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TMI Blog2012 (12) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... rmalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} <![endif]--> SHRI N BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI GEORGE GEORGE K, J.M For the Appellant : Shri H N Khincha, C.A. For the Respondent :Shri S K Ambastha, CIT (DR-I), ITAT ORDER PER GEORGE GEORGE K : ITA No.955/2011 preferred by the assessee and ITA No.971/2011 at the instance of the department are directed against the order of the learned CIT (A)-III, Bangalore dated 30.08.2011. The relevant assessment year is 2007-08. 2. These appeals are pertaining to the same assessee and arising out of the CIT(A) s order dated 30/08/2011 and hence, they were hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2006. In other words, the shortage of minerals found on physical verification did not form part of closing stock as on 31.3.2006. (2) In the order passed under section 143(3) for the assessment year 2006-07, the learned Assessing Officer made addition of ₹ 1,17,71,039/- to the value of closing stock as on 31.3.2006. The addition was in respect of value of minerals found short on physical verification. Appeal was filed against the order of the learned Assessing Officer before the learned CIT(A). The learned CIT(A)-III vide order dated 17.2.2010 confirmed the addition made by the learned Assessing Officer. The appellate order has already been filed before your honour. When addition on account of shortage of minerals amounting to ₹ 1,17,71,039/- forms part of closing stock as on 31.3.2006 the said amount would also form part of opening stock as on 1.4.2006. Thus, for assessment year 2007-08, the sum of ₹ 1,17,71,039/- should be considered as forming part of opening stock as on 1.4.2006. When the sum of ₹ 1,17,71,039/- is considered as forming part of opening stock as on 1.4.2006, the income assessed by the learned Assessing Officer for the year under co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return. 2.1 On further appeal, the CIT(A) dismissed the plea of the assessee by observing thus:- 25.0 With regard to grounds relating to deduction claimed in the revised return be allowed, the same is not tenable as the revised return is invalid as it was filed after one year from the end of the relevant assessment year as has been held by the Assessing Officer in para-4 of the impugned order. The same is in accordance with law and hence, the ground raised by the appellant is dismissed . 2.2 Aggrieved, the assessee is in appeal before us. 2.3 It was contended that a fresh claim of deduction can be made before the first appellate authority and the appellate authority is duty bound to entertain the same, though the claim of deduction was not made in the return of income. For the above proposition, the learned AR relied on the recent judgment of the Hon ble Bombay High Court in the case of CIT v Pruthvi Brokers and Shareholders P. Ltd. reported in (2012) 349 ITR 336 (Bom.). 2.3 The learned DR present was duly heard. 2.4 We have heard the rival submissions and perused the materials on record. The assessee is entitled to raise a new issue that is not claimed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I agree with the Assessing Officer that the price charged for C-ore is much below the market rate. The appellant has sold C-ore to the parties much below the market price. I have also gone through submissions made by the appellant. From the submissions made by the appellant, it is inferred that sale of ores to the Kalyani Steels and Associates at ₹ 314/- PMT and is supported by invoices raised, entries in the books and further realization of bill books of accounts are audited by Chartered Accountants. Appellant is a Government of Karnataka undertaking. The system of accounting followed by the appellant company is mercantile system and is as per provisions of sec.145. What appellant has realized is as per bills raised. Neither during assessment nor as per records produced during the assessment, there were any indication regarding realizations beyond what is recorded in the books of accounts. Profit from business and profession are to be computed under section 28 of the Act, as per the accounting policies followed by the company is consistent with Sec.145 of the Act. The scope of total income is also defined under section 5 of the Act. Only the real income is taxable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the sales of C-ore to Kalyani Steels Ltd are supported by invoices raised, entries in the books of accounts audited by Chartered Accountants. The system of accounting followed by the assessee is the Mercantile System as per the provision of section 145 of the Act and we find that no fault has been found therein nor has it been rejected. Nowhere in the order of assessment or the material on record do we find anything to establish that there were any realization on account of sales beyond what is recorded in the books of accounts. As per the I.T. Act, 1961 profits from business are to be computed under section 28 of the Act as per the accounting policies mandated by section 145 of the Act which in the assessee's case is the Mercantile System. The scope of total income is also defined under section 5 of the Act. The I.T. Act, 1961 is very clear that what is to be taxed is the real income of an assessee and not notional or hypothetical income and it does not permit an Assessing Officer to compute income without any evidence. There is no finding by the Assessing Officer that the assessee has sold its C-ore at a price less than that agreed to in the contract entered into with M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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