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04-06-2019, Orissa Mineral Development, Section 139, 148, 147, Tribunal Kolkata

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3 months 2 weeks ago #9663 by amit
Section - 139, 148, 147, 234B, 234D
Order Date - 04-06-2019
Favouring - Revenue
Court - Tribunal Kolkata
Appellant - ACIT
Respondent - Orissa Mineral Development Co. Ltd.
Justice - A.T.VARKEY, JM & DR. A.L.SAINI, AM
Citation - 619Taxpundit79
Appeal No. - ITA Nos.826,827&828/Kol/2017
Asstt. Year - 2008-09 to 2010-11

Order

PER : Dr. A. L. Saini

These three appeals preferred by the Revenue and three cross objections filed by the assessee against the order of the Ld. CIT(A)-2, Kolkata for assessment year2008-09 to 2010-11.

2. Since in all the appeals of Revenue, common and identical issue are involved, therefore there have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. Revenue’s appeal in I.T.A. No. 827/Kol/2017, for assessment year 2009-10, is taken as the “lead” case.

3. The ld. DR drew our attention to the revised groundsraised by Revenue for A.Y. 2009-10, which are as follows:

1. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in deleting the addition of understatement of mining production of iron ore to the extent of 319997.65 MT and amounting to Rs. 940107016/- ignoring M B Shah Commission’s Report

2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in deleting the addi ion on account of un-reconciled difference in sales figures of 319997.65 MT amounting to Rs. 940107016/- ignoring M B Shah Commission’s Report.

3. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in deleting the addition on account of undisclosed sales of manganese ore of 151.250 MT amounting in value to Rs. 90,435/- ignoring M B Shah Commission’s Report

4. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in deleting the addition under the head ‘under statement of opening stock’ to the extent of 519157.390 MT amounting to Rs. 1525209653/-.

5. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in deleting the addition under the head unexplained retrieved stock of iron ore to the extent of 1215500 MT amounting to Rs. 3570963968/-.

6. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in allowing the assessee’s appeal despite non reconciliation of the figures at Part V Serial NO. 2 of the IBM returns with the figures at Serial no. 5 Part V of the IBM return.

7. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in allowing the assessee’s appeal despite the assessee changing the figures of opening stock and closing stock in the revised IBM returns, and revising the grade-wise breakdown of production and despatch.

8. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in fact and in law in allowing the assessee’s appeal in the face of discrepancies in closing stock pointed out by the Auditor in Col 10 of notes on accounts of the Auditor’s Report.

9. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in appreciating the substance of the remand report without remanding the case for further verification.

10. That the appellant craves for leave to add, delete and modify any of the grounds of appeal before or at the time of hearing.”

4. At the outset itself, the ld. DR for the Revenue brought to our notice that ground Nos. 1, 2 and 6 are interlinked and contain connected issues which can be disposed off together and ground No. 3 can also be decided together because of similar issues and facts.

5. The main grievance of the Revenue is against the action of the Ld. CIT(A) in deleting the addition of Rs. 94,01,07,016/ alleging understatement of mining production of iron ore (ground Nos. 1, 2 and 6) and of Rs. 90,435/- alleging undisclosed sales of manganese ore (ground No.3).

6. Before the facts are s ated, the attention was drawn by the ld. Senior Counsel appearing for the assessee(M/s Orissa Minerals Development Corporation (hereinafter referred to as OMDC), and brought to our notice that the Assessing Officer has not made any addition in respect of understatement of mining production of iron ore. According to him, the addition was made by the Assessing Officer on the undisclosed sales of iron ore and drew our attention to page No. 4 of assessment order wherein sub-heading is given as ‘ undisclosed sales’. Our attention was also drawn to page No. 5 of assessment order wherein the difference in iron ore sales is given under the chart which is stated as 319,997.650 MT. Thereafter, it was pointed out by the ld. Senior Counsel that the amount of Rs.94,01,07,016/- has been calculated by multiplying 319,997.650 mt x 2973.756 (average sales of iron ore), therefore,according to ld. Senior Counsel, the addition has been made on the undisclosed sales of iron ore and not on the understatement production as stated in the grounds of appeal.

7. Per contra, the ld. CIT DR for the revenue drew our attention to the page No. 7 of the assessment order and brought to our notice that though in fact the Assessing Officer has made the addition of Rs. 94,01,07,016/- under the heading of undisclosed sales, however when he made the addition, he has made an averment that ‘since understatement of production has added to the coffers of the assessee company” Therefore, the Assessing Officer must have made the grounds accordingly.

8. After given our thoughtful consideration to the contention made before us, we understand that the ground No. 1 of the revenue though has stated that the addition was for understatement of mining production of iron ore, we note that it is for understatement of undisclosed sales of iron However, since the assessee has not objected to the grounds of appeal we make the necessary corrections and proceed to dispose off, the appeal and ground no.1 should be in ‘place of understatement of mining production of iron ore as ‘understatement of undisclosed salesiron ore’.

9. Brief facts of the case as noted by the Assessing Officer is that the assessee company which is a government company had filed its return of income declaring total income of Rs. 287,33,57,160/- . The Assessing Officer noted that the assessment was completed on 29.12.2011 u/s 143(3) of the Act. Later on, notice u/s 148 was served upon the assessee and the assessment was reopened. [legal issue of reopening is challenged before us by assessee by filing cross objections.]. Thereafter, the Assessing Officer noticed that there has been undisclosed sales by the assessee which he understood after perusal of the dispatch figures as per books which included only saleable ores whereas Indian Bureau of Mining (hereinafter referred to as IBM) and IBM returns included figures of both saleable and nonsaleable ores. According to Assessing Officer there is a mismatch between the saleable and sold ores. The Assessing Officer noticed that non-saleable ores for figuring in sale figures cannot be accepted and Assessing Officer states that the

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