Commissioner Of Income Tax, Gandhinagar v. M/S. Shaifali Steels Limited

C/TAXAP/1241/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1241 of 2018 ========================================================== COMMISSIONER OF INCOME TAX, GANDHINAGARVersusM/S. SHAIFALI STEELS LIMITED ==========================================================Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIandHONOURABLE MR.JUSTICE B.N. KARIA Date : 09/10/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1.Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 23.03.2018 raising following questions for our consideration: “[A] Whether the Appellate Tribunal has erred in law and on facts of the case in deleting the addition of Rs.5,28,94,800/- on account of Unexplained investment in the closing stock? [B]Whether the Appellate Tribunal has erred in law and on facts of the case in upholding the order of CIT(A) in deleting the addition of Rs.79,00,000/- on account of unexplained addition in share capital? [C]Whether the Appellate Tribunal has erred in law and on facts of the case in upholding the order of CIT(A) in restricting the addition of Rs.6,97,717/- to Rs.97,717/- on account of unexplained unsecured loan u/s.68 of the Act? [D]Whether the Appellate Tribunal has erred in law and on facts of the case in upholding the order of CIT(A) in deleting the addition of Rs.60,62,908/- on account of interest expenses? [E]Whether the Appellate Tribunal has erred in law and on facts of the case in upholding the order of CIT(A) in deleting the addition of Rs.14,96,951/- on account of commission expenses?” 2.Question-A pertains to additions made by the Assessing Officer of Rs.5.28 crores (rounded off) on account of mismatch in closing stock. Commissioner of Income Tax (Appeals) and the Tribunal deleted the same. The Tribunal while confirming the view of the Commissioner of Income Tax (Appeals), noted that the Commissioner of Income Tax (Appeals) had called for three remand reports. The assessee had explained the discrepancy pointing out that the statement given to the bank pertained to the stock which was already shown in the books of accounts. It was also pointed out that a portion pertained to cause of job-work done by third party for which material was sent to them. This was included in the statement supplied to the bank. The entire issue is thus fact based. Commissioner of Income Tax (Appeals) and the Tribunal appreciated the material on record to delete the addition. 3.Question-B pertains to deletion of Rs.79 lakhs which was made by the Assessing Officer towards unexplained investment in share capital. The Tribunal confirmed the view of the Commissioner of Income Tax (Appeals) observing that the assessee had filed the necessary confirmation and details from the investors, remand report was called by the Commissioner of Income Tax (Appeals). The assessee had thus proved the identity, genuineness and creditworthiness of the investors. It can thus be seen that the Commissioner of Income Tax (Appeals) was on facts, convinced that the assessee has not made any unexplained investment in the shares. 4.Question-C pertains to restriction of addition under section 68 of the Income Tax Act, 1961 ('the Act' for short) which also is a similar issue as the previous one. No separate discussion is therefore necessary. 5.Question-D pertains to addition of Rs.60.62 lakhs on account of interest expenditure. The Tribunal while confirming the view of the C/TAXAP/1241/2018 ORDER 4.Question-C pertains to restriction of addition under section 68 of the Income Tax Act, 1961 ('the Act' for short) which also is a similar issue as the previous one. No separate discussion is therefore necessary. 5.Question-D pertains to addition of Rs.60.62 lakhs on account of interest expenditure. The Tribunal while confirming the view of the C/TAXAP/1241/2018 ORDER Commissioner of Income Tax (Appeals), noted that though before the Assessing Officer full details were not provided, in the appeal proceedings the same had come on record. 6.The last question pertains to disallowance of commission expenses of Rs.14.96 lakhs. Here also, the Tribunal noted that at the appellate stage, the assessee has produced full details justifying such expenditure. Remand report was also called for. No question of law arises. 7.Tax Appeal is dismissed. (AKIL KURESHI, J) ANKIT SHAH (B.N. KARIA, J)