TMI Blog2023 (1) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... s more so the valuation as per the Form H1 is as at the mine head being the Ex-Mine Prices of the Fines/Ore. The turnover as disclosed in the return can in no way be compared with the Form H1 price. If admittedly there was a difference in the quantification of the stock then there was case of revision but that is not so in the impugned assessment year. This being so, as the method of accounting followed by the assessee is identical for the earlier assessment years, in view of the principle of consistency, we are of the view that the revisionary proceedings on this issue is unsustainable and consequently the same is hereby quashed. Inclusion of the value of the closing stock in the computation of the assessee - Admittedly, the adjustment to the closing stock for the relevant assessment year would require the identical adjustment in respect of the opening stock in the relevant assessment year also. CIT has not given such direction. The Tribunal is not competent to include an issue which has not been considered by the CIT in the revisionary proceedings. The ld. Pr.CIT has only directed for closing stock to be adjusted. This admittedly is not admissible in any case. The adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein the AO had assessed the income of the assessee at Rs.36.08 crores. It was the submission that the ld. Pr.CIT has proposed to revise the assessment order passed u/s.143(3) of the Act on the following grounds :- i) the Net Present Value (NPV) being the charges paid by the assessee to the Government for restoration mining area to its original status was liable to be treated as capital expenditure as revenue expenditure claimed by the assessee; ii) ld. Pr.CIT was of the view that there was difference between the Form H1 returned filed before the Dy. Director of Mines in respect of valuation of the ores mined and value as shown in the profit and loss account of the assessee and the difference was liable to be brought to tax and this had not been examined by the AO; iii) the closing stock of the opening stock in respect of certain iron ore fines had been shown at the same figure of Rs.5,69,13,648/- and this had not been examined by the AO; and iv) the closing stock of the iron ore was not disclosed by the assessee and consequently the ld. Pr.CIT had directed that the same was to be valued and incorporated in the assessment. 3. It was submitted by the ld. AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssa Mining Corporation (supra) wherein the Hon ble Apex Court finding was also included in considering the issue being payment to Government of India, Ministry of Environments Forest was entitling the assessee to continue its mining during the time of lease therefore was an expenditure on the direction of the Government and not because the assessee derived a long term benefit in doing so. There is no rule of thumb for determining whether the particular expenditure is capital or revenue when the assessee in order to continue enjoying the lease right has to abide by the Government Rules and Regulations as claimed by the DFO. The reason for such compensation is arising out the fact that the assessee has to carry out the deforestation on the lease hold land for making suitable for mining. In the process, the assessee incurs development cost for carrying out the long term mining and therefore, is furthering the cost of having incurred the revenue expenditure being the lease hold rights. We are also concerned on the issue on the premise that over burden charges paid for by the coal miners have been held to be revenue in nature when the coal excavated below the surface is the leasing ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsustainable and, therefore, the same is quashed. 7. In respect of second issue being the difference in the valuation of the iron ore as per the Form H1 and as shown in the return filed by the assessee. It was submitted by the ld. AR that for the earlier assessment year, being the assessment year 2014-2015, this issue was the subject matter of revision u/s.263 of the Act and the same was upheld by the coordinate bench of this Tribunal in ITA No.168/CTK/2019, dated 28.01.2022. It was the submission that in the consequential order the AO vide order dated 27.12.2019 had accepted the claim of the assessee and no addition had been made. It was the submission that the issue was to reconcile the difference between the sales turnover disclosed in its profit and loss account and the Form H1. It was the submission that this method has been consistently followed by the assessee and no deviation has been done by the assessee nor pointed out by the AO. It was the submission that as the reconciliation has been done and clarified for the assessment year 2014-2015 and similar method is being followed consistently, the revision now proposed of this issue is only for verification, which is not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is noticed that at the outset, the assessee has not been showing the value of the closing stock in any of the earlier years. Now in the current year including the valuation of closing stock would also required the inclusion of the value of the opening stock in the computation and only difference could have been brought to tax. This would in effect make adjustment to the immediately succeeding assessment year insofar as the closing stock would become the opening stock of the immediately succeeding year. It was submitted by the ld. AR that the ld. Pr.CIT has not directed the valuation of the opening stock nor the necessary adjustment to be done thereto. It was the submission that this is nothing but shifting the profits from the subsequent year to the current year only. It was the submission that this would only result in the shifting of the profit and the tax rate being the same the consequential adjustment would take place in the subsequent year, the variation if at all, would be the interest leviable u/s.234B 234C of the Act. It was the submission that the method of accounting followed by the assessee is consistent and such method should not be tampered with unless there is a v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. Pr.CIT was well within his jurisdiction to invoke his revisionary proceedings. 15. We have considered the rival submissions. A perusal of the para 6.2.2 of the ld. Pr.CIT s order shows that this issue of opening and closing stock of Rs.5.69 crores as appearing in the accounts of the assessee, was due to the case of the judgment of the Arbitration Tribunal and the stock has been carried forward since 2009 and the same has not been sold out. The assessee has not got the required clearance from the mining authority to sell the same due to some technical issues. This submission of the assessee has not been dislodged by the ld. Pr.CIT. This issue is an issue coming from the earlier assessment years. Admittedly for the relevant assessment year this issue is nothing but an issue of opening balance. Consequently, we are of the view that this issue is not an issue which can be considered for revision u/s.263 of the Act for the impugned assessment year. Consequently, the revisionary proceedings initiated by the ld.Pr.CIT on this issue stand quashed. In view of the above, the impugned order passed by the ld. Pr.CIT u/s.263 of the Act is hereby quashed. 16. In the result, appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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