ACIT, CIR 8(2)(1),MUMBAI, MUMBAI vs. WESTERN INDIA GARMENTS PVT. LTD., MUMBAI

ITA 4211/MUM/2023Status: DisposedITAT Mumbai22 September 2025AY 2014-1513 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the bad debt claim was allowable as business loss, following precedents regarding NSEL issues. Regarding Section 14A, the Tribunal found the AO's working contrary to judicial pronouncements and deleted the disallowance.

What were the facts?

The assessee claimed bad debts of Rs. 7,66,24,693/- arising from commodity trading on NSEL which was suspended. The AO disallowed this claim and added Rs. 7,57,00,515/- as undisclosed stock. The assessee also made a suo moto disallowance of Rs. 11,02,185/- under Section 14A, which the AO increased to Rs. 13,52,543/-.

What were the issues?

Whether the loss on account of suspended NSEL trading is allowable as bad debt or business loss, and whether the disallowance under Section 14A was correctly computed.

Which sections of the Income-tax Act were involved?

Section 28,Section 14A,Section 36(1)(vii),Section 43(5),Section 234B,Section 271(1)(c)

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Income Tax Appellate Tribunal, “G” BENCH MUMBAI

Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL

Hearing: 03.07.2025Pronounced: 22.09.2025

Pico Capital Pvt Ltd. and Western India Garments Pvt Ltd. AY 2014-15 PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

These two appeals filed by assessee and revenue are against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2023-24/1056675304(1), dated 29.09.2023 passed against the assessment orde

The order continues below.

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