TaxTMI 
TaxTMI 
2014 (7) TMI 1381
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....ght to have held that the A.O. was wrong in adopting the closing stock figures as per the statement furnished to the mining authorities. (c) Having in knowledge that the AO has accepted the valuation of closing stock as per the books of account of the appellant in the subsequent Assessment Years, the CIT(A) ought to have held that the action of AO in reducing the closing stock for the Assessment Year under consideration is not warranted. 3. (a) The CIT(A) legally erred in confirming the inference of the A.O. that the sale of iron ore of the value of Rs.1,84,63,388/- made to two export trading houses as a supporting manufacturer during the financial year 2000-2001 relevant to Assessment Year 2001-2002 were actually made in the financial year 2001-2002 relevant to Assessment Year 2002-2003 resulting in to denying the benefit of deduction u/s. 80HHC(1A) to the appellant for Assessment Year 2001-02. (b) The CIT(A) factually erred in confirming the A.O.‟s action for denial of benefit u/s.80HHC(1A) of the Act on the basis of analysis certificates dated after 31-03-2001 (involving 16645.65 WMT out of total 43379 WMT) though a reference to the aforesaid analysis reports show....
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....971/- as on 31.3.2001. The net profit in the year ended 31.3.2000 was 63.53%. The AO called for details of valuation of closing stock. The AO noted the method of taking stock of ore prevalent in Goa. As per the said method, ore quantity is determined by the surveyor on the basis of the length, width and height of the heap of iron ore. The surveyor gives the report giving the weight of iron ore. Accuracy of the report in terms of actual weight of iron ore may be + 5%. Other evidence available was monthly returns by the Assessee which the Assessee filed with the Directorate of Mines. The AO noted that in the monthly return the mine owners have to give details such as opening stock of ore (different grades), production/extraction of sales/exports of ores and the closing stock. On the basis of these returns, the Directorate of Mines collected Royalty. The Assessee filed the copy of the two monthly returns for the months of February, 2001 and March, 2001. On perusal of these two returns, the AO noted that no details in respect of opening stock, production/sale were given as all the three columns showed 'nil' and only the closing stock showed quantity of 2,51,232 MT of 59 grade iron ore.....
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.... given the credit to the Assessee in respect of value of the opening stock. We, therefore, do not find any merit in the submission of the ld. AR so far as the claim that the Assessee should be given credit for the opening stock. The AO in this case has reduced the closing stock as shown by the Assessee in the income tax return by the value of the opening stock as has been accepted by the Revenue in the earlier year. We noted that the Assessee has given an explanation subsequently that the stock of 2,51,232 tons of 59 grade iron ore as shown of Bimbol mine belonged to M/s. Sociedade de Fomento P. Ltd. The Assessee even though gave this explanation, but did not adduce any supporting evidence either before us or before the authorities below. If the Assessee has given an explanation, the onus lies on the Assessee to substantiate the explanation furnished by him. No doubt, the Assessee has filed the revised return with the Directorate of Mines showing quantity of stock at 2,51,232 MT. This evidence of filing revised return was filed by the Assessee before the AO as well as before the CIT(A). This is not fresh evidence. The Assessee informed the AO that on inquiry, M/s. Sociedade de Fome....
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....the AO disallowed the claim of the Assessee on the basis of the report of analysis in one case dt. 10.4.2001 bearing no. 274/2001, 275/2001 and 276/2001. We noted that so far as the report of analysis bearing no. 237/2001 dt. 29.3.2001 relating to 2223.54 MT in respect of sale made to M/s. Salgaonkar Mining Industries P. Ltd. is concerned, the sample was received on 24.3.2001. In respect of report of analysis bearing nos. 163/2001, 164/2001, 238/2001 and 239/2001 in respect of sales made to M/s. V.S. Dempo & Co. Ltd. as detailed hereunder we noted that all these relate to sample received by the concern prior to 31st March and therefore these cannot be regarded to be sales made subsequently : Analysis Certificate Quantity No : 163/2001 Dt : 07.03.2001 2729.950 M. tons No : 164/2001 Dt : 07.03.2001 11355.770 M tons No : 238/2001 Dt : 29.03.2001 7996.760 M. tons No : 239/2001 Dt : 29.03.2001 2427.630 M. tons 4.2.1 We have also gone through the report of analysis bearing nos. 251/2001, 274/2001, 275/2001 and 276/2001 as detailed below. Analysis Certificate Quantity No : 251/2001 Dt : 03.04.2001 2346.020 M. tons No : 274/2001 Dt : 10.04.2001 5749.630 M tons No : 275/20....
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....tion (1B) derived by the assessee from the sale of goods or merchandise to the Export House or Trading House in respect of which the certificate has been issued by the Export House or Trading House." From the perusal of the said section it is apparent that the section allows the supporting manufacturers to claim deduction of the profit derived by it from the sale of the goods or merchandise to the export houses or trading houses in respect of which the certificate has been issued by the export or trading house. There is no compulsion whatsoever that the export house has to necessarily export the goods only in that year in which it has purchased the goods from the supporting manufacturers. The fact that the certificate has been issued by the export houses prove that the goods purchased from the Assessee (supporting manufacturer) were ultimately exported and that should enable the supporting manufacturer to claim appropriate deduction under the section in the year of its supply to the export house. There cannot be any other interpretation of this provision. We, accordingly, set aside the order of CIT(A) and allow ground no. 3 taken by the Assessee and direct the AO to allow the cla....
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.....2001 were to the extent of Rs.75,75,693/- and there was debit balance of Rs.26,44,862/-. The AO added sum of Rs.49,30,831/- being the difference of creditors and debtors. CIT(A) reduced the addition to Rs.20,58,095/- on the basis that the Assessee has already settled liabilities to the extent of Rs.28,72,736/- upto 31.3.2010 either by making payment or by writing back the sum but sustained addition of Rs.20,58,095/- which relate to the unrecovered advances. We may clarify that so far the claim of the Assessee in respect of unrecovered advances are concerned, the Assessee can claim deduction only u/s 36(1)(vii) in the year in which these debts have been written off by the Assessee in his books of accounts. It is an undisputed fact that the said amount has not been written off by the Assessee during the impugned assessment year. So far as the addition made u/s 41(1) is concerned, the onus, in our opinion, lies on the Revenue to prove that the liability has ceased during the impugned assessment year. Merely liability has become barred by limitation will not prove that the liability of the Assessee has ceased. The liability ceases when it has become barred by limitation and Assessee h....