DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4), MUMBAI, MUMBAI vs. KAMLA ANKUR VENTURE, MUMBAI

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ITA 3204/MUM/2026Status: DisposedITAT Mumbai09 September 2026AY 2013-147 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the genuineness of the underlying unsecured loans was already decided in favour of the assessee by a Coordinate Bench, the disallowance of interest on those loans in a subsequent year was unsustainable. The AO could not indirectly reopen the decided issue.

What were the facts?

The Revenue appealed against the deletion of additions made on account of disallowance of interest expenditure on unsecured loans treated as bogus. The unsecured loans were received in earlier assessment years, and their genuineness was previously adjudicated by the ITAT.

What were the issues?

Whether interest expenditure on unsecured loans, previously held to be genuine by the ITAT, can be disallowed in a subsequent year on the premise that the underlying loans were bogus.

Which sections of the Income-tax Act were involved?

Section 68,Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

For Respondent: Shri Bharat Kumar, CA
Pronounced: 09.09.2026

Heard together (2 matters)

ITA 3204/MUM/2026
ITA 3206/MUM/2026

Read from the judgment's own cause title. This page is filed under one of them.

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: E BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 3204/MUM/2026 (िनधा�रण वष�/Assessment Year: 2013-14) Dy. Commissioner Of Income Kamla Ankur Venture Tax, Central Circle-3(4), 1401/02/03, Gulmohar 413, 4th Floor, Kautilya Road, NS1, Kamala Hub, Bhawan, Bandra Kurla Near Costa Coffee, Vile Vs. Complex, Bandra (E), Parle (W), Mumbai-400051, Mumbai-400056, Maharashtra Maharashtra अपीलाथ� Appellant ��थ� Respondent

PAN of Assessee: AAIFK4902H

अपीलाथ� �ारा/Appellant represented by: Smt. Amrita Singh, CIT DR ��थ� �ारा/Respondent represented by: Shri Bharat Kumar, CA ITA 3206/MUM/2026 (िनधा�रण वष�/Assessment Year: 2013-14) Dy. Commissioner Of Income Kamla Shanti Developers Tax, Central Circle-3(4), Private Limited 413, 4th Floor, Kautilya Ground Floor, Shanti Bhawan, Bandra Kurla Vimal, P. M. Road, Vile Vs. Complex, Bandra(E), Parle (E) Mumbai-400051, Mumbai-400057, Maharashtra Maharashtra अपीलाथ� Appellant ��थ� Respondent

PAN of Assessee: AACCK9167D

अपीलाथ� �ारा/Appellant represented by: Smt. Amrita Singh, CIT DR ��थ� �ारा/Respondent represented by: Shri Bharat Kumar, CA

ITA 3204 and 3206/Mum/2026 Kamla Ankur Venture and Kamla Shanti Developers Pvt Ltd. Assessment Year 2013-14

सुनवाई की तारीख / Date of conclusion of hearing: 18.06.2026 घोषणा की तारीख / Date of pronouncement: 09.09.2026 आदेश / ORDER O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: These two appeals filed by Revenue are against the order of the ld. CIT (A)-51, Mumbai vide order No. ITBA/APL/S/250/2025- 26/1084409867(1) dated 05.01.2026 and ITBA/APL/S/250/2025- 26/1084408691(1) dated 05.01.2026, passed against the assessment orders by DCIT-Central Circle 3(4), Mumbai, u/s. 143(3) r.w.s. 153A r.w.s. 254 of the Income-tax Act, 1961 (‘the Act’), dated 20.03.2024 and 13.03.2024, respectively, for Assessment Year 2013-14.

2.

Revenue has raised the following grounds of appeal:

A. ITA 3204/MUM/2026 1. On the facts and circumstances of the case, ld. CIT(A) erred in deleting the addition of Rs.13,50,000/- as the addition made by the AO on account of disallowance of interest expenditure on bogus unsecured loans, holding that the loans were accommodation entries and not incurred for business purposes." 2. "On the facts and circumstances of the case, ld. CIT(A) has not appreciated the facts of case that the addition was made on the basis of statement recorded on oath of Shri Jitendra Jain, Shri Yogendra Raj Singhvi and Shri Abhishek Ladulal Jainand" B. ITA 3206/MUM/2026 1. "On the facts and circumstances of the case, ld. CIT(A) erred in deleting the addition of Rs. 12,94,483/- as the addition made by the AO on account of disallowance of interest expenditure on bogus unsecured loans, holding that the loans were accommodation entries and not incurred for business purposes." 2. "On the facts and circumstances of the case, ld. CIT(A) has not appreciated the facts of case that the addition was made on the basis of statement recorded

ITA 3204 and 3206/Mum/2026 Kamla Ankur Venture and Kamla Shanti Developers Pvt Ltd. Assessment Year 2013-14 on oath of Shri Jitendra Jain, Shri Yogendra Raj Singhvi and Shri Abhishek Ladulal Jainand" 2.1. Both the appeals involve a common issue relating to disallowance of interest expenditure on unsecured loans which had been treated as bogus in an earlier assessment year. The facts and circumstances are substantially identical except for the quantum of interest disallowed. We take up both the appeals together and dispose of the same by this consolidated order. We take the appeal in ITA No. 3204/Mum/2026 as the lead case. Our observations and findings in this appeal shall apply mutatis mutandis to ITA No.3206/Mum/2026.

3.

Brief facts of the case are that assessee is a concern of the Kamla Landmarc Group. A search and seizure action under section 132 of the Act was conducted in the case of the Kamla Landmarc Group and its connected persons on 10.12.2013. Assessee was also covered in the said search and seizure action. Pursuant thereto, proceedings under section 153A were undertaken for the relevant assessment years. In the course of the earlier assessment proceedings, ld. Assessing Officer had treated certain unsecured loans received by assessee as accommodation entries and made additions under section 68 of the Act in the respective years in which such loans were received. The interest subsequently paid on such unsecured loans was also disallowed in the succeeding years on the premise that the underlying loans themselves were bogus and, therefore, the interest thereon was not incurred for the purposes of the business.

3.1. In the case of assessee forming the subject matter of the lead appeal, the unsecured loans in question had been received in Assessment Year 2008-09. Ld. Assessing Officer had made an addition of Rs.6,80,00,000/- under section 68 in that year treating the

ITA 3204 and 3206/Mum/2026 Kamla Ankur Venture and Kamla Shanti Developers Pvt Ltd. Assessment Year 2013-14 unsecured loans as accommodation entries. Consequentially, interest on such loans was disallowed in the subsequent assessment years, including the year presently under consideration. In the instant year, ld. Assessing Officer disallowed interest expenditure of Rs.13,50,000/- under section 37(1), solely on the premise that the underlying unsecured loans were not genuine.

3.2. It is material to note that no fresh unsecured loan was taken by assessee in the year under consideration. The impugned disallowance is only in respect of interest pertaining to loans which had been received in the earlier years.

4.

Ld. CIT(A), after considering the assessment records and the appellate history, deleted the impugned disallowances. In the lead case, ld. CIT(A) recorded that the issue of genuineness of the unsecured loans had already travelled to the Coordinate Bench of ITAT, Mumbai and that the Bench vide order dated 30.08.2022 in ITA No. 1280/Mum/2019, had deleted the addition of Rs.6,80,00,000/- made under section 68 of the Act in Assessment Year 2008-09. Ld. CIT(A) further noted that the disallowance in the year under consideration was restricted to interest and that there was no material on record to demonstrate that the interest expenditure was not incurred wholly and exclusively for the purposes of assessee's business. Ld. CIT(A) accordingly observed that once the very basis on which the interest expenditure had been disallowed, namely, the alleged bogus nature of the unsecured loans, had ceased to survive pursuant to the order of the Bench, ld. Assessing Officer could not indirectly reopen and re-adjudicate the genuineness of those loans while deciding the allowability of consequential interest. The disallowance of Rs.13,50,000/- was accordingly deleted. Aggrieved,

ITA 3204 and 3206/Mum/2026 Kamla Ankur Venture and Kamla Shanti Developers Pvt Ltd. Assessment Year 2013-14 Revenue is in appeal before the Tribunal against the aforesaid relief granted by ld. CIT(A).

5.

We have heard the rival submissions and perused the material available on record. The issue for our consideration is narrow. Revenue seeks to sustain the disallowance of interest merely on the premise that the unsecured loans on which such interest was paid had earlier been treated by ld. Assessing Officer as bogus. We find that this very foundation does not survive any longer. The unsecured loans in question were not received during the year under consideration. They were received in the earlier assessment years and their genuineness was specifically examined in appellate proceedings. In the lead case, the addition of Rs.6,80,00,000/- made under section 68 in Assessment Year 2008-09 was deleted by the Co-ordinate Bench (supra). The consequential interest is now sought to be disallowed in the subsequent year only because ld. Assessing Officer continues to proceed on the premise that the underlying loans were bogus.

5.1. In our considered view, once the very basis of the impugned disallowance has been judicially held to be unsustainable, the same basis cannot be resurrected for making a consequential disallowance in a subsequent year. More particularly, there is no fresh loan in the year under consideration and there is no fresh material brought on record by the Revenue to demonstrate that the interest expenditure was not incurred for the purposes of the business of assessee. The approach adopted by ld. Assessing Officer amounts to re-agitating the genuineness of the unsecured loans in a subsequent assessment year, notwithstanding the fact that the issue relating to the principal loan transactions had already been adjudicated by the Bench. Ld. CIT(A), therefore, was justified in observing that the issue of genuineness of the

ITA 3204 and 3206/Mum/2026 Kamla Ankur Venture and Kamla Shanti Developers Pvt Ltd. Assessment Year 2013-14 unsecured loans was no longer open for reconsideration in the set-aside proceedings and that ld. Assessing Officer could not indirectly nullify the appellate finding by disallowing the consequential interest.

5.2. We also find that the facts of the present cases are squarely supported by the decision of the Coordinate Bench in the case of DCIT vs. Kamla Landmark Enterprises in ITA Nos. 3189 and 3199/Mum/2026, for Assessment Years 2013-14 and 2014-15, pronounced on 22.05.2026. The said decision was rendered in the case of an associate concern of the same group on a materially identical factual pattern. There also, the Revenue sought to sustain the disallowance of interest on the premise that the underlying unsecured loans were not genuine. The Coordinate Bench considered the earlier order of the Tribunal in the case of M/s Kamla Landmarc Enterprises vs. DCIT & Ors. in ITA Nos. 1365 to 1371/Mum/2019, pronounced on 24.03.2022, whereby the additions made under section 68 in respect of unsecured loans were deleted.

6.

We find that the factual position before us is substantially the same. Revenue has sought to distinguish the aforesaid Co-ordinate Bench decision only on the ground that the Department has not accepted the decision and that the matter is stated to be pending before the Hon'ble jurisdictional High Court. In our considered view, mere pendency of an appeal before the Hon'ble High Court does not dilute the binding nature of the order of the Coordinate Bench so long as its operation has not been stayed. It is a settled principle of judicial discipline that an order of the Bench continues to hold the field unless it is reversed or its operation is stayed by a superior forum. In the absence of any stay granted by the Hon'ble High Court since nothing brought on record by the Revenue in this regard, the order of the

ITA 3204 and 3206/Mum/2026 Kamla Ankur Venture and Kamla Shanti Developers Pvt Ltd. Assessment Year 2013-14 Coordinate Bench remains operative and applies to a similar factual situation.

7.

Accordingly, respectfully following the decision of the Coordinate Bench (supra) and considering the factual position obtaining in the present cases elaborately dealt by the ld. CIT(A), we uphold the order of ld. CIT(A), deleting the impugned disallowance of interest. Grounds raised by the Revenue are dismissed. This finding of ours applies mutatis mutandis in respect of disallowance made in appeal vide ITA 3206/Mum/2026, facts being similar.

7.

In the result, both the appeals of the Revenue are dismissed.

Order pronounced in the open court on 09 September, 2026.

Sd/- Sd/- Amit Shukla Girish Agrawal Judicial Member Accountant Member Dated: 09 September, 2026 MP, Sr. PS Copy to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

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