9911796707
TMI Blog2021 (1) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... nses of 45,14,322/- and village development expenses of 16,40,706/- which were not added again in the order passed u/s. 143(3) r.w.s. 263 of the I.T. Act. The assessee has filed audit report u/s. 44AB of the I.T. Act along with the revised return wherein indirect expenses was claimed as expenses relating to prior period. It is seen that the assessee has not come up with any strong evidence in support of his arguments against the order u/s. 143(3) r.w.s. 263 of the I.T Act. It is also seen that there is no proper explanation as to why these expenses were to be allowed when mercantile system of accounting was being followed - genuineness of the claim along with the returns and statements of income itself was not proved in view of various cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal may be allowed." 3. The facts of the case are that the assessee is a PWD contractor and a mine owner carrying on the business of iron ore by obtaining lease granted by Ministry of Environment and Forest, New Delhi and Mines and Geology Department of Karnataka. The assessee filed his return of income for A.Y. 2007-08 by declaring total income of ₹ 2,87,68,920/-. The return was revised on 17/02/2009 by declaring total income of ₹ 186,65,990/-. The case was selected for scrutiny and vide order dated 24/12/2009 passed u/s. 143(3) of the I.T. Act, the income was assessed at ₹ 2,05,13,490/-. Subsequently, the above order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 24,38,120 4. Against this, the assessee is in appeal before us. The Ld. AR submitted that the sales booked twice in earlier year now reversed. Based on the order of M/s. Hamsa Minerals (India) Pvt. Ltd., Hospet, the Ld. AR submitted that the assessee allocated 98954.360 M. tons of Iron Ore in the yard exclusively for them and raised the invoices in the financial year 2004-05 and accounted for the same. Based on the movement of stock, it was submitted that the assessee obtained the permits only for 93204 MT and the assessee was able to send out the iron ore only 93204 MT by 31.03.2005 and the balance material to the extent of 5750.36 MT could not be dispatched and the stock was lying in the stock yard as at 31.03.2005. The Ld. AR submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year 2005-06 the assessee had received the screening charges bill for the period 19-06-2005 to 01-07-2005 vide Bill No. 01/AMTL/NTN/2006-07 dated 06/07/2005 and on the bill, the service provider had not claimed the service tax. The Ld. AR submitted that in the financial year 2006-07, the service provided had claimed the service tax through a debit note dated 28/12/2006 amounting to ₹ 1,27,295/-. It was submitted that the assessee was not aware about liability during the year 2005-06 and it was crystallized during the year 2006-07 and it was accounted accordingly. 4.3 The Ld. AR submitted that the expenses were wrongly capitalized to building. The Ld. AR submitted that during the earlier year, the assessee had capitalized c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year to be allowed in this assessment year without producing an iota of evidence to show that the impugned expenses is relating to the assessment year under consideration. It is to be noted that the audit report clearly states that the assessee was following mercantile system of accounting and therefore, only expenses relating to the assessment year under consideration are to be claimed and allowed. As per original return of income filed on 29/10/2007 in page 5 col. 40, the total income was shown at ₹ 2,79,95,172/- whereas in the revised return of income filed on 17/02/2009, the assessee has shown the same income in page 5 col. 40. However, in page 8 of the original return of income, the assessee has shown ₹ 2,79,54,745/- as b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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