MAHESH NANJI GAMI,NAVI MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, NAVI MUMBAI
| आयकर अपीलीय अिधकरण ायपीठ, मुंबई |
IN THE INCOME TAX APPELLATE TRIBUNAL
“F” BENCH, MUMBAI
BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT
&
SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER
I.T.A. No. 1560/Mum/2025
Assessment Year: 2017-18
Mahesh Nanji Gami
C2101, Plot No. 12
Bhumiraj Hermitage
Palm Beach Road, Sector 18
Sanpada - 400705
[PAN: AFMPP7903G]
Vs
Assistant Commissioner of Income Tax
अपीलाथ/ (Appellant)
यथ/ (Respondent)
Assessee by: Shri Khushiram Jhadwani, A/R
Revenue by:
Ms. Kavita Kaushik, Sr. D/R
सुनवाई की तारीख/Date of Hearing : 15/10/2025
घोषणा की तारीख /Date of Pronouncement : 24/10/2025
आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assesse is preferred against the order dated
16/01/2025 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2017-18. 2. The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the disallowance made by AO in respect of interest expenses of Rs. 48,89,313/- incurred for earning interest income from capital contribution in partnership firm.
3. Briefly stated that the facts of the case are that the assessee filed his return of income on 16/03/2018 declaring total income at Rs.1,08,24,270/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee.
While scrutinizing the return of income, the AO noticed that the assessee has claimed a deduction of Rs. 48,89,313/- u/s 57 of the Act.
I.T.A. No. 1560/Mum/2025
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The AO noticed that there is no nexus with the income from other sources and disallowed the claim of interest. The assessee had strongly contended that the same should have been allowed u/s 36(iii) of the Act as interest has been paid on the borrowings invested in the capital of the firm from which the assessee has earned interest on capital under the head “profit and gains from business or professions”. This contention of the assessee was dismissed by the AO and disallowed by the ld. CIT(A). 5. Having heard the rival contentions, we have carefully perused the orders of the authorities below. It is true that the assessee has paid interest on borrowings contributed in the capital of partnership firm from which the assessee has earned interest which has been returned under the head profit and gains from business or profession, therefore, in our considered opinion the interest paid on borrowings amounting to Rs. 48,89,313/- deserves to be allowed from the business income. Even if inadvertently the assessee has claimed as deduction under the head income from other sources but the claim u/s 36(iii) of the Act was made during the assessment proceedings itself which was rubbished by the AO but should have been allowed. Therefore, considering the facts of the case in totality, we direct the AO to allow the interest of Rs. 48,89,313/- as deduction from profit and gains from business and profession. 6. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 24th October, 2025 at Mumbai. (SAKTIJIT DEY) ACCOUNTANT MEMBER
Mumbai, Dated 24/10/2025
*SC SrPs
*SC SrPs
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I.T.A. No. 1560/Mum/2025
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आदेश की ितिलिप अेिषत/Copy of the Order forwarded to :
अपीलाथ / The Appellant 2. थ / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु")अपील (/ The CIT(A)- 5. िवभागीय ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file.
आदेशानुसार/ BY ORDER