SETH MUSSADI LAL CHARITABLE TRUST,GHAZIABAD vs. ITO WARD EXEMPTION, GHAZIABAD

ITA 3965/DEL/2026Status: DisposedITAT Delhi29 July 2026AY 2016-173 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal allowed the appeal regarding the disallowance of salary and miscellaneous expenses, stating it could not have been made. However, it rejected the grounds related to payment disallowance and unsecured loans due to the assessee's failure to provide supporting documents.

What were the facts?

The assessee claimed salary and miscellaneous expenses. The lower authorities disallowed a portion of these expenses without providing cogent reasons or rejecting books of accounts. The assessee also failed to submit a rent agreement for a payment disallowance and prove the genuineness of unsecured loans.

What were the issues?

Whether the disallowance of salary and miscellaneous expenses was justified without proper reasons. Whether the disallowance of payment and addition of unsecured loans were valid when the assessee failed to provide supporting evidence.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI SATBEER SINGH GODARA

Pronounced: 07.07.2026

आदेश / ORDER This assessee’s appeal for assessment year 2016-17, arises

against the Addl./JCIT(A)-4, Mumbai DIN and order no.

ITBA/APL/S/250/2025-26/1084816069(1), dated 15.01.2026

involving proceedings under section 143(3) of the Income-tax Act,

1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

It is evident that the outset during the course of hearing that

the assessee’s first foremost substantive ground raised in the

ITA 3965/DEL/2026 SETH MUSSADI LAL CHARITABLE TRUST

instant appeal seeks to reverse both the learned lower authority’s

assessment and lower appellate finding inter alia disallowing

salary and miscellaneous expenses of Rs.20 lakhs and Rs.4

lakhs; respectively.

There does not appear much a dispute between the assessee

and the department that he had claimed total salary

reimbursement of staff members amounting to Rs.2,01,59,217/-

as well as later head of miscellaneous expenses involving very

sums which have been roughly disallowed @ 10% without either

giving any cogent reasons or rejecting the relevant books of

accounts and the detailed supporting documents filed.

Faced with this situation, I find merit in the assessee’s

argument that both the impugned disallowance additions could

not have been made in its hands. Deleted in very terms.

Next comes the latter twin issues between the assessee and

the department i.e. payment disallowance and unsecured loans

addition of Rs.2.88 lakhs and Rs.15 lakhs; respectively. Both the

learned lower authorities record a categoric finding of fact that it

could not submit even a copy of relevant rent agreement. The

factual position is hardly any difference qua the unsecured loan

of Rs.15 lakhs wherein it failed to prove the clinching issue of

ITA 3965/DEL/2026 SETH MUSSADI LAL CHARITABLE TRUST

genuineness both in assessment as well as lower appellate

discussion. I thus, rejected the impugned latter substantive twin

grounds in very terms.

No other grounds or arguments has been pressed.

The assessee’s appeal is partly allowed.

Order pronounced in the open courton7th July, 2026.

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 29th July, 2026. f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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