TO 36 /P A N/201 5 (ASST. YEAR S : 200 9 - 1 0 TO 2011 - 12 ) DCIT, CENTRAL CIRCLE, PANAJI - GOA. VS. M/S. MUKTAR MINERALS PVT. LTD., PLOT B - 2, B - 3, PHASE IA, VERNA INDUSTRIAL ESTATE, VERNA GOA. PAN NO. AA ECM 0510 E (APPELLANT) (RESPONDENT) C.O.NO.72/PAN/2015 IT (SS) A NO. 3 5 /P A N/201 5 (ASST. YEAR : 20 1 0 - 1 1 ) M/S. MUKTAR MINERALS PVT. LTD., PLOT B - 2, B - 3, PHASE IA, VERNA INDUSTRIAL ESTATE, VERNA GOA. VS. DCIT, CENTRAL CIRCLE, PANAJI - GOA. PAN NO. AA ECM 0510 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SRINIVAS NAYAK C A. DEPARTMENT BY : SHRI PRASHANT GADEKAR - D R DATE OF HEARING : 2 1 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 2 1 / 0 3 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THESE APPEAL S FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF THE 2 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 COMMISSIONER OF INCOME TAX (APPEALS) , PANAJI - 2 , ALL DATED 2 9 /0 7 /201 5 FOR THE ASSESSMENT YEARS 2009 - 10, 2010 - 11 & 2011 - 12 . 2. THE REVENUE HAS TAKEN THE COMMON GROUNDS OF APPEAL, WHICH READ AS UNDER: - 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE D ISALLOWANCE MADE UNDER SECTION 10 B OF THE INCOME TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSI NG OFFICERS CONCLUSION WAS BASED ON LOOSE SHEETS FOUND AT THE TIME OF SEARCH AND STATEMENT OF EMPLOYEE TAKEN ON 28.03.2014 WHERE AS THE CONCLUSION OF THE ASSESSING OFFICER WAS BASED ON DETECTION OF FABRICATED TRANSPORT BILLS SUBMITTED DURING SCRUTINY PROC EEDINGS AND THE STATEMENT OF THE CHAIRMAN OF THE ASSESSEE COMPANY? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE AND HOLDING THAT THE ASSESSEE COMPANY OPERATED FROM THE SITE OF M/S NADEEM MINERALS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IN HIS LETTER DATED 13.03.2014 FILED DURING SCRUTINY PROCEEDINGS HAS STATED THAT THE ENTIRE MACHINERY REQUIRED FOR PROCESSING WAS HIRED AT SANDUR AND ALSO THAT THE IRON ORE WAS TRANSPORTED FRO M M/S NADEEM MINERALS TO SANDUR FOR PROCESSING. 4. WHETHER, ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN ACCEPTING FRESH EVIDENCE AND NOT GIVING OPPORTUNITY TO THE ASSESSING OFFICER AS PER SUB - RULE (3) TO RULE 46A OF IT RULES, 1962 . 5. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THE NEGATIVE STOCK 3 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 FIGURES AS PER THE BOOKS OF THE ACCOUNTS OF THE ASSESSEE INDICATED THAT THE ASSESSEE HAD EXPORTE D THE MATERIALS WITHOUT HAVING THE STOCK AT EXPORT ORIENTED UNIT? 6. WITHOUT PREJUDICE TO THE ABOVE CONTENTION THAT THE ASSESSEE DID NOT MAKE ANY VALUE ADDITION TO THE IRON ORE, THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THE ACTIVITY OF THE ASSESSEE C ANNOT BE HELD AS MANUFACTURING OR PRODUCTION OF ARTICLE OR THI NG FOR THE PURPOSE OF SECTION 10 B OF THE ACT. 7. FOR THE ABOVE GROUNDS AND ANY ADDITIONAL GROUNDS THAT MAY BE AGITATED DURING THE COURSE OF THE HEARING IT IS PRAYED THAT THE ORDER OF THE LD. C IT(A) - 2, PANAJI MAY BE QUASHED AND THAT OF THE AO RESTORED. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING , EXTRACTING AND TRADING IN IRON ORE MODELS. DURING THE YEARS UNDER APPEAL, THE ASSESSEE CLAIMED DEDUCTION UNDER SEC. 10B WHICH WAS DISALLOWED AND ADDED BACK TO ITS TOTAL INCOME : - A.Y. INCOME OF 100% EOU UNIT CLAIMED AS DEDUCTION UNDER SEC. 10B TO BE DISALLOWED AND ADDED BACK 2009 - 10 . 15,23,97,573/ - 2010 - 11 2,07,95,834/ - 2011 - 12 6,64,96,180/ - THE ASSESSING OFFICER WHILE DOIN G SO OBSERVED THAT THE ASSESSEE IS PURCHASING ORE FINES/LUMPS FROM M/S. NADEEM MINERALS AN D THE SAME IS TRANSPORTED DIRECTLY FROM THE MINES TO PORTS FOR EXPORT WITHOUT ANY PROCESSING WHATSOEVER HAVING BEEN DONE TO IT. EVEN IF IT IS ASSUMED THOUGH NOT ACCEPTED THAT THE ASSESSEE COMPANY IS PURCHASING SEMI PROCESSED IRON ORE FROM M/S. M/S. NADEEM MINERALS AND PROCESSING THE SAME TO IRON ORE FIN E AND LUMPS, IT DOES NOT AMOUNT TO PRODUCTION OF AN ARTICLE OR A THING AND THUS DOES NOT COMPLY WITH THE PROVISION OF SEC. 10B OF THE I.T. ACT, 1961 . THEREFORE, THE CLAIMS OF DEDUCTION MADE BY 4 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 THE A SSESSEE COMPANY M/S. MUKTAR MINERALS PVT. LTD. FOR THE ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2011 - 12 IS DISALLOWED AND ADDED BACK TO ITS TOTAL INCOME. THE CLAIM OF DEDUCTION UNDER SEC. 10B HAS BEEN DISALLOWED AS UNDER: - A.Y. AMOUNT DISALLOWED 2009 - 10 15,23,97,573/ - 2010 - 11 2,07,95,834/ - 2011 - 12 6,64,96,180/ - 4 . ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE AND WHILE DOING SO, HELD AS UNDER: - 5.4. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. DURING THE COURSE OF SEARCH AND SEIZURE, DOCUMENTS WERE FOUND FROM WHICH FOLLOWING FACTS CAME TO THE NOTICE OF THE A.O. I) M/S. NADEEM MINERALS IS THE OWNER OF THE LEASED MINES. II) M/S. S.M. CONSTRU CTIONS EXTRACTS ORES FROM THE MINES OF M/S.NADEEM MINERALS AS PER THE RAISING CONTRACT. III) M/S. NADEEM MINERALS SELLS THE ORE TO M/S. MUKTAR MINERALS PVT. LTD., THE APPELLANT. THE IRON ORE SOLD ARE CLASSIFIED AS FINES AND LUMPS. THE A.O. CONCLUDED THAT, THE APPELLANT COMPANY HAS PURCHASED ALREADY PROCESSED IRON ORE, AND IT IS ONLY TRADING IN FINISHED GOODS AND NOT IN THE BUSINESS OF EITHER MANUFACTURING OR PRODUCTION OF IRON ORE AND THEREFORE NOT ELIGIBLE FOR EXEMPTION U/S.1OB OF THE ACT. THE A. O. SUMMED UP HIS ENTIRE INVESTIGATION WITH FOLLOWING REMARKS: IN VIEW OF THE ABOVE DISCUSSION, IT IS CRYSTAL CLEAR THAT THE ASSESSEE IS PURCHASING IRON ORE FINES/LUMPS FROM M/S. NADEEM MINERALS AND THE SAME IS TRANSPORTED DIRECTLY FROM THE MINES TO POR TS FOR EXPORT WITHOUT ANY PROCESSING WHAT SO EVER HAVING BEEN DONE TO IT. EVEN IF IT IS ASSUMED THOUGH NOT ACCEPTED THAT THE ASSESSEE COMPANY IS PURCHASING SEMI PROCESSED IRON ORE FROM M/S. NADEEM MINERALS AND PROCESSING THE SAME TO IRON ORE FINE AND LUM PS, IT DOES NOT AMOUNT TO PRODUCTION OF AN ARTICLE OR A THING AND THUS DOES NOT COMPLY WITH THE PROVISION OF S. LOB OF THE I.T. ACT, 1961. THEREFORE, FOLLOWING CLAIMS OF DEDUCTION MADE BY THE ASSESSEE COMPANY M/S. MUKTAR MINERALS PVT. LTD. FOR THE A.YRS. 2009 - 10, 2010 - 11 AND 2011 - 12 HAS TO BE DISALLOWED AND 5 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 ADDED BACK TO ITS TOTAL INCOME. (PARA 58, PAGE - 35 OF AOS ORDER). THE CLAIM OF DEDUCTION U/S. LOB HAS BEEN DISALLOWED AS UNDER: A.YR AMT. DISALLOWED 2009 - 10 RS.15,23,97,573/ - 20 10 - 1 1 RS. 2,07,95,834/ - 2011 - 12 RS. 6,64,96,180/ - HOWEVER, DURING THE COURSE OF SEARCH ITSELF, THE ASSESSEE HAD ADMITTED THAT CERTAIN EXPENSES HAD NOT BEEN ALLOCATED ON EOU UNIT AND IT, CONSEQUENTLY REDUCED ITS CLAIM TO RS. 13,86,43,556/ - , WHICH WAS DISALLOWED BY THE A.O. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT CONTENDED THAT THE APPELLANT HAD SET UP ITS 100% EOU AFTER OBTAINING DUE APPROVALS FROM ALL THE RESPECTIVE DEPARTMENTS. IT ALSO SUBMITTED COPIES OF IMPORT - EXPORT CODE, CENTR AL EXCISE AND CUSTOMS AND COCHIN SPECIAL ECONOMIC ZONE APPROVAL, FOR VERIFICATION. IT FURTHER CONTENDED THAT 100% EOU WAS SET UP AT THE SITE OF NADEEM MINERALS ITSELF TAKING A LAND ADMEASURING 2.78 ACRES ON LEASE. THE 1 00% EOU IS UNDER DIRECT CONTROL AND SU PER VI SION OF THE CUSTOMS AND CENTRAL EXCISE DEPARTMENT AND THE CUSTOMS AND CENTRAL EXCISE AUTHORITIES INSPECT THE REMOVAL OF GOODS FROM 100% EOU SITE. THE APPELLANT HAS ALSO COUNTERED THE CONCLUSIONS DRAWN BY THE A.O. IN ITS SUBMISSION, REPRODUCED EARLIER IN THIS ORDER R EGARDING NEGATIVE STOCK, THE APPELLANT, CONTENDED THAT IT APPEARS AS PER BOOKS THAT STOCK IS IN NEGATIVE BECAUSE QUANTITY RECEIVED WAS ACCOUNTED SUBSEQUENTLY THAN THE SALE QUANTITY. ON LEGAL GROUNDS ALSO, THE APPELLANT CLAIMED THAT THERE ARE TWO CONDITIONS FOR CLAIMING DEDUCTIO N U/S.1OB: I) THE UNIT SHOULD BE 100% EXPORT ORIENTED UNIT. II) IT SHOULD MANUFACTURE OR PRODUCE ANY ARTICLES OR THINGS. THE APPELLANT HAS SATISFIED BOTH THE CONDITIONS AS IN ITS 100% EOU, IT DOES PROCESSING AND BLEND ING SO THAT THE CRUDE ORE BECOMES SALEABLE. IN MY OPINION, THE A.O. HAS ALSO NOT DENIED THE EXISTENCE OF 100% EOU UNIT BELONGING TO THE APPELLANT. AND THE APPELLANT HAS PROVED THAT IT HAS PROCESSED AND ENRICHED THE IRON ORE PURCHASED FROM NADEEM MINERALS T O MAKE IT OF SALEABLE GRADE. IN A RECENT JUDGEMENT THE JURISDICTIONAL ITAT PANAJI IN THE CASE OF SESA GOA DECIDED THAT PROCESSING OF IRON ORE SHALL AMOUNT TO PRODUCTION AND THEREFORE SUCH 100% EXPORT ORIENTED UNITS SHALL B E ELIGIBLE FOR DEDUCTION U/S. 10 B. EXISTENCE OF 100% EOU IS PROVED THROUGH DOCUMENTS CERTIFIED BY VARIOUS DEPARTMENTS. IN VIEW OF THE ABOVE FACTS, IN MY OPINION, THE 100% EOU UNIT OF THE APPELLANT HAS FULFILLED THE CONDITIONS A ND ARE ELIGIBLE FOR CLAIM U/S.10 B OF THE ACT. 6 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 DURING THE COURSE OF SEARCH PAPERS WERE FOUND CAPTIONED DAILY OF TRANSPORTATION OF IRON ORE, WHICH CONTAINED DATEWISE INFORMATION OF IRON ORE TRANSPORTED ON VARIOUS LORRIES ALONGWITH THE WEIGHT OF ORE BEING TRANSPORTED. THERE WAS OVER WRITING ON THE HEAD. NADEEM MI NERALS WAS OVER WRITT EN AS MUKTAR MINERALS PVT. LTD. THE A.O. REACHED CONCLUSION ON THE BASIS OF THESE LOOSE - PAPERS, FOUND DURING THE CASE OF SEARCH AND STATEMENT OF EMPLOYEE TAKEN ON 28.03.20 14 THAT THE ORE HAS DIRECTLY BEEN TRANSPORTED FROM M/S. NADEEM MINERALS TO THE PORT. HOWEVER, THE A.Q. DID NOT APPRECIATE THE FACT THAT M/S. MUKTAR MINERALS OPERATES FROM THE SITE OF M/S NADEEM MINERALS ONLY AND 100% EOU IS LOCATED ON PLOT BUSINESS OF THE SAME SITE. IN VIEW OF THE FACT THAT THE 100% EOU IS LOCATED ON THE SAME SITE AS TH AT OF NA DEEM MINERALS; THE NAME OF NADEEM MINERALS HAS BEEN CORRECTED BY STAMPING THE NAME OF M / S. MUKTAR MINERALS. SIN C E THESE SHEETS HAVE BEEN FOUND AT THE TIME OF SEAR CH ITSELF, THE OV ER WRITING CAN NOT BE SAID TO BE AN AFTER THOUGHT. IN VIEW OF OTHER EVIDENCES, AS DISCUSSED ABOVE, I AM OF THE OPINION THAT JUST BECAUSE OF OVER - WRITING, IT IS NOT PROVED THAT 100% EOU DOES NOT EXIST AND CLAIM OF EXEMPTION U/S.1OB CANNOT BE DENIED. IN THE R ESULT, THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED AND THE A.O. IS DIRECTED TO ALLOW A DEDUCTION AMOUNTING TO RS. 13,86,43,556/ - U/S. 10B OF THE ACT. 5. DEPARTMENTAL REPRESENTATIVE R E L I E D O N T H E O R D E R O F T H E ASSESSING OFFICER . 6 . T H E AUTHORIZED REPRESENTATIVE OF THE ASSESSEE A R G U E D T H A T IN THE M/S. S . M . CONSTRUCTION CONTRACT WITH NADEEM MINERALS IT IS MENTIONED THAT HE IS TO PRODUCE SALEABLE ITEMS LIKE FINES AND LUMPS. ONLY BY READING OF THESE PARAGRAPHS OF THE AGREEMENT THE ASSESSING OFFICER HAS INFERRED AN OPINION THAT FROM THE MINE ITSELF SALEABLE ITEMS HAVE BEEN EXPORTED WITHOUT ANY PROCESSING BY THE ASSESSEE. 7 . WHEN MINING IS DONE THE EXCAVATORS EXCAVATE SOIL WHICH IS DIVIDED INTO TYPES OF SOIL ONE SALEABL E AND THE OTHER NON - SALEABLE. NON - SALEABLE SOIL IS A VERY LOW GRADE ORE WITH HIGH CONTAMINATION OF QUARTZ AND LETTARITE WHICH IS ALSO CALLED ORE BURDEN IN TECHNICAL TERMS. SALEABLE ORE 7 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 IS IRON ORE WITH HIGHER FE CONTENT INCLUDES FINES AND PEBBLES AND LUMPS . THE EXCAVATOR GETS HIS PAYMENTS FROM M/S NADEEM MINERALS ONLY FOR THE QUANTITY OF SALEABLE ORES RAISED BY HIM WHEREAS HIS RESPONSIBILITY TO PROPERLY DISPOSE OFF NON - SALEABLE ITEMS AS PER MINING LAWS FOR WHICH HE DOES NOT GET ANY REMUNERATION. 8 . NOW ONCE THE SALEABLE GOODS ARE PRODUCED 50% OF THAT IS TRANSPORTED TO NADEEM MINERALS PRIVATE LIMITED AND 50% IS TRANSPORTED TO MUKHTAR MINERALS PRIVATE LIMITED. FROM THE INVOICES ATTACHED IT CAN BE NOTICED THAT THE TERM USED THER E IN IS SEMI PROCESSED IRON ORE OR ROM (RUN OF MINES). THESE SEMI PROCESSED IRON ORE OR ROM IS BEING CONVERTED INTO EXPORTABLE IRON ORE IN CUSTOMS BONDED WAREHOUSE WHICH IS HUNDRED PERCENT EOU UNDER THE SUPERVISION OF CUSTOMS DEPARTMENT. THE PROCESSES USED USUALLY ARE SCREENING, WAS HING, CRUSHING AND BLENDING DEPENDING UPON THE REQUIREMENT. 9 . THE A SSESSING O FFICER HAS NOT GIVEN ANY FINDING TO PROVE THAT THERE WAS NO MACHINE USED NOR ANY OF THE ABOVE PROCESSES WAS NOT CARRIED OUT AT THE CUSTOMS BONDED WAREHOUSE. HE HAS SIMPLY DRAWN INFERENCE ON THE BASIS OF AGREEMENT OF EXTRACTION WHEREAS COMPLETELY IGNORED THE A.R.G 1 AND OTHER DOCUMENTS COUNTERSIGNED BY THE DEPARTMENT OF CU STOMS AND CENTRAL EXCISE WHICH IS ALSO A GOVERNMENT DEPARTMENT RESPONSIBLE FOR COLLECTION OF INDIRECT TAXES. 1 0 . THE 2 ND BASIS ON WHICH THE ASSESSING OFFICER HAS DRAWN THE INFERENCE IS THE COPIES OF THE TRANSPORTATION LIST FAXED FROM EOU TO HEAD OFFICE AT GOA. IT APPEARS THAT ON THE TRANSPORTATION SLIPS THE ADDRESS MENTIONED IS NADEEM MINERALS SITE ON WHICH THE ASSESSEE HAS PUT A RUBBER STAMP MENTIONING MUKHTAR MINERALS PRIVATE LIMITED AND ITS ADDRESS. FROM THIS PIECE OF PAPER THE ASSESSING OFFICER HAS DRAW N AN 8 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 INFERENCE THAT THE ORES HAVE BEEN TRANSPORTED FROM THE MINE SITE AND NOT FROM THE EOU. TO PROVE HIS POINT ASSESSING OFFICER HAS RECORDED A STATEMENT ON 2 8 / 0 3 / 2 0 1 4 OF THE EMPLOYEE OF THE COMPANY ONLY TO CONFIRM FROM HIM WHETHER THERE IS OVERWRITING ON T HE PIECE OF PAPER WHICH THE EMPLOYEE HAS ADMITTED. IN THE SAID STATEMENT THE ASSESSING OFFICER HAS NEITHER ASKED NOR GOT ANY CONFESSION TO STATE THAT THE ORE IS BEING TRANSPORTED FROM THE MINE ITSELF AND NOT FROM THE EOU. ASSESSING OFFICER HAS COMPLETELY I GNORED THE JUSTIFICATION GIVEN BY THE ASSESSEE THAT A ) T HE SO CALLED TRANSPORT SLIPS HAS GOT DETAILS OF TRUCKS WITH TRUCK NUMBERS WHICH CARRYING 16 TO 18 TONS PER TRIP AND THESE HEAVY TRUCKS CANNOT GO TO THE MINE SITES. B ) THE TRANSPORT OF GOODS ARE MONITORED BY EXCISE DEPARTMENT AND THEY COUNTERSIGN THE A.R.G 1 FORM C ) THE TRANSPORT SLIP IS USUALLY PREPARED BY A GATEKEEPER OR A WATCH MAN WHO IS NOT EDUCATED ENOUGH TO UNDERSTAND THE RELEVANCE OF INCOME TAX ACT AND ITS REPERCUSSIONS. THIS SLIP SIGNIFIES ONLY THE QUA NTITY OF ORE TRANSPORTED EVERY DAY WHICH IS HELPFUL FOR SETTLING THE BILL OF THE TRANSPORT. 1 1 . WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD . IN THE INSTANT CASE, THE ASSESSING OFFICER HAS DENIED THE CLAIM FOR DEDUCTION UNDER SEC. 10B OF THE ACT TO THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS PURCHASED IRON ORE FINES/LUMPS FROM M/S.NADEEM MINERALS AND TRANSPORTED THE SAME FROM MINES TO PORTS FOR EXPORT WITHOUT ANY PROCESSING WHATSOEVER HAVING BEEN DONE TO IT. THEREFORE, HE DISALLOWED CLAIM FOR DEDUCTION UNDER SEC. 10B OF THE ACT TO THE ASSESSEE FOR 15,23,97,573/ - IN THE ASSESSMENT YEAR 2009 - 10, 2,07,95,834/ - IN THE ASSESSMENT YEAR 2 0 10 - 11 AND 6,64,96,180/ - IN THE ASSESSMENT YEAR 2011 - 12 O N T H E G R O U N D T H A T N O M A N U F A C T U R I N G O R P R O D U C T I O N W A S D O N E B Y T H E ASSESSEE W H I C H I S A C O N D I T I O N P R E C E D E N T F O R A L L O W I N G D E D U C T I O N UNDER SEC. 1 0 B O F T H E ACT . 9 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 1 2 . O N A P P E A L , COMMISSIONER OF INCOME TAX (APPEALS) O B S E R V E D T H A T T H E ASSESSEE H A S T A K E N A P L O T O F L A N D F R O M M/S. N A D E E M M I N E R A L S O N L E A S E , W H I C H I S S I T U A T E D I N A E O U A R E A A N D H A S I N S T A L L E D N E C E S S A R Y P L A N T A N D M A C H I N E R Y F O R E O U U N I T THEREIN . H E A L S O O B S E R V E D F R O M A . R . E . 1 W H E R E I N T H E C U S T O M A N D E X C I S E DEPARTMENT H A S C E R T I F I E D T H A T P R O C E S S E D I R O N O R E A N D F I N E S W E R E E X P O R T E D B Y T H E ASSESSEE . H E O P I N E D T H A T M E R E L Y B E C A U S E T H E R E W A S O V E R W R I T I N G O R C O R R E C T I O N I N T H E T R A N S P O R T S T A T E M E N T , I T C A N N O T B E H E L D T H A T T H E P R O C E S S E D I R O N O R E O R F I N E S W E R E T R A N S P O R T E D D I R E C T L Y F R O M M I N E S T O P O R T . I N V I E W O F T H I S , H E H E L D T H A T T H E ASSESSEE A C T U A L L Y P R O D U C E D O R M A N U F A C T U R E D I R O N O R E A N D F I N E S I N I T S U N I T L O C A T E D A T E O U A R E A A N D THEREFORE, E L I G I B L E F O R D E D U C T I O N UNDER SEC. 1 0 B O F T H E ACT I N A L L T H E T H R E E Y E A R S U N D E R A P P E A L . 1 3 . T H E DEPARTMENTAL REPRESENTATIVE S U P P O R T E D T H E O R D E R O F T H E ASSESSING OFFICER . 1 4 . W E F I N D T H A T DEPARTMENTAL REPRESENTATIVE C O U L D N O T P O I N T O U T A N Y S P E C I F I C E R R O R I N T H E O R D E R O F T H E COMMISSIONER OF INCOME TAX (APPEALS) . F R O M T H E R A I S I N G A G R E E M E N T P L A C E D A T P A G E S 5 7 T O 7 3 O F T H E P A P E R B O O K , I T I S O B S E R V E D T H A T T H E M I N E S W H I C H W E R E ALLOTTED T O M/S. M/S. N A D E E M M I N E R A L S B Y T H E G O V T . A R E L O C A T E D A T D O N I M A L A I R A N G E , B E L L A R Y D I S T R I C T . T H E ASSESSEE C O N T E N D E D B E F O R E U S T H A T T H E M I N E S A R E L O C A T E D A T H I L L Y A R E A A N D THEREFORE, F R O M T H E M I N E S T O H I S E O U U N I T W H I C H I S L O C A T E D A T B H U J A N G A N A G A R V I L L A G E , S A N D U R T A L U K , B E L L A R Y D I S T . I S T R A N S P O R T E D O N L Y B Y S M A L L T R U C K S C A R R Y I N G W E I G H T O F A B O U T 5 T O 6 M T . T H E B I G G E R T R U C K S C A R R I E S 1 6 T O 2 0 M T O F M A T E R I A L S C A N N O T P L Y O N T H O S E H I L L Y T R A C T . T H E T R U C K S B Y W H I C H G O O D S W E R E T A K E N T O P O R T A R E B Y T R U C K S C A R R Y I N G M A T E R I A L S A T A T I M E O F 1 6 T O 2 0 M T . T H U S , T H E I N F E R E N C E D R A W N B Y T H E ASSESSING OFFICER T H A T T H E G O O D S W E R E T R A N S P O R T E D D I R E C T L Y F R O M M I N E S T O P O R T I S N O T P R A C T I C A L L Y P O S S I B L E . T H E DEPARTMENTAL REPRESENTATIVE C O U L D N O T C O N T R O V E R T T H E A B O V E S U B M I S S I O N S O F T H E 10 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 ASSESSEE . F U R T H E R , T H E ASSESSEE E X P L A I N E D T H A T H I S A C T I V I T Y C O N S I S T E D S C R E E N I N G , W A S H I N G , C R U S H I N G A N D B L E N D I N G O F I R O N O R E C O N S T I T U T E S P R O D U C T I O N O R M A N U F A C T U R I N G W I T H I N T H E M E A N I N G O F S E C . 1 0 B O F T H E ACT A N D T H I S V I E W I S S U P P O R T E D B Y T H E DECISION O F T H E J U R I S D I C T I O N A L T R I B U N A L I N T H E C A S E O F S E S A G O A . T H E DEPARTMENTAL REPRESENTATIVE C O U L D N O T C O N T R O V E R T T H E A B O V E S U B M I S S I O N S O F T H E ASSESSEE . W E F I N D T H A T N O D I S A L L O W A N C E O F DEPRECIATION C L A I M E D B Y T H E ASSESSEE O N T H E P L A N T A N D M A C H I N E R Y F O R H I S BUSINESS O F 1 0 0 % E O U O R W A G E S O R P O W E R C O N S U M E D H A S B E E N M A D E I N T H E ASSESSMENT . I N T H E S E C I R C U M S T A N C E S , W E F I N D T H A T T H E R E I S N O C O N C R E T E M A T E R I A L O N R E C O R D T O S H O W T H A T N O M A N U F A C T U R I N G O R P R O D U C T I O N A C T I V I T Y W A S C A R R I E D O U T B Y T H E ASSESSEE I N I T S E O U U N I T . T HEREFORE, W E D O N O T F I N D A N Y G O O D R E A S O N T O I N T E R F E R E W I T H T H E O R D E R O F T H E COMMISSIONER OF INCOME TAX (APPEALS) W H I C H I S H E R E B Y C O N F I R M E D A N D T H E G R O U N D S O F A P P E A L O F T H E R E V E N U E A R E D I S M I S S E D . 1 5 . THE ONLY GROUND OF CROSS OBJECTION TAKEN BY THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE ADDITION OF 8,46,294/ - BEING THE DISALLOWANCE OF EXPENSES INCURRED ON BUSINESS PROMOTION . 1 6 . WE HAVE HEARD RIVAL S U B M I S S I O N S AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON REC ORD . T H E COMMISSIONER OF INCOME TAX (APPEALS) C O N F I R M E D T H E A C T I O N O F T H E ASSESSING OFFICER I N D I S A L L O W I N G 8 , 4 6 , 2 9 4 / - B E I N G 5 0 % O F T H E E X P E N S E S I N C U R R E D O N PURCHASE O F G O L D C O I N S O N T H E B A S I S O F T H E STATEMENT O F T H E ASSESSEE G I V E N D U R I N G T H E C O U R S E O F S E A R C H , W H E R E I N T H E ASSESSEE A D M I T T E D T H E S A M E A S N O T I N C U R R E D F O R T H E P U R P O S E O F BUSINESS . 1 7 . BEFORE U S , T H E AUTHORIZED REPRESENTATIVE OF THE ASSESSEE C O U L D N O T P R O D U C E A N Y M A T E R I A L T O S H O W T H E AMOUNT I N Q U E S T I O N W A S A C T U A L L Y I N C U R R E D F O R T H E P U R P O S E O F BUSINESS O F T H E ASSESSEE . I N A B S E N C E O F A N Y 11 IT (SS) A NO S . 34 - 36 /P A N/201 5 C.O.NO.72/PAN/2015 S U C H M A T E R I A L , W E D O N O T F I N D A N Y I N F I R M I T Y I N T H E O R D E R O F T H E COMMISSIONER OF INCOME TAX (APPEALS) W H I C H I S C O N F I R M E D A N D T H E G R O U N D O F C R O S S O B J E C T I O N O F T H E ASSESSEE I S D I S M I S S E D . 1 8 . IN THE RESULT, APPEAL S OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON MONDAY , THE 2 1 ST DAY OF MARCH , 201 6 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2 1 ST MARCH, 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI .