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TMI Blog2021 (3) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as 'the Act' for short) against the order dated 21.04.2017 passed by the Karnataka Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). The tax period in this revision pertains to the Financial years 2006-07 to 2010-11. The revision petition was admitted by a Bench of this Court vide order dated 17.09.2019 on the following substantial questions of law: (i) Whether the Tribunal was right in passing the impugned order and setting aside the orders of the first appellate authority and the assessing authority? (ii) Whether the Tribunal was right in holding that the transit/handling losses of iron ore claimed by the Respondent, amounting to 5% of its total export clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verification of physical stock at the railways yards and the ports and arrived at a shortage of 61,513.30/- metric tonnes at the railway yards and 159,171.68 metric tonnes to the ports aggregating to total shortage of 2,20,685 metric tonnes. The respondent in its books of accounts therefore, reduced the aforesaid shortage from its closing stock. The prescribed authority issued a proposition notice dated 22.12.2015 proposing to treat the aforesaid transit / handing loss as suppressed taxable turnover on the basis of Central Bureau of Investigation (hereinafter referred to as 'the CBI' for short) report and the order passed by Central Excise and Customs (hereinafter referred to as 'the Excise Authority' for short) treating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The respondent thereupon filed an appeal under Section 62 of the Act before the First Appellate Authority. The first Appellate Authority however, by an order dated 22.10.2016 inter alia held that transit / handling loss is inevitable and loss claimed by the respondent was quite reasonable and the prescribed authority ought not to have relied on the CBI report and the order passed by the Excise Authority. However, despite aforesaid finding the First Appellate Authority upheld the addition of turnover for the tax period 2010 11 after making a provision for transit / handling loss at 0.92% instead of 1%, which was allowed by the prescribed authority and deleted the addition of turnover in respect of four entire years. Thus, the appeal was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced any evidence in order to support such an exorbitant claim towards transit / handling loss. 7. On the other hand, learned counsel for the respondent submitted that the prescribed authority in its order dated 31.03.2016 has accepted the books of accounts produced by the respondent in its entirety. However, merely on the basis of a CBI report and the order passed by the excise authority, it has made addition of transit / handling loss as suppressed turnover in the absence of any material that respondent has effected sales in respect of suppressed turnover and has suppressed the same. It is further pointed out that prescribed authority as well as the first Appellate Authority admitted that transit / handling loss was inevitable in the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the books of accounts in entirety, which was produced by the respondent. The prescribed authority before passing the order dated 31.03.2016 has not conducted any independent enquiry and has not noted any other material which had been brought on record. It has merely relied upon the order passed by the Excise Authority as well as CBI report, which has already been quashed in the proceeding initiated by respondent. From perusal of the order passed by the prescribed authority and the First Appellate Authority, it is clear that both the authorities have recorded a finding that transit / handling loss is inevitable while transportation of iron ore fines and lumps. It is well settled legal proposition that an order passed by an authority under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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