TaxTMI 
TaxTMI 
2024 (9) TMI 1115
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....on record allude that there is sufficient force in the assessee's arguments. The delay in filing the appeal is therefore condoned and the appeal is being adjudicated as under. 3.0 Ground of Appeal number 1 is general in nature and hence does not requires any adjudication. 4.0 Grounds of appeal number 2-6 are centering around the twin disturbances made by Ld. AO on the valuation of closing stock and its deletion by the Ld. First Appellate Authority. 5.0 The first issue engrained in ground of appeal numbers 2-6 is regarding an addition of Rs. 2,51,93,262/- on account of under valuation of stock. The Ld. AO held the view that the assessee was required to value the closing stock of Karimnagar in parity with rates of closing stock at its TADA premises. Ignoring the arguments of the assessee that the Karimnagar stock was of comparatively inferior in quality as compared to TADA the Ld. AO made the impugned addition. On the said matter the Ld. CIT(A) has observed as under:- ".....The submissions of the appellant were considered vis-a-vis the findings of the AO. The AO held that the closing stock of raw block at Karim Nagar had been valued at Rs. 12,500/- per block whereas....
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....d copies of the invoices and shipping bills pertaining to TAN brown rough granite blocks and the other blocks such as "new imperial red" granites which were shipped to countries such as USA. Taking into account the facts, circumstances and the evidences furnished by the appellant, I find that there is considerable force in their submissions that the value of the granites mined at Karim Nagar are distinct as compared with those procured and used for production of slabs at Tada. Hence, the appellant's claim is found to be tenable. The disallowance made on account of under valuation of closing stock to the extent of Rs. 2,51,93,292/- requires to be deleted. This ground of appeal is allowed....." 6.0 We have heard rival submission in the light of facts of the case and material brought on records. The Ld. Counsel for the assessee, while reiterating the arguments which it had taken before the lower authorities drew our attention through his paper book, in support of its arguments, that there existed difference in the quality of granite sold and the corresponding price variation. We also note that the Ld. First appellate authority in his order supra, extracted herein above....
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....s-à-vis financials admitted by the assessee's. Rejecting the arguments, the Ld. AO made addition of Rs. 9,51,32,300/- by multiplying 2715.893 cu.m with Rs. 35028. 8.0 We have heard the rival submissions in the light of material placed on records. The Ld. AO would like to make us believe that the explanation given by the assessee was unacceptable by citing deficiencies noted in para 15.3 at page-3 of his order. The argument of the variation being customary in this line of business has been negated by the Ld. AO on the premise that the same was not included by the assessee in the mandatory Tax Audit Report filed u/s 44AB. The Ld. DR fiercely opposed the relief accorded by the Ld. First Appellate Authority by relying on the order of the Ld. AO. 9.0 The Ld. Counsel for the assessee stated that it is customary in this line of business where the assessees are required to pay, as per government rules seignorage fees on the entire blocks of stone excavated from mine. It was argued that the block of a stone for which seignorage fees was paid, cannot always be sold as it is that is to say every block would have some part which would be damaged or qualitatively inferior to the ex....
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.... were substantial reasons for the difference between the variation of output which is basically on account of the difference between the gross measurement of the granite blocks on which seigniorage fees were paid and the net measurement for which deductions were made by the buyer. Royalty/seigniorage fees is paid by the appellant on the gross measurement i.e on the granite blocks which were extracted from the mines whereas the blocks are sold on the net measurement as marked by the buyer. For instance, in Invoice No.3 dated 13/4/2018, the sale is for net measurement of granite block 280x150x150=6300 CBM whereas the corresponding transit form issued by the Department of Mines and Geology is on gross measurement 334x195x175=11.398 CBM. This comprises seigniorage fees and cess. Various such evidences were furnished by the appellant to substantiate their claim that the Mineral assessment by the Department of Mines and Geology was based on gross measurement on which seigniorage fees were charged by them whereas the sales invoices are raised based on net measurement as appraised or marked by the buyer after rejecting the defects and cuts in the blocks. Hence, this addition made on accoun....
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....d given relief therefrom without rendering the Ld. AO an opportunity of examining the same. Thus simply put the appellant Revenue has alleged that the Ld. CIT (Appeal) has violated provisions of Rule 46 A qua admission of additional evidence during appellate proceedings. 14.0 It is therefore imperative at this stage to examine legal stipulation governing rule 46A. "......46A. Production of additional evidence before the Deputy Commissioner (Appeals) and Commissioner (Appeals). (1) The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely :- (a) where the Assessing Officer has refused to admit evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer ; or (c) where the appellant was prevented by sufficient cause from producing befor....