TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 1050
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.... ITA No.971/2011 at the instance of the department are directed against the order of the learned CIT (A)-III, Bangalore dated 30.08.2011. The relevant assessment year is 2007-08. 2. These appeals are pertaining to the same assessee and arising out of the CIT(A)'s order dated 30/08/2011 and hence, they were heard together and disposed off by this consolidated order. ITA No.955/Bang/2011 (Assessee's appeal) 3. The assessee has raised four issues, namely: (i) Addition of ₹ 5,72,03,933/- be deleted. (ii) Addition to closing stock for assessment year 2006- 07 amounting to ₹ 1,17,71,039/- be treated as part of opening stock for assessment year 2007-08. (iii) Revised return filed be accepted and deductions claimed therein be allowed in entirety. (iv) Interest levied under section 234A, 234B and 234C be deleted. (i) Addition of ₹ 5,72,03,933/- as premium short accounted (ground no.1.1) No arguments were raised by both the parties in the course of hearing on this issue. Moreover, we find that the first appellate authority has clearly directed the Assessing Officer to check the return of income for the subsequent year and if it is found that the addition made in t....
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....8, the sum of ₹ 1,17,71,039/- should be considered as forming part of opening stock as on 1.4.2006. When the sum of ₹ 1,17,71,039/- is considered as forming part of opening stock as on 1.4.2006, the income assessed by the learned Assessing Officer for the year under consideration would be reduced to the extent of ₹ 1,17,71,039/-". 1.2 The CIT(A) after reproducing the Tribunal's order, which upheld the addition made on closing stock for the assessment year 2006-07, rejected the additional ground raised by the assessee company. The relevant finding of the CIT(A) reads as follows:- "24.0 In view of the findings in respect of excessive shortage claimed in the stock, the above disallowance was sustained. For the reasons given for sustaining the disallowance as above, does not warrant accounting for such shortage of closing stock as opening stock for the assessment year 2007-08. The appellant company itself claimed that there was shortage of stock which will not affect the value of stock since the appellant could not explain the shortage of minerals, the same was brought to tax for the earlier year i.e. AY 2006-07. Hence, the additional ground raised by the appellant ....
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....hareholders P. Ltd. reported in (2012) 349 ITR 336 (Bom.). 2.3 The learned DR present was duly heard. 2.4 We have heard the rival submissions and perused the materials on record. The assessee is entitled to raise a new issue that is not claimed in the return of income and the appellate authority has power to consider the claim not made in the return of income. For this proposition we are fortified by the judgment of the Hon'ble Bombay High Court in the case of CIT v Pruthvi Brokers and Shareholders P. Ltd. reported in (2012) 349 ITR 336 (Bom.). Hence, this issue is restored to the file of the CIT(A) to consider the claim of deduction on merits. It is ordered accordingly. In the result, ground no.3.1 is allowed for statistical purposes. (iv) Levy of interest under section 234A, 234B and 234C of the Act (Ground no.4.1) The levy of interest is mandatory and consequential and, hence, the above ground is dismissed. 3. Ground No.5.1 is general in nature and no special adjudication is called for and hence, this ground is dismissed. 4. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. ITA No.971/Bang/2011 (Revenue's appeal) 5. The effectiv....
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....der section 28 of the Act, as per the accounting policies followed by the company is consistent with Sec.145 of the Act. The scope of total income is also defined under section 5 of the Act. Only the "real income" is taxable under the provisions of the Act. What is to be taxed is only real income and not the hypothetical income. Income tax does not permit an Assessing Officer to impute income of an assessee without any evidence. Further, after taking into consideration of all facts and circumstances even if the alleged malpractice in realization of sales less than market price is proved to be true, the appellant company in no way has received the realization from sale of C-ores in excess of what is recorded in the books of accounts. In view of these facts, in my view, the addition made on account of sales to the parties below market rate after deducting assumed enhanced cost of extraction amounting to ₹ 47,79,19,585/- is not proper and not in accordance with law. Therefore, in view of these facts, the addition made to total income of ₹ 47,79,19,585/- is deleted. Similarly, addition of ₹ 2,26,03,642/- made in respect of Shivashankar Granites is also deleted". 5.3 ....