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Dy. Commissioner of Income Tax Versus M/s Pal Stone Industries Pvt. Ltd.

2015 (7) TMI 282 - ITAT DELHI

Payment of royalty to Govt - addition made on account of undisclosed investment in the expenses under the head of transportation and labor charges for obtaining illegal stock - CIT(A) allowed part relief - Held that:- On vigilant reading of the order of the Tribunal in the case of M/s Swastik Stone Enterprises (2013 (1) TMI 737 - ITAT DELHI), we observe that in the similar facts and circumstances, the issue of expenses under the head of transportation and labour charges for obtaining illegal sto .....

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before the DM, Nainital, the same cannot be said to be final and conclusive. - Decided in favour of revenue for statistical purposes.

Disallowance of depreciation on vehicle - whether the depreciation cannot be allowable merely because the assessee has acquired the vehicle during the year but it should have been put to use for business for availing the depreciation - CIT(A) allowed claim - Held that:- The asset was undisputedly purchased and came in the possession of assessee within .....

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d against revenue. - ITA No.1587/Del/2013 - Dated:- 30-6-2015 - Shri J.S. Reddy and Shri Chandramohan Garg, JJ. For the Petitioner : Shri Vivek Wadekar, CIT (DR) For the Respondent : Shri Rahul Khare, Adv. ORDER PER C.M. GARG, JUDICIAL MEMBER This appeal by the revenue has been preferred against the order of the CIT(A)-II, Dehradun dated 14.01.2013 in Appeal No.140/HLD/2007-08 for AY 2007-08. The grounds raised by the revenue read as under:- 1. That the Ld. CITCA)-I1 has erred in law and on fact .....

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s. ₹ 86,348/- without considering the fact that the depreciation cannot be allowable merely because the assessee has acquired the vehicle during the year but it should have been put to use for business for availing the depreciation. Ground No. 1 2. Apropos ground no. 1, we have heard arguments of both the sides and carefully perused the relevant material placed on record. Ld. counsel of the assessee submitted a copy of the order of ITAT G Bench Delhi in ITA No. 4355/Del/2009 for AY 2005-06 .....

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from the impugned order of the CIT(A), we note that the CIT(A) granted relief to the assessee with following observations and conclusion:- 7.2 The averments of Ld. ARs and the finding of Ld. AO have been carefully considered. The Ld. ARs have also filed some documents from which the Ld. AO has arrived at the impugned figures of additions. A perusal of the facts reveal that the District Authorities have worked out the quantum of illegal mining on the basis of their own survey. Undoubtedly this ma .....

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ame set of documents from which the Ld. AO has worked out the undisclosed investment, it would be only fair to allow relief of ₹ 45,18,755/- against the impugned addition. Thus the Appellant gets relief of ₹ 45,18,755/- from the addition of ₹ 48,21,163/-. 4. On vigilant reading of the order of the Tribunal in the case of M/s Swastik Stone Enterprises (supra), we observe that in the similar facts and circumstances, the issue of expenses under the head of transportation and labou .....

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s of forest department, PWD and Revenue Department also surveyed the premises of the assessee company for verification of the stock. On the basis of findings as a result of survey, D.M., Nainital has passed an order dated 19.3.2005, wherein it has been held that the assessee company has illegal transportation of 10,715 cubic meters of stone grits for which compounding fees of ₹ 28,21,615/- have been levied. Based on these findings of DM, Nainital, the Assessing Officer has computed the sal .....

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he DM, Nainital who after having regard to the entire facts of the case has passed a speaking order determining the illegal transport of goods i.e. minor minerals to the tune of 10,715/- cubic meters for which compounding fees of ₹ 28,21,615/- was levied. Ld. Commissioner of Income Tax (A) noted that the against the above order of the DM, Nainital, assessee has filed the appeal before the Divisional Commissioner, Nainital, which is still subjudice before him. Considering the above, Ld. Com .....

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nnot be brushed aside. Further, DM, Nainital, being competent officer to evaluation such reports, I have no other fresh materials to differ from the finding of such authority and accordingly the addition made by the Assessing Officer towards the undisclosed profit and capital employed in the business to the tune of ₹ 11,14,179/- is hereby confirmed and no interference is called for. 5. Against the above order the Assessee is in appeal before us. 6. We have heard the rival contentions in li .....

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pon the orders of the authorities below. 6.1 We have carefully considered the submissions and perused the records. We find that the in the case of M/s Krishna Store Industries Pvt. Ltd. vs. DCIT (Supra) the tribunal had adjudicated the matter as under:- 4. In this case, the assessee company is engaged in the manufacturing and sale of stone grits. During the course of assessment AO noted that a survey was conducted on the premises of the assessee company by the forest department, PWD and revenue .....

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7; 5,04,363/- on account of illegal storage of mineral of 5045.93 cubic meter. Then DM, Nainital further imposed compounding fee of ₹ 26,43,371/- on account of illegal transportation of 10032.07 cubic metres of minerals. AO further noted that after considering the objections which are similar to the objections made before him, the DM, Nainital rejected the petition and confirmed the amount imposed upon assessee. Thereafter, the assessee filed the petition before the Divisional Commissioner .....

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s appeal ld. CIT(A) considered the issue and concluded that as of now, since the DM s order indicates the conclusive finding of the fact, he was not in a position to make any departure from the same. He further found that DM, Nainital being the competent authority to evaluate such reports, he had no material to differ the finding of such authority. Accordingly, he confirmed the addition. On the same analogy he confirmed the addition of ₹ 8,06,268/- on account of illegal transportation (un .....

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Nainital, the same cannot be said to be final and conclusive. 7.1 In this view of the matter, we remit the issue to the files of the AO to consider the same afresh after examining the appellate orders of the Divisional Commissioner, Nainital on this issue. Needless to add that the assessee should be granted adequate opportunity of being heard. 6.2 A reading of the above shows that facts in the present case are identical to the one adjudicated by the tribunal in the aforesaid order. In this case .....

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t the assessee should be granted adequate opportunity of being heard. 5. In view of above, we respectfully follow the order of the Tribunal (supra) and remit the issue to the file of AO to consider the same afresh after examining and considering the appellate orders of the higher authorities on this issue. The AO shall allow adequate opportunity of being heard to the assessee and shall decide the issue afresh without being prejudiced with the earlier assessment order and impugned order of the CI .....

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orting the impugned order of the CIT(A), has drawn our attention towards operative part para 5 and 5.1 of the impugned order and submitted that once it is established that the asset was used for the purpose of business, then it is to be presumed that it was put to use and ready for use in the assessee s business set up and, therefore, the CIT(A) was correct in allowing depreciation to the assessee. On careful consideration of above submissions, we note that the CIT(A) granted relief to the asses .....

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