Income Tax Appellate Tribunal - Kolkata
Narbheram Vishram, Jharkhand vs Acit, Central Circle - 4(2), Kolkata , ... on 21 February, 2020
ITA No. 685/KOL/2018 &
C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018)
Assessment Year: 2008-2009
M/s. Narbheram Vishram
IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA 'A' BENCH, KOLKATA
Before Shri P.M. Jagtap, Vice-President
and Shri Satbeer Singh Godara, Judicial Member
I.T .A. No. 685/KOL/2018
Assessment Year: 2008-2009
Assistant Commissioner of Income Tax,.... ......................................Appellant
Central Ci rcle-4 (2), Kolkata,
Aayakar Bhawan Po orva, 5 t h Floor, Roo m No. 506,
110, Shanti Pally, Ko lkata-700107
-Vs.-
M/s. Narbheram Vis hram,..............................................................Respondent
Gua, Singhbhum West, J harkhand-833213
[PAN:AABFN7217R]
&
C.O. No. 58/KOL/2018
(arising out of I.T.A. No. 685/KOL/2018)
Assessment Year: 2008-2009
M/s. Narbheram Vis hram,...........................................................Cross Objec tor
Gua, Singhbhum West, J harkhand-833213
[PAN:AABFN7217R]
-Vs.-
Assistant Commissioner of Income Tax,.... ......................................Respondent
Central Ci rcle-4 (2), Kolkata,
Aayakar Bhawan Po orva, 5 t h Floor, Roo m No. 506,
110, Shanti Pally, Ko lkata-700107
Appearances by:
Shri Dhrubajyoti Roy, JCIT, for the Department
Shri A.K. Tibrewal, FCA & Shri Amit Agarwal, Advocat e, for the assessee
Date of concluding th e hearing : January 07, 2020
Date of pronouncing the order : February 21, 2020
O R D E R
Per Shri P.M. Jagtap, Vice-President:-
This appeal is preferred by the Revenue against the order of ld. Commissioner of Income Tax (Appeals)-21, Kolkata dated 29.01.2018 and 1 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram the same is being disposed of along with the Cross Objection filed by the assessee being C.O. No. 58/KOL/2018.
2. The assessee in the present case is a partnership firm, which is engaged in the business of Mining of Iron Ore. In the assessment originally completed under section 153A/143(3) of the Income Tax Act, 1961 vide order dated 13.12.2012, the total income of the assessee was determined by the Assessing Officer at Rs.62,77,25,190/-. The assessment was subsequently reopened by the Assessing Officer on the basis of information available in Justice M.B. Shah Commission's report on illegal mining received from the office of DGIT (Investigation), which revealed that the assessee-firm had understated its actual production of quantity of iron ore for the year under consideration to the extent of 10,761 Metric Ton valued at Rs.2,79,29,422/-. The Assessing Officer accordingly issued a notice under section 148 on 17.02.2015 after recording the reasons. During the course of assessment proceedings, it was submitted on behalf of the assessee that the difference in the production of iron ore as allegedly pointed out by the Assessing Officer in the audited account was due to inter-grouping error. It was also submitted that the production of iron ore as shown in Shah Commission's report was erroneous. In order to verify this aspect, a notice under section 133(6) of the Act was issued by the Assessing Officer to the Manager of Paradeep Port Trust through which the iron ore was exported by the assessee. As per the reply received by the Assessing Officer from Paradeep Port Trust, total quantity of iron ore exported by the assessee during the year under consideration was 3,90,872 Metric Ton. Since the assessee had shown the total export of 3,82,872 Metric Ton in its books of account for the year under consideration, the Assessing Officer required the assessee to explain the difference in the export of iron ore to the extent of 8,000 Metric Ton. In reply, it was submitted by the assessee that the details of export of iron ore were also given by Paradeep Port Trust in their reply 2 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram for other years. It was pointed out that the export shown by Paradeep Port Trust in their reply was less by 23,000 Metric Ton and 47,600 Metric Ton in the previous year relevant to assessment years 2009-10 and 2010- 11 respectively than the export shown by the assessee. It was submitted that the Paradeep Port Trust thus might have shown some of the exports of A.Y. 2009-10 in the year under consideration i.e. 2008-09. This explanation offered by the assessee was not found acceptable by the Assessing Officer. He held that the difference of 8,000 Metric Ton in export was not properly reconciled by the assessee and by treating the same as the suppressed export sale of the assessee for the year under consideration, the value thereof amounting to Rs.2,93,18,510/- was added by him to the total income of the assessee in the assessment completed under section 147/143(3)/153A of the Act vide order dated 30.03.2016.
3. Against the order passed by the Assessing Officer under section 147/143(3)/153A of the Act, an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging the validity of the assessment made by the Assessing Officer as well as disputing the addition of Rs.2,93,18,510/- made to its total income on account of the alleged suppression of export sale.
4. After considering the submissions made by the assessee and perusing the material available on record, the ld. CIT(Appeals) did not find merit in the issue raised by the assessee challenging the validity of the assessment made by the Assessing Officer under section 147/143(3)/153A and rejecting the case of the assessee on this issue, he upheld the validity of the order passed by the Assessing Officer under section 147 for the following reasons given on pages 10 & 11 of his impugned order:-
"1. I have carefully considered the additio nal grounds taken by the appellant in the co urse of th e hearing. In th ese grounds it h as been contended th at the Ld AO h as erred in assuming jurisdiction in this case under section 147/148 of 3 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram the Inco me Tax Act , 1961 in absence of the mandatory conditions for assuming jurisdiction under section 147/148 of the Income T ax Act , 1961. It has been further contended th at the impugned Notice issued by the Ld AO under section 148 of the Income Tax Act, 1961 on 12 t h March, 2015, in the case of the assessee, was invalid, illegal , without jurisdiction and void ab initio and therefo re the impugned assessment o rder passed by him under section 147/143(3)/153A of the Act, in pursuance to such invalid notice is liable to be quashed. I have carefully considered the submissions of t he Ld. ARs of the appellant and th e reasons recorded by the Ld. AO for reopening th e income-tax assessment for the relevant A.Y. 2008-09. In the present case the proceedings u/s 147 were initiat ed aft er 4 years. The notice was issued afte r the expiry of four years from th e end of th e relevant assessme nt year and therefo re it was necessary to ensure th at co nditio ns prescribed in th e first pro viso to Section 1 47 were attracted. In terms of the said first pro viso the assessment could have been reopened only if there was failure o n the part of the assessee to disclose t ruly and fully all the facts necessary fo r assessing total inco me, which was chargeable to t ax fo r the relevant assessment year. In the present case in the object ions raised at appellate st age, the Ld. ARs cl aimed th at the Ld. AO did not provide the appellant with recorded reasons within reasonable time and t hereafter when the objections were filed he dispo sed the objections by passing an o rder in the perfunctory manner and that also just before the as sessment was getting barred by limitation. According to the l d. ARs of the appellant , the acts of the ld. AO were designed with pre- medit ated decision to compl ete the reassessment proceedings in violation of principles of nat ural justice.
2. In my co nsidered o pinio n the Inco me-t ax Act, 1961 nowhere stipulates th e time limit fo r dispo sing the object ions raised by the assessee to the reasons reco rded u/s. 148, Even the requirement for disposal of objections is a procedural requirement mandated by the Hon'ble Supreme Court i n its decisio n reported In GKN Driveshaft s (India) Ltd. vs. IT O (259 ITR 19). In the circumstances therefo re so long as th e Ld. AO passed an o rder disposing the objectio ns raised, It was sufficient compliance with the requirements laid down by the Hon'ble Supreme Court and th e mere del ay in disposi ng the objections cannot be t he reason to hold th e assessment invalid in law.
3. In the written submissions much emph asis was pl aced on the fact th at in the course of regular assessment u/s 143(3) of the Act , t he appellant had furnished det ails as requisitioned by the Ld. AO and as such t here was no failure on the part of the assessee to disclose t ruly & fully all fact s necessary fo r assessment . From the reasons set out under 4 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram Section 148, I find that the assessment was reo pene d pursuant to certain informatio n reaching ld. AO about certai n inco mes escaping assessment on the basis of the Justice M.B . Shah Commission report . The said order and information was passed on to the ld. AO and therefo re, th e same constituted fresh tangible material fo r reo pening the assessment to verify the amounts specified in the Commission Repo rt. In view of the above, it noted th at the formation of belief on th e ld. AO's part h ad a live & direct nexus with the information avail able in th e repo rt and such nexus could not be considere d to be far-fetched o r irrelevant , At the stage of fo rmation of belief, it was not necessary fo r the Ld. AO to come to conclusion or pro ve th at the amount was actually suppressed or that the inferences drawn by the Shah Co mmission were true and correct . At the stage of initiat ion of proceedings u/s 148 /147, all th at th e Ld. AO was required to demonstrate was that he was in possession so me credible & t angible material on the basis of which a prudent person pro perly inst ruct ed in l aw and o n fact s would h ave fo rmed reason to believe th at inco me had escaped assessment. Therefo re applying the true test regarding disclosure of all material fact s t ruly and fully, I am of the considered view and o pinio n that such disclosure was not made by the appellant when th e o rder u/s 143(3) was passed.
4. Fo r th e foregoing reasons therefore I am of the opinion that the Ld. AO rightly invoked provisions of Section 147 before issuing notice u/s 148 of the Income T ax act , 1961. Since, I have h eld th at the initiatio n of proceedings u/s 148 was valid and proper, the consequent o rder passed u/s 147/ 143(3)/153A dated 30,03.2016 is also held to be valid. Accordingly, I do not find merit in the additional G rounds Nos. 1 & 2, and the same are th erefore dismissed".
5. The ld. CIT(Appeals), however, found merit in the submission made on behalf of the assessee in support of its case that the addition of Rs.2,93,18,510/- made on account of the alleged suppression of export sale was not sustainable and deleted the same for the following reasons given on pages 15 to 18 of his impugned order:-
"4. I h ave carefully perused the submissions filed by the appellant against the impugned observatio ns of the Ld. AO. Th e question t o be addressed is whet her th e figures shown by the Paradeep Po rt Trust are to be t aken at face val ue as sacrosanct . I find th at th e Ld. AO himself does not believe so, as in certain other years he has adopt ed the figures disclosed by the appellant when they are higher. In my considered view the Ld. AO cannot pick and choose figures fro m either t he Port T rust st atement or the appellant' s 5 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram statement , as per his convenience. I find .t hat in this subject A.Y, the Ld AO h as t aken the figures of the Port Trust , but in two succeeding year AY 2 009-10 & 2010-11, he has t aken the figures from the assessee's books of acco unts, and discarded figures offered by th e Po rt Trust were on the l ower side vis-a-vis t he figures disclosed by the appellant . Therefore, from th e factual mat rix it emerges that the Ld. AO h as h imself not co nsidered the figures offered by the PPT as sacrosanct, and rathe r he has been compelled to t ake wh ich ever figures were h igher.
5. It may be worthwh ile to reproduce th e information as received by the Ld. AO fro m t he Port T rust, th e do cuments le ading to t he dispute.
Khatau Narbheram & Co. Narbheram Vishram
Fin. Year Quantity in FOB value in Rs. Quantity in FOB value in Total(1&2)
mt. Mt. Rs.
2006-07 161857 355979433 0 0
2007-08 346263 1280137601 44609 152335484 390872
2008-09 187569 697111558 56500 148844316 244069
2009-10 75758 316399811 146855 392801017 222613
2010-11 137400 724477735 34340 159440611
2011-12 27600 189242820 75800 440429125
2012-13 NIL NIL NIL NIL
2013-14 43200 221878440 NIL NIL
2014-15 NIL NIL NIL NIL
The differences th at emerge as follows:
1. In th e A.Y 2008-09, th e PPT has shown tot al figu re of export of 3,90,872 MT, whereas the appellant h as sh own figure of 3,82,87 2 MT, there being negative figure of 800 MT in th e books of the assessee.
2. In th e A.Y 2009-10, th e PPT has shown tot al figu re of export of 2,44,069 MT, whereas the appellant h as sh own figure of 2,67,06 9 MT, there being positive figure of 23,000 MT in the books of the assessee.
3. In th e A.Y 2010-11, th e PPT has shown tot al figu re of export of 2,22,613 MT, whereas the appellant h as sh own figure of 2,70,21 3 MT, there being positive figure of 47,600 MT in the books of the assessee.
4. The above clearly brings fo rth the merit in the appellant's contentions that th e figures of the Po rt Trust were not reliable, as there are differences for every year analysed, and the Ld AO has selectively picked the figure for the subject AY 2008-09 only for the reason th at the figure offered by the PPT was more by 800MT t han the figure disclosed in th e books of accounts of the assessee-appellant.
6. I h ave also considered the matter fro m the angle of possibility, namely whether there is any evidence available with the Ld. AO th at there h as been production beyo nd the disclosed amount s in the books which could h ave benne export ed, It is o bserved that the figures of production of iron o re as disclosed by th e Assessee-Firm in the audit ed books of accounts have been accepted by t he Assessing Officer. The Ld AO has himself accepted th e figures of production b y noting in the assessment o rder (Note 1, relevant for subject AY 2008-09) th at the 6 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram production as per Form No H-l filed by the appellant was accept able, as the " Regional Control ler of Mines h as confirmed that their Office h as no info rmation about the basis on which the Sh ah Commissio n had inferred different production (i.e. 11,74 ,680 MT as per assessee, and 11,85,441 as per the Justice Shah Commission Repo rt). Hence, their Office is not in a position to certify th e figures mentioned in th e Shah Commission Report . In view of th at th e production figure as per H -l is taken to be true." Therefo re, it is apparent th at the Competent Authorit y, namely t he Regional Control ler of Mines has already certified the production. As such there is very les s possibility of unrepo rted production by the assessee cont ribut ing towards the alleged excess and suppressed expo rt sales.
7. The appellant -firm has also been able t o submit the exact break up of exports to various parties realised th rough the Paradeep Port Trust . The bill dates, the names of the parties, th e quantit y and value as per shipping bills have al so been mentio ned. Th e said det ails are as under:
M/s. Narbheram Vis hram Details o f exports from the Paradeep Po rt during the FY 2007-08 (AY 2008-09) Bill Date Party's Name Qty (MT) FOB Value as per shipping bill (Rs.) 04.04.2007 Citic Australia Commodity 17500 43721563 Trading Pvt. Ltd.
27.05.2007 Visa Comtrade AG 21612 49449120
08.06.2007 Visa Comtrade AG 45630 137464299 23.06.2007 Sacvinam Global Ltd. 4811 8940762 03.07.2007 Sacvinam Global Ltd. 10400 25512115 17.07.2007 Golden World Enterprise 3500 10027001 Ltd.
28.07.2007 Golden World Enterprise 15000 42528840 Ltd.
12.08.2007 Visa Comtrade AG 22800 52991669 05.09.2007 Visa Comtrade AG 13009 30760352 07.10.2007 Golden World Enterprise 26900 103239994 Ltd.
26.10.2007 Golden World Enterprise 24700 94230327 Ltd.
04.12.2007 Visa Comtrade AG 18695 83076227 25.12.2007 Golden World Enterprise 25800 122355520 Ltd.
09.01.2008 Golden World Enterprise 15500 73508161 Ltd.
24.01.2008 Visa Comtrade AG 14050 63498975 22.01.2008 Golden World Enterprise 16050 72537975 Ltd.
28.01.2008 Visa Comtrade AG 30900 139652550 14.02.2008 Golden World Enterprise 24201 116803997 Ltd.
26.02.2008 Golden World Enterprise 20000 80680320 Ltd.
29.03.2008 Golden World Enterprise 11814 51779344 Ltd.
382872 140,27,59,111
8. Accordingl y, it is seen that the appellant has been able to list o ut the various parties to wh om export sales have been effected. There is merit in the submissions of the appellant th at the assessee cannot be expected to submit a reconciliation stat ement, as he h as submit ted all 7 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram the nitt y-gritt y det ail s. In my considered o pinio n, it was the Ld. AO to call fo r and obtain the detail s of the figures offered by the PPT, so that the differences of 800 MT along with details could have been offered to the appellant for reco nciliation. The details ought to have included the names and/or det ail s of the impo rters of the 8000 MT of iron ore allegedly exported by the Assessee Firm. T his h as not been done by the ld. AO.
9. I agree with th e appellant/ Ld A.R th at the appellant cannot be expected to discharge an impo ssible burden, as in such nebulous situat ions, the onus would be on the person who alleges, and not on the person against who m an allegatio n is made, especially wh en th e threadbare det ails have been offered. The Hon'ble Bombay High Court very long back, In th e case of CIT Vs Bombay Trust Co rpo rat ion 6 ITR 445 (Bom) had so observed, and in my co nsidered view the same still stand o n a firm footing. The maxim "lex non cogit as impossibilla" or that the law cannot compel a person to perform the impossible is, in my considered observat ion applicable In t his case. In the case of Krishnaswamy S. Pd. -vs.- Union of India [2006J 201 CTR (SC) 183 :
[2006J 281 ITR 305 (SC), the Hon'ble Supreme Court has held t hat the maxim act us curiae neminem garvabit, i.e., an act of Court sh all prejudice no man, is founded upo n justice and good sense which serves a safe and cert ain guide for the administration of law. Th e other relevant maxim is lex non cogit dimpossibilia - the law does not compel a man to do what h e cannot possibly perform. The law itself and its administration is understood to disclaim as it does in it s general apho risms, all intention of co mpelling impossibilities, and the administration of law must ado pt th at general exception in the consideration of part icular cases. The reliance of th e Ld. A.R on the decisio n of Hon'ble Supreme Court in th e case of Krish nanand vs The State Of Madhya Pradesh [AIR 1977 se 796] /(1977) 1 SCC 816 is found to be relevant in the emergent circumst ances of the case, and in my considered view no burden to reco ncile the alleged differences between his own figures and those supplied by th e Port T rust fo r the subject Assessment Year lay o n the appellant -firm.
For the reasons set out in the foregoing therefo re, I am unable to agree with the action of th e Ld. AO in making the impugned allowance of Rs.2 ,93,18,510/-, which stand delet ed. G round No. 1 tak en by the appellant-firm st ands allowed" .
Aggrieved by the relief allowed by the ld. CIT(Appeals) to the assessee, the Revenue has preferred this appeal before the Tribunal, while the assessee has also filed its Cross Objection raising the issue of validity of the assessment made by the Assessing Officer under section 147/143(3)/153A of the Act.8 ITA No. 685/KOL/2018 &
C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram
6. In support of the issue raised in the Cross Objection of the assessee challenging the validity of the assessment made by the Assessing Officer under section 147/143(3)/153A of the Act, the ld. Counsel for the assessee contended that the original assessment in the assessee's case for the year under consideration was completed by the Assessing Officer under section 153A/143(3) of the Act. He submitted that the said assessment was reopened by the Assessing Officer on 17.02.2015, i.e. that the expiry of four years from the end of the relevant assessment year and as per the first proviso to section 147, such reopening after the expiry of four years from the end of the relevant assessment year was permissible only when any income chargeable to tax had escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the relevant assessment year. He invited our attention to the reasons recorded by the Assessing Officer as given on page 2 of his paper book and submitted that no such failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the year under consideration was specifically pointed out by the Assessing Officer. By relying on the various judicial pronouncements, he contended that the reopening of the assessment originally completed under section 153A/143(3) of the Act after the expiry of four years by the Assessing Officer thus was bad-in-law and the assessment completed under section 153A/143(3)/147 in pursuance thereof is liable to be cancelled being invalid.
7. The ld. D.R., on the other hand, submitted that the assessee as per the information received by the Assessing Officer had suppressed its actual quantity of production of iron ore and this information by itself was sufficient to show the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the year under consideration. He contended that not only the factum of 9 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram suppressed production of iron ore was pointed out by the Assessing Officer in the reasons recorded but even the quantum of the same was specifically given by him along with the corresponding value, which formed the basis of his reason to believe that income of the assessee to that extent had escaped assessment due to the failure of the assessee to disclose fully and truly the production of iron ore during the year under consideration. He has contended that the statutory requirement in terms of proviso to section 147 thus was duly satisfied by the Assessing Officer and the reopening of assessment by him after the expiry of four years was in accordance with law.
8. We have considered the rival submissions and also perused the relevant material available on record. In order to decide this preliminary issue raised by the assessee in its Cross Objection relating to the validity of the reopening of assessment in the light of the contentions raised by the ld. Representatives of both the sides, it would be relevant to refer to the reasons recorded by the Assessing Officer, which are extracted below:-
"After co mparing th e Info rmation regarding act ual production gathered from the Report of J ustice M. B. Shah Commissio n on illegal mining and St atutory Audited Acco unt of the assessee firm, it was observed that the assessee firm has suppressed its actual quantity of production of Iron Ore to the tu ne of 10,761 MT valued at Rs.2,79 ,29,422/- (@Rs.2595.43 per MT which is arrived at t aking th e amount of tot al sales as per P&L Account divided by total quantity of sales i.e. Rs.2788508797.70/1074392.88). The assessee firm h as shown production of Iron Ore of 11,74 ,680 MT in its st atuto ry audited account for the F,Y, 2007-08 relevant to AY. 2008-09 whereas from the M.B, Shah Commission Report at Page No. 325, Annexure-Z, Vol.-II/A of 1st report on Odisha, it reveals th at actual productio n of Iro n Ore of the assessee company in the same period was 11,85,441 MT. Hence, the production of Iron Ore remains undisclosed in th e books of account of the assessee firm, worked out to 1 0,761 MT valued at Rs. 2,79,29,422/- for the A.Y. 2008-09.
On perusal of detail s on expo rt quant ity value of c argo (Iron Ore) expo rted from Paradeep Port received from Paradip Po rt Trust , Paradip Po rt, it is seen that the actual quantity of export 10 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram of tile iron o re fro m Paradip Po rt, by the captio ned assessee in FY 2007-08 relevant to AY 2008-09 was 1,28,01,37,601 MT whereas in th e assessee's books of account, it is reflected as 93,64,98,243 MT. Hence th e quantity of expo rt of iron ore to the tune of 34,36,39,3 58 MT remained undisclosed in the books of account of the assessee firm for the AY 2 008-09.
Considering the abo ve, I have reason to believe th at income to the tune of Rs.37,15,68,780/- chargeable to tax h as escaped assessment in AY 200 8-09".
9. A perusal of the reasons recorded by the Assessing Officer shows that the information in the form of report of Justice M.B. Shah Commission on illegal mining was received by him giving actual production of iron ore by the assessee-firm. From the said information, it was gathered by the Assessing Officer that the assessee-firm had suppressed its actual production of iron ore for the year under consideration to the tune of 10,761 Metric Ton valued at Rs.2,79,29,422/- . It is thus clear that the factum as well as quantum of suppression of production of iron ore was noticed by the Assessing Officer from the information received by him in the form of report of Justice M.B. Shah Commission on illegal mining and keeping in view that the production of iron ore to that extent had remained undisclosed by the assessee in its books of account, a belief was found by the Assessing Officer that income of the assessee had escaped assessment and the assessment was reopened by him after recording the reasons. The failure on the part of the assessee to disclose fully and truly the actual quantity of production of iron ore, which was a material fact necessary for its assessment for the year under consideration thus was clearly pointed out by the Assessing Officer in the reasons recorded and since the escapement of income chargeable to tax for the year under consideration was by reason of such failure on the part of the assessee, we are of the view that the reopening of assessment by the Assessing Officer after the expiry of four years from the end of the assessment year under consideration was in accordance with the relevant provisions of the Act including the 1 s t Proviso to Section 147. We, 11 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram therefore, find no infirmity in the reopening of assessment as made by the Assessing Officer on the basis of reasons recorded by him and upholding the validity of the same, we dismiss the Cross Objection filed by the assessee.
10. Now we take up the appeal of the Revenue being ITA No.685/KOL/2018, which involves a solitary issue relating to the deletion by the ld. CIT(Appeals) of the addition of Rs.2,93,18,510/- made by the Assessing Officer on account of the alleged suppression of export sales.
11. The ld. D.R. submitted that the export of iron ore by the assessee- company through Paradeep Port Trust during the year under consideration as reported by the Paradeep Port Trust itself in response to the enquiry directly made by the Assessing Officer was 3,90,872 Metric Ton as against the export of 3,82,872 Metric Ton shown by the assessee- company in its books of account. He submitted that this difference could not be explained satisfactorily by the assessee-company inspite of sufficient opportunity given by the Assessing Officer during the course of assessment proceedings. He contended that the onus in this regard was on the assessee to explain the difference of 8,000 Metric Ton in the export of iron ore as pointed out by the Assessing Officer from the relevant information received from Paradeep Port Trust and since the assessee had failed to discharge the said onus, the addition on account of the said difference by treating the same as suppression of export sale by the assessee was rightly made by the Assessing Officer. He contended that the ld. CIT(Appeals), however, put the onus on the Assessing Officer by observing that the Assessing Officer ought to have obtained the details of figures reported by Paradeep Port Trust and furnished the same to the assessee so that the difference of 8,000 Metric Ton in the export of iron ore could have been explained by the assessee. He submitted that the 12 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram assessee-company was regularly exporting the iron ore through Paradeep Port Trust and the difference in export as pointed out by the Assessing Officer should have been reconciled by the assessee by obtaining the relevant details from Paradeep Port Trust. He contended that the difference in export of iron ore reported by Paradeep Port Trust for the subsequent two years as pointed out by the assessee was not relevant to decide this issue and since the onus to explain the difference of 8,000 Metric Ton in export of iron ore for the year under consideration was not satisfactorily discharged by the assessee, the ld. CIT(Appeals) was not justified in deleting the addition made by the Assessing Officer on this issue.
12. The ld. Counsel for the assessee, on the other hand, fully supported the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue. He submitted that the relevant quantitative details of the export of iron ore through Paradeep Port Trust during the year under consideration were fully furnished by the assessee before the ld. CIT(Appeals) and having satisfied with the same, the allegation made by the Assessing Officer on the basis of figures reported by Paradeep Port Trust was held to be unsustainable by the ld. CIT(Appeals). He contended that the fact that export of iron ore of the assessee-company as reported by Paradeep Port Trust was actually less than the export shown in the books of account of the assessee for the immediately succeeding two years was sufficient to show that the figures reported by Paradeep Port Trust to the Assessing Officer were not reliable as rightly observed by the ld. CIT(Appeals). He submitted that the Assessing Officer did not obtain the details of export of iron ore by the assessee-company for the yea r under consideration as reported by Paradeep Port Trust and compare the same with the details of export of iron ore as reflected in the books of account of the assessee. He contended that the Assessing Officer thus failed to support and substantiate the allegation made by him regarding 13 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram suppression of export sale by the assessee and the ld. CIT(Appeals) was fully justified in deleting the addition made by the Assessing Officer on the basis of unsupported and unsubstantiated allegation regarding suppression of export sale by the assessee.
13. We have considered the rival submissions on this issue and also perused the relevant material available on record. It is observed that the relevant details of export of iron ore as made by the assessee during the year under consideration through Paradeep Port Trust were obtained by the Assessing Officer by making a direct enquiry with the Paradeep Port Trust. As reported by Paradeep Port Trust, the assessee-company had made total export of 3,90,872 Metric Ton of iron ore during the year under consideration and since the export of 3,82,872 Metric Ton was shown by the assessee in its books of account, there was a difference in export of iron ore to the extent of 8,000 Metric Ton, which the Assessing Officer required the assessee to explain. In reply, it was explained by the assessee that the export of iron ore as reported by Paradeep Port Trust was less than the export for the immediately succeeding two years as shown by the assessee in its books of account and there was a possibility that Paradeep Port Trust might have included some of the exports of the immediately succeeding year, i.e. A.Y. 2009-10 in the year under consideration i.e. A.Y. 2008-09. In our opinion, this explanation offered by the assessee was not sufficient to reconcile the difference of 8,000 Metric Ton in export of iron ore as pointed out by the Assessing Office r for the year under consideration on the basis of information received directly from Paradeep Port Trust and the onus that lay on the assessee to explain the said difference could not be said to be satisfactorily discharged.
14. As rightly submitted by the ld. D.R., the assessee was regularly exporting iron ore through Paradeep Port Trust and in order to reconcile 14 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram the difference of 8,000 Metric Ton in the export for the year unde r consideration, it should have obtained the relevant details from Paradeep Port Trust to point out specifically the export of 8,000 Metric Ton of iron ore for the immediately succeeding year i.e. A.Y. 2009-10, which according to the assessee was wrongly included by Paradeep Port Trust in the export of the year under consideration as reported to the Assessing Officer. It is pertinent to note here that the unit of assessment is the assessment year and when the difference of 8,000 Metric Ton in the export of iron ore was specifically pointed out by the Assessing Officer for the year under consideration alleging the suppression of export sale by the assessee, the onus was on the assessee to reconcile the same satisfactorily by bringing the relevant facts and figures on record. As rightly contended by the ld. D.R., this vital aspect, however, was not appreciated by the ld. CIT(Appeals) in the right perspective and he deleted the addition made by the Assessing Officer on this issue by placing the onus wrongly on the Assessing Officer by observing that the Assessing Officer should have obtained the details of figures reported by Paradeep Port Trust and furnished the same to the assessee so as to enable the assessee to reconcile the difference. In our opinion, the said details ought to have been obtained by the assessee so as to support and substantiate its explanation that the export of iron ore to the extent of 8,000 Metric Ton actually pertaining to the immediately succeeding year was included by Paradeep Port Trust in the export figure of the year under consideration as reported to the Assessing Officer. Having regard to all these facts and circumstances of the case, we set aside the impugned order passed by the ld. CIT(Appeals) giving relief to the assessee on this issue and restore the matter to the file of the Assessing Officer for giving the assessee one more opportunity to support and substantiate its explanation regarding the difference of 8,000 Metric Ton in the export of iron ore by bringing on record the relevant details of export as reported by Paradeep Port Trust to the Assessing Officer. The 15 ITA No. 685/KOL/2018 & C.O. NO. 58/KOL/2018 (in ITA No. 685/KOL/2018) Assessment Year: 2008-2009 M/s. Narbheram Vishram appeal of the Revenue is accordingly treated as allowed for statistical purposes.
15. In the result, the appeal of the Revenue is treated as allowed for statistical purposes, while the Cross Objection of the assessee is dismissed.
Order pronounced in the open Court on February 21, 2020.
Sd/- Sd/-
(Satbeer Singh Godara) (P.M. Jagtap)
Judicial Member Vice-President)
Kolkata, the 21 s t day of February, 2020
Copies to : (1) Assistant Commissioner of Income Tax,
Central Ci rcle-4 (2), Kolkata,
Aayakar Bhawan Po orva, 5 t h Floor, Roo m No. 506, 110, Shanti Pally, Ko lkata-700107 (2 ) M/s. Narbheram Vis hram, Gua, Singhbhum West, J harkhand-833213 (3) Commissioner of Inco me T ax (Appeals)-21, Kolkata;
(4) Commissio ner of Income Tax, Kolkat a- , Kolkata;
(5) The Depart ment al Represent ative
(6) Guard File
By order
Assistant Registrar,
Income Tax Appellate Tribunal,
Kolkata Benches, Kolkata
Laha/Sr. P.S.
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