9911796707
TMI Blog2015 (8) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Brief facts of the case are that the Assessing Officer observed that the assessee has given working of closing stock which is as under:- High Grade M.T. Total cost incl. Tailing Value as per books Difference to be added Fines 409409 35826155 3654739 -721284 Lumpy 37611 3291226 3357488 -66262 Low Grade Fines 145364 7353920 7499564 -145644 Lumpy 66272 3352680 3419487 -66807 ROM-Lumps 95365 3600363 3684368 -84005 ROM-Fines 271692 10257324 10496654 -239330 Low Grade Tailing 71730 2708059 0 2708059 4. From the above table, the Assessing Officer observed that the assessee has not properly valued its closing stock. There ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income declaring higher income, the same cannot be reduced in any manner either by filing revised return of income along with final accounts, as the same was audited accounts. The Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT reported in 284 ITR 323 held that the assessee cannot reduce his returned total income by filing a letter/revised computation. The only option available to the assessee is reducing the total income by filing a revised return under sec. 139(5), which option is not availed by the assessee in the present case while the re-assessment proceedings have been initiated by issuance of notice under sec. 148 of the Act. Therefore, the reduction in total income of Rs. 3,20,40,964/- is not in compliance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,50,786 26,358 1,26,544 1,73,004 7,76,692 Production 7,29,897 49,300 2,66,467 3,39,856 13,85,520 Despatch/Sales 7,63,627 59,260 - 3,13,612 11,36,499 Closing stock 4,17,056 16,398 3,93,011 1,99,248 10,25,713 For the A.Y. pertaining to F.Y. 2005-06, the A.O. has accepted the quantity of 1,025,713 metric tonnes however made addition of Rs. 13,84,727/- on account of tailing stock of 71,730 MT while completing the assessment under section 143(3). Hence, no further addition on account of low grade ore and lumps made by the Assessing Officer under section 148 r.w.s. 143(3) is uncalled for and order of the Assessing Officer is required to be deleted. As desired by your h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or market price, whichever is lower. For the purpose of ascertaining the profits and gain the ordinary principles of commercial accounting should be applied so long as they are not in conflict with the provisions of the relevant statutes. Admittedly, the assessee is in the excavation of iron ore and the iron ore is of different grades. As per the norms iron ore with less than 60% FE content is considered as low grade iron ore which has no realisable market and assessee is not bothered to account for it or for processing of beneficiation, etc. for the purpose of marketing or export. Thus the unmarketable product in the form low grade iron ore emerges in the process of producing the main product, i.e. high grade iron ore. This low grade iron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y following the method of accounting and no such addition has been made in earlier years, even though the assessee is in the business for so many years, we are not persuaded by the contention that the assessee would get benefit of opening stock in the following year. In fact the correct procedure which could have been followed by the A.O. is to consider the amount of opening stock of low grade iron ore also while bringing to tax the entire stock available, which might have been produced over a period of many years, in the closing stock of this year which certainly distort the profits of this year. Since we are not in agreement with the addition of closing stock of unrealisable low grade iron ore, we have no hesitation in deleting the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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