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TMI Blog2011 (10) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... horities. 2. The Ld. CIT (Appeals) also erred in law and on the facts of the case in confirming addition of ₹ 25,000/- on a/c of compounding fees for illegal mining imposed by District Magistrate, Nainital which had not been paid and debited in the books of accounts on ale of objections raised for the other additions on ale of illegal transportation and stock, which has since been stayed. 3. The Ld. CIT (Appeals) also erred in law and on the facts of the case in not giving benefit of provisions of section 80IB of the act which are applicable to the unit and the same was not claimed in the original return inadvertently. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 2. The assessee company is engaged in the manufacturing of stone grits and dara (mixture of small stones and stone dust from boulders and stone). These boulders and stones are extracted from Gola River from Haldwani after acquiring rights from Forest Department of Uttaranchal Government. A survey was conducted in the premises of the assessee by the Forest Department/PWD and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. for charging the assessee with having excess stock is premature information. Considering this aspect, we set aside this issue to the file of the A.O. for readjudication. He shall take into consideration the outcome of survey carried out by the authorities of the State Government as corroborative piece of evidence and then determine the issue whether the assessee has excess tock or not at the end of the accounting year. This information received from the state Government would be the information, which comes out after the determination of issue in pursuance of the order of Divisional Commissioner, Nainital. Needless to say that observation made by us will not impair or injure the case of the A.O. or would cause any prejudice to the defense/ explanation of the assessee in the fresh proceedings. The A.O. shall afford due opportunity of hearing to the assessee." 11. Similarly, in the case of M/s. Krishna Store Industries Pvt. Ltd., the addition made by the A.O. on the basis of material found during the course of survey and in the light of District Magistrate, Nainital's order dated 19.03.2005, has been restored back to the file of the AO by the Tribunal vide order dated 23. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of CIT vs Bharat General Reinsurance Co Ltd., 81 ITR 303 (Del.), wherein the Hon'ble High Court has held as under :- "It was true that the assessee itself had included that dividend income in its return for the year in question, but there was no estoppel in the Income-tax Act and the assessee having itself challenged the validity of taxing the dividend during the year of assessment in question, it must be taken that it had resiled from the position which it had wrongly taken while filing the return. Quit apart from it, it was incumbent on the income-tax department to find out whether a particular income was assessable in the particular year or not. Merely because the assessee wrongly included the income in its return for a particular year, it could not confer jurisdiction on the department to tax that income in that year even though legally such income did not pertain to that year. Therefore the income from dividend was not assessable during the assessment year 1958-59, but it was assessable in the assessment year 1953-54. It could not, therefore, be taxed in the assessment year 1958-59." He further relied on the decision of Gujarat High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 276 ITR 165 (Guj.) wherein the Hon'ble High Court has held as under :- "The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected." He also relied on the Hon'ble Allahabad High Court decision in the case of CIT vs. Lucknow Public Educational Society, 318 ITR 223 (All.) wherein the Hon'ble High Court has held that the Assessing Officer had not asked for any information before denying the exemption for which the assessee was legally entitled and the Assessing Officer had rejected the second return which was enclosed with the necessary documents for claiming the exemption. The Hon'ble Court granted the relief to the assessee and Hon'ble Court held that the exemption was statutory exemption available to the assessee and dismiss the revenue's appeal. He further relied on the decision of Anchor Pressing, 161 ITR 159 (SC) for the proposition that it is the obligation impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/ excavated from riverbed or by blasting rocks by itself is not usable for any purpose, therefore, to make it usable, various processes which could not be applied to bring it to that stage would amount to manufacturing. Obviously so far as physical characteristic of boulders and grits may have same physical properties i.e., stone. Thus, keeping in view the decision in the case of Arihant Tiles Marbles (P) Ltd. (supra), Kores India Ltd. (supra) and Mysore Mineral Ltd. (supra). We hold that the assessee is engaged in the activity of manufacture or produce of article or thing and as such, entitle to deduction u/s 80IB. Hence, we uphold the order passed by the CIT(A)." 13. The decision in the case of Lucky Minerals (P) Ltd. vs. CIT116 Taxman 1(SC) relied by the ld. DR is distinguishable from the present case. in the said case. Hon'ble Supreme Court has observed that it has not been found by the Tribunal that the assessee company converted the boulders into powder, chips or any other article commercially known by another name and used as a different article. Thus, the Court held that the activities carried on by the assessee company did not amount to manufacture. Similarly, other deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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