COMMISSIONER OF INCOME TAX 1 vs. APEX THERM PACKAGING P. LTD.

TAXAP/1070/2013HC GujaratGJHC24023271201320 December 2013Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.D.KOTHARI6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court agreed with the reasoning of the CIT(A) and the ITAT. The Court noted that the assessee had discharged the initial onus by furnishing full particulars for most lenders, including confirmation letters with name, address, and PAN, balance sheets, profit and loss accounts, and income tax returns. Even for the remaining two lenders, confirmation, address, and PAN were provided. The loans were received through cheques and reflected in the lenders' balance sheets. The ITAT had found that the AO had not brought any material on record to rebut the assessee's evidence and distinguished the revenue's cited case of N.R. Portfolio. The High Court concluded that the AO was not justified in making the addition. Consequently, no substantial question of law arose, and the appeal was dismissed.

What were the facts?

The revenue (Commissioner of Income Tax) is appealing a judgment of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2007-08. The assessee, Apex Therm Packaging Pvt. Ltd., had declared NIL total income. During assessment, the Assessing Officer (AO) made an addition of Rs. 33,35,011/- under Section 68 for unexplained cash credits from 17 lenders and disallowed interest expenses of Rs. 3,10,478/-. The assessee provided confirmation letters, balance sheets, and IT returns for most lenders, except for two where only confirmation, address, and PAN were submitted. The Commissioner of Income Tax (Appeals) deleted both additions, a decision upheld by the ITAT. The revenue is challenging the ITAT's order.

What were the issues?

1. Whether, in facts and law, the Tribunal was justified in confirming the deletion of the addition made on account of unexplained cash credits of Rs. 33,35,011/- under Section 68 of the Income Tax Act? (Question of law) 2. Whether, in facts and law, the Tribunal was justified in confirming the deletion of the addition made on account of interest expenses of Rs. 3,10,478/-? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that the Tribunal erred in confirming the deletion of the addition made under Section 68 and the consequential disallowance of interest. The revenue relied on the decision of the Hon'ble Delhi High Court in N.R. Portfolio (Supra).

Which sections of the Income-tax Act were involved?

Section 68

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O/TAXAP/1070/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1070 of 2013

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.D.KOTHARI

====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== COMMISSIONER OF INCOME TAX 1....Appellant(s) Versus APEX THERM PACKAGING P. LTD.....Opponent(s) ====================================== Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1 ====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.D.KOTHARI

Date : 20/12/2013

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) O/TAXAP/107

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