THE DCIT, (OSD), RANGE-1,, AHMEDABAD vs. BESTO TRADELINK PVT. LTD.,, AHMEDABAD

The solitary ground of appeal of the revenue is against the decision of Rs. 63,54 lacs being unaccounted purchases of Bauxite.

The facts in brief are that the assessee has filed return of income on 15th October, 2010 declaring total income of Rs. 50,92,180/-. Subsequently, the case was selected under security by issuing of notice u/s. 143(2) of the act on 24th August, 2011. During the course of assessment, the assessing officer has noticed excess sale of 63,54.69 tons of bauxite minerals from the stock summary furnished by the assessee. The assessee explained that purchase of 34,548.053 MT of bauxite purchased in the month of October, 2009 was recorded in the books of account in the month of Nov, 2009 due to which there was short of stock in the month of October, 2009. However, the same squared up in the month of Nov, 2009 and ultimately stock of 703 ton was remained at the end of the year. The assessee has also explained that there was excess weight of Bauxite due to moisture and water contents. The assessing officer has not accepted the explanation of the assessee and made addition of Rs. 63,54,690/- by treating the aforesaid discrepancy as unaccounted purchases made by the assessee.

Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee. The relevant part of the decision of the ld. CIT(A) is reproduced as under:- “3.3 l have considered the observations of the A.O and the contentions of the appellant. The explanation offered by the appellant is two fold. First one was that the bauxite kept in the open plot absorbed moisture from the atmosphere, thereby increasing its weight by 941 MT. A.O at para-5.4 of the assessment order observed that similar explanation was not accepted in the preceding assessment year 2009-10. Relying on the assessment order for that year, A.O did not accept the explanation in the year under consideration also. This issue was adjudicated in my order No.CIT(A)- VI/ ITO.Wd.l (2)208/11-12 dtd. 24/07/2013 for A.Y. 2009-10 wherein it was held as follows:

We have heard the rival contentions and perused the material on record carefully. During the course of assessment, the assessing officer noticed that the assessee had shown sales of Rs. 43169.883 MT of Bauxite till the month of October, 2009 as against the stock of 3618. 193 MT. With the assistance of the ld. counsel, we have gone through the material on record and it is noticed that 5413.450 MT of Bauxite was received by the assessee on various dates in the month of October and same was available in actual stock for sale, however, the invoice for 5413.450 was received and accounted for in the month of Nov, 2019. We have also noticed that above position of stock has been also demonstrated in the Ann. 1 for detail of monthly opening stock, purchase, sale and closing stock wherein in the month of Nov, 2009 quantity of purchase of Bauxite of 5413.450 was reflected. The purchase of above Bauxite was also shown in the ledger account of the supplier M/s. Manaksia Ltd. on 11/11/2009. The ld. CIT(A) has considered the aforesaid material fact along with supporting evidences i.e. Bill dated 11-11-2009 Gate Pass No. Truck No. Gross and Net Weight before adjudicating the issue. Regarding negative stock at the end of the November at 941.240 and finally of 703.153 at the end of the year the

In the result, the appeal of the revenue is dismissed.

DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद