2015 (8) TMI 1376

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....ion of closing stock of low grade iron ore. 3. Brief facts of the case are that the Assessing Officer observed that the assessee has given working of closing stock which is as under:- High Grade M.T. Total cost incl. Tailing Value as per books Difference to be  added Fines 409409 35826155 3654739 -721284 Lumpy 37611 3291226 3357488 -66262 Low Grade         Fines 145364 7353920 7499564 -145644 Lumpy 66272 3352680 3419487 -66807 ROM-Lumps 95365 3600363 3684368 -84005 ROM-Fines 271692 10257324 10496654 -239330 Low Grade         Tailing 71730 2708059 0 ....

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....hese circumstances, low grade iron ore is still becomes the stock of the assessee for the year ending 31/03/2006. Since the assessee has filed the return of income declaring higher income, the same cannot be reduced in any manner either by filing revised return of income along with final accounts, as the same was audited accounts. The Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT reported in 284 ITR 323 held that the assessee cannot reduce his returned total income by filing a letter/revised computation. The only option available to the assessee is reducing the total income by filing a revised return under sec. 139(5), which option is not availed by the assessee in the present case while the re-assessment proceedings have....

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....dered as opening stock by the Assessee, a reconciliation of the stock is as under: (Quantity in MT) Particular HG Fines-60% HG Fines+ 60-62 HG Fines+ 62% Lumps Total   Opening stock as on 1st April, 2005 4,50,786 26,358 1,26,544 1,73,004 7,76,692   Production 7,29,897 49,300 2,66,467 3,39,856 13,85,520   Despatch/Sales 7,63,627 59,260 - 3,13,612 11,36,499   Closing stock 4,17,056 16,398 3,93,011 1,99,248 10,25,713       For the A.Y. pertaining to F.Y. 2005-06, the A.O. has accepted the quantity of 1,025,713 metric tonnes however made addition of Rs. 13,84,727/- on account of tail....

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....2008 dated 7.0&2009 decided the issue of low grade and lumpy ore with the following concluding remarks: "We have considered the rival submissions and perused the facts on record. It is well recognised principle of commercial accounting to enter in the P&L Account the value of stock in trade at the beginning and end of the accounting year at cost or market price, whichever is lower. For the purpose of ascertaining the profits and gain the ordinary principles of commercial accounting should be applied so long as they are not in conflict with the provisions of the relevant statutes. Admittedly, the assessee is in the excavation of iron ore and the iron ore is of different grades. As per the norms iron ore with less than 60% FE content....

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....ting. Since there is no distortion to the profits of the assessee in any of the year and since the assessee has been consistently accounting sale of low grade iron ore in the year of realisation both in production figures as well as sale figures we are not persuaded by the logic of the CIT (A) in confirming the addition. Since the assessee has consistently following the method of accounting and no such addition has been made in earlier years, even though the assessee is in the business for so many years, we are not persuaded by the contention that the assessee would get benefit of opening stock in the following year. In fact the correct procedure which could have been followed by the A.O. is to consider the amount of opening stock of low gr....