TaxTMI 
TaxTMI 
2023 (9) TMI 1117
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Income Tax Act, 1961 (for short, 'the Act') for Rs. 5,58,17,298/-. The AO has discussed this issue at para 3.2 in his order, the relevant part of which is as follows:- "The assessee debited to its P&L account royalty payable relating to the year under consideration to the tune of Rs. 6,07,50,740/-. However, on examination it has been found that royalty amounting to Rs. 5,85,17,298/-, which has been debited to the P&L account has not been actually paid by the assessee before the due date for filing return of income and is shown as liability in the balance sheet as "Royalty suspense account". On being confronted the assessee vide its reply dated 26.03.2015 states that "..... This royalty relates to the ore sold to Sister Companies like M/s. Salgaocar Mining Industries Pvt Ltd, Shantilal Khushaldas & Bros Pvt Ltd etc. and hence as assessee company has raised the debit notes to these companies for this Royalty amount in proportion to the Ore sold to them. This Royalty Suspense account has been credited by this amount and correspondingly these respective companies have been debited. There was no entry for this amount through p & L Account and hence the Profit and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Court has held in the case of Kutch Minerals (supra) that royalty would not be covered u/sec. 43B of the Act, we do not find any reason to interfere with the decision rendered by learned CIT(A) on this issue." Therefore, on the merits of the addition u/sec. 43B, the law laid down specifically by the decision of the Hon'ble Supreme Court in the case of State of West Bengal v. Kesoram Industries Ltd. [2004] 266 ITR 721 (SC) is that royalty is not tax. Further, the Hon'ble Gujarat High Court in the case of CIT v. Kutch Minerals [2008] 03 DTR 11 (Guj.) has held that royalty is not tax and hence the provisions of sec.43B would not be attracted. When the merits of addition under the said provision is not sustainable, then in such scenario, the issue whether there has been any violation of Rule 46A by the ld. CIT(A) while providing relief to the assessee on this very section itself becomes redundant and infructuous. Ld.DR also could not refute the said proposition of law as laid down by the Hon'ble Supreme Court (supra) by citing any decision favouring the Revenue. Accordingly, there is no infirmity in the order of the ld. CIT(A) on this issue and it is upheld. Hence, gro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....600 4,37,58,000 330 592 78499200 - do- - do- 51/51 1,10,900 3,65,97,000 330 592 65652800 - do- - do- 46/46 79,715 2,63,05,950 330 592 47~91280 - do- - do- 44/45 31,000 1,02,30,000 330 592 18352000 - do- - do- 45/55 67,000 2,13,73,000 319 603 40401000 - do- - do- 51/50 52,600 1,73,58,000 330 592 31139200 3 M/s Salitho Ores Pvt Ltd M/s Shantilal Khushaldas & Bro. Pvt. Ltd. 46/45 1,75,143 5,77,97,190 330 592 103684656 - do- - do- 46/45 1,73,500 5,72,55,000 330 592 102712000 - do- - do- 50/50 1,69,700 5,60,01,000 330 592 100462400 - do- - do -. 46/45 1,66,290 5,48,75,700 330 592 98443680 - do- - do- 51152 1,04,350 3,44,35,500 330 592 61775200 - do- - do- ROM Fe 6,710 21,40,490 319 603 4046130 Total 105,77,75,066 3.3.5 From the above table it is clear that the total suppression in sale value works out to Rs. 105,77,75,066/-. Therefore, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to another trader at a price less than the market price, the taxing authority cannot take into account the market price of those goods ignoring the real price fetched. In this case of the assessee, the AO has not alleged that the assessee has not offered its income for purposes of taxation in the return of income. The AO also has not doubted the transaction as such. It is also not the case of the AO that the assessee has earned more than it has offered to tax merely because the sale to sister concern is at a price lower than the sale price charged by the sister concern. In fact, the Hon'ble Supreme Court in the case of Calcutta Discount Company Ltd. (supra) has observed as follows:- "15. Several decades back the Madras High Court in the case of Sri Ramalinga Choodambikai Mills v. CIT [1955] 28 ITR 952 held that in the absence of any evidence to show either that the sales were sham transactions or that the market prices were in fact paid by the purchasers, the mere fact that goods were sold at a concessional rate would not entitle the income tax department to assess the difference between the market price and the price paid by the purchaser as profit of the assessee. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1,47,200 Part C-7(iv) of Policy 5,01,05,280 The aforesaid conversion charges were paid based on the "Policy" issued. The AO in the course of assessment, referring to the Policy document, required the assessee to explain why charges imposed as a result of unauthorised use of land in violation of the existing provisions of Land Revenue Code, 1968 with regards to conversion of land and use of land for non-agricultural purposes without permission of the prescribed authorities should not be disallowed. The AO held that since the Land Revenue Code stated provisions for procedure for conversion of use of land from one purpose to another and prescribed penalty for the same, and since the "Policy" was akin to the Land Revenue Code, the assessee did not follow the laid down provisions and as such payment of conversion charges were held to be paid for violation of law and were disallowed by AO u/sec. 37(1) of the Act. 13. Ld.senior counsel demonstrating through the gazette notification of Government of Goa, filed in the paper book, submitted that the conversion procedure has been undertaken as per the gazette and with this payment, there is change of user. No a....