TMI Blog2017 (12) TMI 1816X X X X Extracts X X X X X X X X Extracts X X X X ..... RT ] Thus, it is clear that the sale proceeds had accrued to the appellant only by virtue of the order of the Director of Department of Mines and Geology vide proceedings No.DMG/MONCOM/E-Auction/2012- 13 dated 03.01.2013. The taxability or otherwise of it can be considered only during the period ending on 31.03.2013, whereas the assessment year before us is pertaining to the previous year ending on 31.03.2012. As appellant had offered an income which is not assessable for that year. Even after the deductions, there was income offered to tax which is not otherwise assessable for the assessment year under consideration. It is the duty of the AO to assess the correct income in the right assessment year. However, this failure of the AO had not resulted in any prejudice to the revenue. Therefore, the assessment order passed by the AO, though erroneous, but cannot be termed as prejudicial to the interests of revenue - pre-conditions for invoking the provisions of section 263 of the Act, the twin conditions that order is erroneous and also prejudial to interests of revenue are required to be satisfied simultaneously - Decided in favour of assessee. - ITA No. 158/Bang/2017 - - - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of E-auction sale proceeds of ₹ 14,68,19,400/-. Against the said return of income, the assessment was completed by the ACIT, Circle-1, Bellary vide order dated 01.08.2014 passed under section 143(3) of the Act. After making an ad ITA hoc disallowance of ₹ 25,00,000/-, there were no further proceedings on this assessment as the ad-hoc disallowance was made on concession. 3. While the matter stood thus, the learned Principal CIT, issued a show cause notice dated 12.05.2015 under section 263 of the Act proposing to revised assessment order, as the Assessing Officer had failed to assess the amount of ₹ 2,59,09,307/- being 15% of proceeds of E-auction of Iron Ore of ₹ 17,27,28,707/-. This amount was deducted by the Central Empowered Committee (CEC) towards the special purpose vehicle. The Principal Commissioner was of the opinion that this amount is an application of income and therefore cannot be allowed as a deduction. Subsequently, a revised show cause notice dated 16.03.2016 was issued wherein the learned Principal CIT held that apart from 15% of the E-auction sale proceeds, a further sum of ₹ 6,05,00,000/- paid by the appellant-firm as a penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment in accordance with law after giving the necessary opportunity to the assessee. 5. Being aggrieved, the appellant is before us with the present grounds of appeal. The learned counsel for appellant vehemently contended that this issue was examined by the AO during the course of assessment proceedings and he drew our attention to page Nos. 14 and 15 of the paper book wherein the assessee had explained the transaction of sale of Iron Ore through E-auction, to the AO. He further submitted that the claims made by the assessee are obvious in the return of income and therefore the AO had passed the impugned assessment order after detailed enquiry and had come to the conclusion that the same is allowable as deduction. Thus it was contended that the Principal CIT was not justified in invoking the revisional jurisdiction. On other hand, the learned CIT(DR) placed reliance upon the order of the Principal CIT. 6. We heard the rival submissions and perused the material on record. The issue in the present appeal is whether the Principal CIT was justified in invoking the revision proceedings under the provisions of section 263 of the Act. The learned Principal CIT sought to revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the Comprehensive Environment Plans for the Mining Impact Zone (CPEMIZ) around mining leases in Bellary, Chitradurga and Tumkur. The SPV would be under the Chairmanship of the Chief Secretary, Government of Karnataka and would have senior officers of the concerned departments of the State Government as Members. The SPV would function in a transparent manner and the accounts of the SPV would be subject to an annual audit by the CAG. A detailed scheme containing the details of the works to be undertaken, process of selection of implementing agencies, accounting procedure and other details of CEPMIZ may be directed to be prepared and submitted to this Hon'ble Court by the State of Karnataka, in consultation with the CEC within four weeks. The amounts received/retained by the Monitoring Committee towards (a) 10% of the sale proceeds, (b) compensation, (c) other receivable be directed to be transferred to the SPV (after its formation) for implementation of the provisions/prescriptions of CEPMIZ. 8. In the backdrop of above facts, we need to examine the taxability or otherwise of 15% of the E-auction sale proceeds retained by the Central Empowered Committee and the mon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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