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TMI Blog2008 (1) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... a planned business and is not a business of unknown potential. Therefore, it would be difficult to hold that the turnover of sale under a mining lease would be less than the amount of expenditure involved in obtaining the lease for removal and sale of sand. This would be normal expectation of a businessman carrying on sand mining but it cannot be conclusively said that there cannot be any loss in mining activity. There may be loss because of litigation, there may be loss because of change of the route of the river, there may be loss on account of certain unforeseen circumstances. In the present case the explanation given by the dealer was a routine kind of explanation that the quality of sand was of low grade, there was water logging and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by the dealer forms part of the taxable turnover of the dealer? All the three dealers carry on business of mining of sand. For carrying on mining activity a person is required to obtain a lease for which he has to pay royalty to the State. In the case of Mathura Prasad (TTR No. 2584 of 2005) the royalty paid was Rs. 10,26,000 whereas the taxable turnover was declared by the dealer as Rs. 7,14,000. In the case of Prem Chandra (TTR No. 2585 of 2005) royalty paid was Rs. 4,92,040 and the taxable turnover was declared as Rs. 3,10,027. In the third case of Harish Chandra royalty deposited was Rs. 4,04,378 and the taxable turnover was declared as Rs. 59,974. All the three dealers have shown their selling rates of sand as Rs. 10 per cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alers filed appeals which were dismissed by the Joint Commissioner (Appeals) by order dated August 31, 2002. Thereafter the dealers preferred second appeals, which were clubbed together and the Tribunal vide judgment and order dated August 1, 2005 allowed all the three appeals and accepted the turnover disclosed by the dealers and accordingly set aside the tax liability. It is against this judgment that the present revisions have been filed. Sri B.K. Pandey, learned Standing Counsel, has submitted that the royalty paid by the dealers for obtaining the lease for sand mining was apparently a part of the taxable turnover and any other expenses made by the dealers prior to the sale of sand, in order to acquire right for such sale would also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the finding of the Tribunal accepting the account books could not be sustained as the Tribunal did not have any other material before it which could convince that the account books were properly maintained in accordance with law. Merely because the assessing officer has accepted the quantity of the sand removed as declared by the dealer it could not lead to acceptance of complete account books including the rate of sale disclosed by the dealer. Having considered the submissions made by Sri B.K. Pandey and after perusal of the record and the authorities relied upon by him, I am of the view that the questions of law as raised by the Department require consideration. No prudent man carries on business to suffer losses. Business is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e turnover of sale under a mining lease would be less than the amount of expenditure involved in obtaining the lease for removal and sale of sand. This would be normal expectation of a businessman carrying on sand mining but it cannot be conclusively said that there cannot be any loss in mining activity. There may be loss because of litigation, there may be loss because of change of the route of the river, there may be loss on account of certain unforeseen circumstances. In the present case the explanation given by the dealer was a routine kind of explanation that the quality of sand was of low grade, there was water logging and the mining area was not even. None of the reasons given appears to be sound and acceptable. All these aspec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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