PRINCIPAL COMMISSIONER OF INCOME TAX 1 vs. DEEPKIRAN FOODS PVT. LTD.
What did the High Court hold?
The High Court held that no question of law arises from the ITAT's order. The Court noted that the CIT(A) had examined the issue at considerable length and that the ITAT had deleted the addition primarily by accepting the assessee's explanation for the stock discrepancy. The Tribunal had specifically relied on the High Court's own judgment in CIT v. Arrow Exim Private Limited, which held that a bank's stock statement cannot be the sole ground for making an addition. The Court found that the issue was essentially factual, based on the material available. Therefore, the Tax Appeal was dismissed.
What were the facts?
The Revenue, represented by the Principal Commissioner of Income Tax 1, is in appeal against an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad, dated September 27, 2017. The appeal concerns the assessment year(s) not explicitly stated in the judgment. The dispute revolves around the deletion of an addition of Rs. 65,72,677 made by the Assessing Officer (AO) on account of a stock difference. The AO's addition was based on a discrepancy between the stock shown in the assessee's books of account and the bank-stock statement maintained by the assessee. Both the Commissioner of Income Tax (Appeals) [CIT(A)] and the ITAT deleted this addition, accepting the assessee's explanation for the discrepancy.
What were the issues?
1. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition made on account of disallowance of Rs. 65,72,677 due to stock difference? Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. However, it is implied that the assessee's explanation for the stock discrepancy was accepted by the lower authorities. Revenue's Contention: The Revenue contends that the Appellate Tribunal erred in deleting the addition. The AO had made the addition based on a difference between the stock in the assessee's books and the bank-stock statement. The Revenue likely argues that this discrepancy warranted the addition, and the Tribunal's deletion was erroneous. The judgment mentions the Tribunal referred to CIT v. Arrow Exim Private Limited, suggesting the Revenue may have argued against the applicability or interpretation of this precedent.
AI-generated summary — verify with the full judgment below
C/TAXAP/401/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL No. 401 of 2018 ============================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 1 Versus DEEPKIRAN FOODS PVT. LTD ============================================================== Appearance : Mr MR BHATT, Sr Advocate with Mrs MAUNA M BHATT, Advocate for the PETITIONER ============================================================== CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI and HONOURABLE Mr. JUSTICE B.N. KARIA 30th April 2018
ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI) Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad dated 27th September 2017 raising following question for our consideration :- “Whether the Appellate Tribunal has erred in law and on facts in deleting the addition
made
account
of disallowance of Rs. 65,72,677/= due to stock difference ?” The sole basis for the Assessing Officer to make addition of RS. 65.72 lakhs [rounded off] was the difference of stock Page 1 of 2
C/TAXAP/401/2018 ORDER shown in the assessee’s books of account, as compared to the Bank-stock statement maintained by the assessee. CIT [A] and the Tribunal deleted such addition primarily accepting assessee’s explanation for such discrepancy. The Tribunal, in particular, referred to the judgment of this Court in case of CIT v. Arrow Exim Private Limited, reported in [2010] 230 CTR 293 [Gujarat] and held that the Bank’s stock statement cannot be the sole ground for making the addition. We noticed that the CIT [A] also had examined this issue at a considerable length. Essentially, the issue is factual one based on material available. No question of law arises. Tax Appeal is dismissed. [Akil Kureshi, J.] [B.N Karia, J.] Prakash Page 2 of 2
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