BHARAT COTTAGE INDUSTRIES,MUMBAI vs. CIRCLE 41(4)(1), MUMBAI, MUMBAI

ITA 2904/MUM/2026Status: DisposedITAT Mumbai16 September 2026AY 2020-2110 pages
AI SummaryRemanded

What were the facts?

The assessee received a loan of Rs. 1.85 crore in FY 2008-09, of which Rs. 1.60 crore was written off by the lender in FY 2019-20. The Assessing Officer treated this write-off as income from other sources, which was upheld by the CIT(A).

What did the Tribunal hold?

The Tribunal admitted additional evidence showing subsequent repayment of the loan and remanded the matter to the CIT(A) for fresh adjudication. The Tribunal noted that the lower authorities did not have the opportunity to examine this evidence.

What were the issues?

Whether a loan written off by the creditor is taxable in the hands of the debtor, and if subsequent repayment can be considered. Also, the validity of reassessment proceedings under the Faceless Assessment Scheme was raised.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 250,Section 144,Section 28(iv),Section 41(1),Section 56

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI

Before: SMT BEENA PILLAI & SMT RATNA DASGUPTA

For Appellant: Shri Kumar C. (Sr. AR)
For Respondent: Shri Kumar C. (Sr. AR)
Hearing: 11/08/2026Pronounced: 16/09/2026

PER RATNA DASGPUTA, AM The captioned appeal filed by the assessee arises from order dated 18/02/2026 passed by National Faceless Appeal Centre [hereinafter referred to as Ld. CIT (A)] under section 250 of the Income Tax Act ,1961 [hereinafter referred to as ‘the Act’] for Assessment Year 2020-21. Bharat Cottage Industries 2

2.

The assessee has raised the following grounds of appeal:-

i. Bad Reopening a. The Learned CIT (A) erred in law and on facts in upholding reopening under section 147. b. The reopening is bad in law as there was no tangible material establishing escapement of income. c. The reopening is based on mere assumption that a unilatera

The order continues below.

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