TaxTMI 
TaxTMI 
2014 (11) TMI 230
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....ransaction 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 pending 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 rates charged and reasons for selling the ore at old rates. 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 agreement of marketing contract 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 ....
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....ess of what 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 reversed for the entire financial year after the Board Resolution of 18th of March 2008. He, thereafter, held that 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, 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 what 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, has 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 consi....
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....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. Kalyani 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 accounting 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 accordingly 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 having 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 repor....
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....tual price received by the assessee only shall be treated as income of the assessee during the relevant assessment year as the assessee has to offer difference of price charged on 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 case, the MMTC rate was Rs. 1250/- PMT whereas the assessee had sold ore to 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 agreements between the assessee and M/s.Kalyani Steels Ltd., and also M/s.Shivashankar Minerals, are similar and the fixation of price of ore was also 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 ta....