9911796707
TMI Blog2004 (1) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... O noticed that the assessee did not maintain day-to-day mines production account and the stock register for raw material and finished goods was also not maintained, therefore, in the absence of the stock register the genuineness and correctness of the trading results could not be verified. The AO worked out the average price of the marble blocks and while doing so had taken the purchase of blocks as shown by the assessee. He also had taken the mining expenses for excavation of the marble blocks from the mine of the assessee. He also included freight and other expenses and had worked out the average purchase price of Rs. 7,100 per block. Thereafter the AO found that the assessee had shown closing stock of marble block at lesser price than th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained that 18 blocks were sold for consideration of Rs. 87,000, therefore, the AO was not justified in considering the sale value at Rs. 1,27,800 and enhancing the sale by Rs. 40,800. It was further stated that the AO was not justified in working out the cost of blocks on average basis at Rs. 7,100 per block because while doing so the AO had not taken the opening value of 122 blocks and also had not taken into account that the assessee besides purchasing marble blocks from outside parties had also produced marble blocks in its own mines and the cost of mining of block from own mine was comparatively less than the average purchase price of blocks purchased from other parties. It was also stated that the mined blocks from the assessee s ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the AO arbitrarily worked out the average cost price even by taking into account the expenditure which was normally incurred when the blocks were sent for sawing and for sale. In other words the AO had taken the expenditure into consideration which were related to cost of conversion of blocks into slabs. It was further stated that out of the total 856 blocks, assessee had sold only 18 blocks and 680 blocks were converted into slabs and the AO has not questioned the sale consideration of such slabs and also the stock of such slabs. Therefore, the AO had arbitrarily worked out the closing stock of marble blocks numbering 158 whereas the assessee had shown their correct value on the basis of opening stock and cost of production. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide parties from places other than Udaipur for a consideration of Rs. 32,11,746 which gave the average cost of each block at Rs. 6,581 and the assessee incurred a cost of Rs. 4,78,974 for excavating 246 marble blocks which gave the cost of production per block at Rs. 1,946 and thus without taking into consideration the freight and other similar expenses relatable to the cost of marble blocks there was variation in such marble block as purchased by the assessee from outside parties and as in the cost of production of each marble block excavated from its own mine. According to the CIT(A), the AO had not taken into account the opening of marble blocks for working out the average price of marble blocks and there was no basis with him to assume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO while making the addition considered the entire stock available with the assessee as that which was purchased from the outsider and not accepted that the stock was available with the assessee which was excavated from its own mine. While making such assumption the AO has not brought any material on record. During the course of hearing the learned Departmental Representative could not controvert this finding of the CIT(A) that the value taken by the AO at Rs. 7,100 was not correct value. In that view of the matter also the addition made by the AO was not justified. 7. In view of the aforesaid discussion, we are of the opinion that the order passed by the learned CIT(A) is just, passed on the basis of facts and requires no interference o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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