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TMI Blog2023 (10) TMI 1428X X X X Extracts X X X X X X X X Extracts X X X X ..... , relied upon the fact that the assessee company had voluntarily offered amounts for disallowances of the overburdened charges claimed as expenditure in the previous years - HELD THAT:- As there is no dispute that the assessee has been in the mining contracts, and in mining contracts, for extracting the required ore or minerals the overburden has to be removed involving expenditure, which goes on decreasing year after the year. Generally, in the initial years it would be high and thereafter such an expenditure may get reduced substantially. Such a fact is evident in the case of the assessee company also. Expenditure on overburden removal has been made on a turnover demonstrating that such an expenditure incurred for overburden removal, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue by: Ms. TH Vijaya Lakshmi, CIT-DR ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order dated 31/08/2018 passed by the learned Commissioner of Income Tax (Appeals)-11, Hyderabad ( Ld. CIT(A) ), in the case of M/s. Veerabhadra Minerals Private Limited ( the assessee ) for the assessment year 2013-14, Revenue preferred this appeal. 2. Brief facts of the case are that, the assessee company is engaged in the business of mining contracts. In pit mining operations, it is necessary to remove overburden and other barren waste materials to access ore and other minerals. Cost incurred to extract the same are called as overburden charges or stripping costs. Subcontract was awarded by assessee company to GVP E C, which is the proprietorsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no such offer by the assessee company for the year under consideration. He further observed that the overburden removal expenditure for the year under consideration is substantially lower compared to earlier years, namely, expenditure on overburden removal is Rs. 14.04 crores, Rs. 18.97 crores and 5.25 crores on a turnover of Rs. 46.82 crores, Rs. 60.52 crores 41.03 crores for the assessment years 2011-12, 2012-13 2013-14 respectively. Lastly, he observed that the turnover on account of overburden removal has been assessed in the hands of Mr. GV Pratap Reddy and further in the hands of his employees, whose returns have been filed, there is no concrete material brought on record by the learned assessing officer to justify the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank records it was found that an amount of Rs. 17.3 lakhs was transferred to the account of one Dumper Operator towards subcontract payments by way of three cheques and the entire amount was withdrawn on the very immediately next day in the form of cash. Mr. Pratap Reddy answered that such Mr. Subba Reddy paid the amount to un-known subcontractors. She, therefore, submitted that all these circumstances, no doubt furnish a basis for the learned Assessing Officer to entertain a doubt in respect of such an expenditure and there is every justification for the learned Assessing Officer to reach a conclusion that this particulars expenditure is a bogus expenditure. She submitted that by making certain general statements and without giving any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other mode; that it is also not the case where the Managing Director has withdrawn the statement at a later point in time. He submitted that there is no material at all, in the possession of the assessing officer, to show that such expenditure was incorrectly claimed. According to him, all the documentary evidences such as statement giving the names and addresses of all the subcontractors along with PAN numbers and details of deduction of TDS are furnished before the learned assessing officer which are not contradicted, and all the subcontractors have filed the returns of income and paid taxes and the copies of the returns and bank accounts of the employee subcontractors have been filed before the learned Assessing Officer. 9. We have gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the year. Generally, in the initial years it would be high and thereafter such an expenditure may get reduced substantially. Such a fact is evident in the case of the assessee company also. Expenditure on overburden removal has been Rs. 14.04 crores, Rs. 18.97 crores and Rs. 5.25 crores on a turnover of Rs. 46.82 crores, Rs. 60.52 crores 41.03 crores for the assessment years 2011-12, 2012-13 2013- 14 respectively, demonstrating that such an expenditure incurred for overburden removal, was high in the earlier years and lowest in the year under consideration. 11. Assessee s declaration of income of Rs. 2.76 crores and Revenue accepting the same during the year clearly shows that there were business operations in mining by the assessee dur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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