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Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI
Before: SHRI RAJENDRA & SHRI C.N. PRASAD
Heard Mr.Mukul Rohatgi, learned Attorney General, or the petition.
Delay in filing and refilling special leave petition is condoned. Special leave petition is dismissed. Digitally signed by Rajesh Dham Date: 2014.07.02"
5.2 In view of above discussion, the decision relied upon by Ld. DR would have no application and we have to accept the claim of the assessee to the extent of labour payments are made during the year under consideration and to that extent no disallowance should be made. Further the figure given by the assessee in the aforementioned chart may be verified by the AO and to the extent payments are made during the respective years under consideration no disallowance should be made and only rest of the amount should be disallowed. With these directions we partly allow the appeals filed by the assessee.”
Respectfully following the said decision, we hold that the provisions of section 40(a)(ia) have no application for the payments made by the assessee towards reimbursement of transportation charges, which were paid by the end of the accounting year. Thus, this ground of appeal of the assessee is allowed.
9. The next issue in this appeal of the assessee is that ld. CIT(A) erred in restricting the disallowance to 0.90% in respect of handling loss while loading, unloading and storage of iron-ore material as against assessee’s claim for 0.99%.
Brief facts of the case are that the Assessing Officer while completing the assessment and while making addition towards the closing stock, rejected the contention of the assessee that there is handling loss of iron ore to the extent of 0.99% while loading and unloading, storage, purchase of iron-ore in the course of trading. The Assessing Officer disallowed the entire handling loss claimed by the assessee observing that as per the delivery sheets and challans produced by the assessee, it clearly shows that there is no handling loss since the quantity loaded and unloaded at the port are more or less same. He also observed that the assessee could not furnish any evidence regarding incurring of handling loss while purchase & sale.
On appeal, ld. CIT(A) accepted the contention of the assessee that there would be handling loss, hence, he restricted the same to 0.90% as against 0.99% claimed by the assessee.
The Authorized Representative of the assessee reiterated the submissions made before the authorities below and further submitted that handling loss claimed by the assessee is very much reasonable being first year and last year of trading of iron-ore.
Departmental Representative supported the orders of the authorities below.
We have considered the rival submissions, perused the orders of the authorities below. This aspect of the matter is considered by the ld. CIT(A) with reference to the submissions made by the assessee, the additional evidences filed, remand report of the Assessing Officer and finally restricted the handling loss to 0.90% by observing as under:-
“7.10 As far as the handling loss is concerned, the submission of the appellant clearly shows that when the ;iron ore is loaded from the mines, transported and unloaded at the plots in the ports, there is definitely some loss in each stage. The ore loaded from the mines are stored in the plot to accumulate the desired quantify for export which ranges from 20000 MT to 50000 MT and it needs to be stored for 30 to 45 days. Once the desired quantity is accumulated then the iron ore is loaded into the vessel, at this stage certain quantity is lost. Hence, it is inevitable that some amount of loss of Iron Ore at different stages from landing in the mines till it get exported. In view of this, the finding of the Assessing Officer that handling loss is NIL cannot be accepted. During the course of appellate proceeding, the appellant had filed additional evidences to show that M/s. NMDC which is a public sector undertaking had claimed 0.84% as handling loss. The finding of the Assessing Officer in the remand report clearly shows that handling loss of 0.84% in the case of M/s. NMDC has been verified and found to be correct. The appellant had claimed handling loss 0.99%. However, according to appellant’s own submission, the public sector undertaking M/s. NMDC had claimed the loss at 0.84%. 7.11 This is the first and last year the appellant was involved in the business of export of iron ore. Further, NMDC being a public sector undertaking has huge infrastructure and wherewithal to handle million tons of iron ore and other minerals and hence, the wastage 0.84% admitted by it cannot be applied to the appellant, as this is not a regular business. However, in the interest of justice, I feel it would be fair to allow handling loss at 0.90% as against 0.99% claimed by the appellant. The Assessing Officer is hence directed to restrict the claim of handling loss to 0.90% and work out the actual value of the closing stock applying the average rate of purchase for the full year. Subject to this direction, this ground of appeal is partly allowed.”
15. A careful reading of the order of the ld. CIT(A) and findings thereon, we agree with the ld. CIT(A) that there would definitely be handling loss while the iron ore is uploaded, loaded etc. Therefore, taking the totality of the facts and circumstances into consideration, we feel that the handling loss should be fixed at 0.95% to meet the ends of justice, we do so. Thus, this ground of appeal is partly allowed.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 21st October, 2016