TaxTMI 
TaxTMI 
2017 (12) TMI 1816
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....ter being satisfied, had passed an order under Section 143(3) and therefore exercise of revisional powers under Section 263 to substitute his view, year after years, was impermissible & un sustainable in the eye of law. 3. None of the twin conditions for invoking revisional powers under Section 263 being absent, the impugned order passed under Section 263 is clearly in violation and contrary to the law rendered by the Hon'ble Supreme Court in the cases of (a) Malabar Industrial Co., Ltd vs. CIT (2000) 243 ITR 83 (SC) and (b) CIT vs. Max India Ltd (2007) 295 ITR 282 (SC) and therefore, the impugned order is liable to be set aside. 4. Without prejudice, the assessing officer having adopted one of the possible views year after years, the exercise of jurisdiction under Section 263 by the CIT is not justified. 5. For these and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal may be allowed." 2. Briefly, the facts of the case are that the appellant is an individual engaged in the business of extraction and sale of iron ore. The return of income for the assessment year 2012-13 was filed on 28.09.2012 declaring income of Rs. 4....
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..... The learned Principal CIT also placed reliance upon the decision of Hon'ble Supreme Court in the case of CIT Vs. KCP Ltd., (245 ITR 421) in support of the proposition that the amount collected during the ordinary course of business should be taxed as a trading business and also placed reliance upon the decision of Hon'ble Supreme Court in the case of Madhya Venkataramana Pvt. Ltd., Vs. CIT (229 ITR 534) wherein it was held that the penalty paid for breach of any provision of law cannot be allowed as a deduction as the breach of the provision of law is not a necessary incident of the business. The learned Principal CIT also placed reliance upon the decision of the jurisdictional High Court in the case of CIT Vs. Mamatha Enterprises (266 ITR 352) and Millenium Developers Pvt. Ltd., Vs. DCIT (322 ITR 401) wherein the Hon'ble jurisdictional High Court held that the compounding fees paid for the violation of the rules of construction of buildings, is penal in nature and is not deductable. Thus the Principal CIT had come to the conclusion that the order of assessment is erroneous and prejudicial to the interests of the Revenue as the AO passed the assessment order without making any en....
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....e ban and permission was given for resumption of mining operation in category 'A' mines. Pursuant to the recommendation made by the Central Empowered Committee's report dated 28.09.2012 and in the Writ Petition No. 562/2009, the Hon'ble Supreme Court, vide its order dated 28.09.2012, dealing with the mining companies in category 'B', pursuant to the suggestion made by the amicus, the Hon'ble Apex Court's order and reports of Central Empowered Committee, the Hon'ble court passed the following order directing the leaseholders of mining to pay compensatory amount for illegal mining as well as illegal ore burden dumps and also guarantee money for implementation of R&R plan in the respective sanctioned leased areas and 15% of the sale proceeds towards setting up of SPV and also permitted the sale of the iron ore stock by E-auction. The relevant paragraphs of the order are as under: 7. It is also noted that the money retained at the rate of 15% of the E-auction sale proceeds is towards the setting up of special purpose vehicle. The purpose of special purpose vehicle is as follows: "Setting up of Special Purpose Vehicle (SPV) In paragraph 10(vi) of the amicus's note, it is state....
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....at the sale proceeds had accrued to the appellant though it was following mercantile system of accounting as there was no accrual of right to receive payment, having regard to the ratio laid down by the Hon'ble Apex Court laid down in the cases of CIT vs. Shoorji Vallabhdas & Co. (46 ITR 144), CIT vs. Birla Gwalior (P) Ltd. (89 ITR 266) Poona Electric Supply Co. Ltd. vs. CIT (57 ITR 521), R.B. Jodha Mal Kuthiala vs. CIT (82 ITR 570) and State Bank of Travancore vs. CIT (158 ITR 102). Thus, it is clear that the sale proceeds had accrued to the appellant only by virtue of the order of the Director of Department of Mines and Geology vide proceedings No.DMG/MONCOM/E-Auction/2012- 13 dated 03.01.2013. The taxability or otherwise of it can be considered only during the period ending on 31.03.2013, whereas the assessment year before us is pertaining to the previous year ending on 31.03.2012. Furthermore, the orders of Hon'ble Supreme Court imposing the compensation/penalty, empowering the Central Empowered Committee to retain 15% of the sale proceeds were also paid subsequent to the assessment year under consideration and interlinked with the transaction of E- auction sale proceeds. Th....
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....MSTC conducted the open bid sales on various dates, where by the prospective bidders were allowed to visit, in advance the respective mines whose ore was to be auctioned on the specified date, to inspect the ore for its quality & other details. On the date of the e-auction the prospective bidders bid for the iron ore over and above the base price fixed by the monitoring committee. The highest bidder was then allotted the material he bid for. The invoice for the said e- auction was raised by the Monitoring Committee, Dept of Mines & Geology, Khanija Bhavan, Race Course Road, Bangalore 560001, vide their TIN 29860633143. The successful bidders were asked to remit the value of the e- auction together with the Royalty, VAT, FDT & the Security Deposit with the MSTC. Thereafter the buyer was issued permit to transport the iron ore from the mines. 2) We hereby make it clear that at no time we have issued any sales invoice to E- auction buyers. Even the Vat returns for the above E-auction sales were filed by CEC. Ref. No. The assessee has declared in its trading account the net monet received from CEC. 4) In the letter dated 03/01/2013 CEC has r....
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....mps Rs. 28000000/ retained by CEC is towards waste accumulated dumps falling in other area apart from our lease area. The spreading of dumps in other area is natural because of natural calamities like. heavy rain and sliding of dump over a period of time. The amount retained is compensation in nature and allowable under the Income Tax Act. We have not done any illegal mining as mentioned in your letter dated 16.3.2016. Further the letter issued by Dept of mines and geology Bangalore have clearly mentioned as compensation, which is allowable under the I.T Act. 8) All these facts and papers were duly produced and filed before the A.O at the time of assessment U/s 143 (3). The A.O had properly applied his mind, considered all the facts and then completed the Assessment. Since the assessee has no control over the way an assessment order is drafted and since, generally, the issues which are accepted by the AO do not find mention in the assessment order and only those points are taken note of on which the assessee's explanations are rejected and additions disallowances are made, the mere absence of the discussion would not mean that the AO had....
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....try of Mines and the Ministry of Environment and Forests along with the Member Secretary, CEC shall co-opt two or three officers from the State Government. The Committee shall submit its report on the aforesaid issue through the CEC to this Court within three months from today. Court, The final determination SO made, on being approved by the shall be payable by each of the leaseholders. II. Guarantee money for implementation of the R&R plan in the respective sanctioned lease areas The CEC shall make an estimate of the expenses required for the full implementation of the R&R plan in each of the 63 'Category B' mines and each of the leaseholders must pay the estimated amount as guarantee for implementation of the R&R plans in their respective sanctioned lease areas and in the areas where they carried on illegal mining activities or which were used for illegal overburden dumps, roads, offices, etc. beyond the sanctioned lease area. In case, any leaseholder defaults in implementation of the R&R plan, it will be open to the CEC to carry out the R&R plan for that leasehold through some other proper agency from the guara....