YASH DISTRIBUTORS,DOMBIVLI vs. INCOME TAX OFFICER, WARD 3(2), KALYAN, KALYAN

PER OM PRAKASH KANT, AM

This appeal filed by the assessee is directed against the order dated 15.09.2025 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [ In short the Ld. CIT(A)] for Assessment Year [In short the AY], 2012–13, raising following grounds:

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i. On the facts and in the circumstances of the case, and also in law, the assessment order dated 27.03.2023 is bad in law in as much as the same was passed by the Income Tax Officer, Ward 3(2), Kalyan (JAO) instead of the Assessment Unit of National Faceless Assessment Centre, Delhi ('FAO) u/s.144B of the Act. Your appellant, therefore, prays that the assessment order being bad in law be quashed. ii. On the facts and in the circumstances of the case, and also in law, the learned Ld. CIT(A) erred in confirming the addition of Rs. 18,00,000/- made by the learned Assessing Officer on account of alleged interest income received from M/s. MAC Remedies Pvt. Ltd. Your appellant, therefore, prays that the addition of Rs.18,00,000/- be deleted. iii. Your appellant craves leave to alter, modify, amend or delete any of the above grounds of appeal, or to add one or more new ground(s), as may be necessary.

2.1 The Ld. CIT(A), in first round of proceedings, vide order dated 15.03.2022, restored the matter to the file of the AO by directing

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him to follow the directions issued by the Coordinate Bench of the Tribunal in the assessee's own case for Assessment Year 2011-12. In the said year, the Tribunal had restored the issue to the file of the AO for fresh adjudication with a direction to examine the assessee's explanation and the supporting material placed on record.

2.2 Pursuant thereto, the AO reconsidered the issue. He observed that the assessee had failed to furnish ledger confirmation from M/s. Mac Remedies Pvt. Ltd. and had itself admitted that the said company had taken a different stand regarding the transaction. The AO further noticed that in Assessment Years 2010-11 and 2011-12 the assessee had offered interest income of ₹27.50 lakh and ₹30 lakh, respectively, on similar deposits. Accordingly, while framing the assessment under section 143(3) read with section 250 of the Act vide order dated 27.03.2023, the AO held that although the assessee had disclosed interest income of only ₹12,00,000/- during the year under consideration on the deposit of ₹2.50 crore, interest of ₹30,00,000/- ought to have accrued following the pattern of earlier years. Consequently, the differential amount of ₹18,00,000/- was brought to tax as undisclosed accrued interest.

2.3 Aggrieved by the said order, the assessee carried the matter in appeal before the Ld. CIT(A). It was contended that the addition of ₹18,00,000/- was wholly unsustainable since M/s. Mac Remedies

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Pvt. Ltd. had erroneously passed accounting entries whereby ₹2 crore out of the total deposit was reflected as share application money. It was further submitted that neither were any shares allotted against the said amount nor was the amount refunded to the assessee till April, 2023. Therefore, no interest had accrued on the said sum except to the extent actually credited by the payer. The Ld. CIT(A), however, was not persuaded by the submissions advanced by the assessee and dismissed the appeal by observing as under:

“7.1 The facts of the case, assessment order and submissions filed by the appellant have been examined. Perusal of the facts and assessment order shows that the appellant failed to submit any ledger confirmation or revised agreement from M/s. Mac Remedies proving restructuring of the interest-bearing nature of the deposit. The appellant's explanation regarding conversion into share application money or a running account remains unsupported by credible and verifiable evidence. The mere fact that TDS was deducted on a lesser amount does not ipso facto mean that no further income accrued. Therefore, the AO's action in computing accrued interest on the total deposit in accordance with the historical treatment is found to be reasonable and justified. The AO has passed a detailed order after examined all the facts and considering the replies filed by the appellant. Accordingly, this ground of appeal is dismissed.”

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Form No. 26AS, clearly establishes that interest of only ₹12,00,000/- was credited to the account of the assessee during the relevant previous year and tax was correspondingly deducted only on such amount. These contemporaneous records emanating from the payer itself constitute cogent evidence regarding the actual interest credited during the year. In this backdrop, we are unable to concur with the finding recorded by the Ld. CIT(A.) that the assessee had failed to substantiate its claim merely because no separate ledger confirmation or revised agreement was furnished. 8. The learned Authorised Representative further submitted that the assessee had advanced an aggregate sum of ₹2.50 crore to M/s. Mac Remedies Pvt. Ltd., which continues to remain outstanding even as on date. It was contended that except for the interest of ₹12,00,000/- credited during the relevant year, no further interest has either been credited or paid by the said company. It was also explained that in Assessment Year 2011-12, M/s. Mac Remedies Pvt. Ltd. had credited interest of ₹30 lakh in its books and deducted tax at source thereon. Since such interest was duly reflected in Form No. 26AS, the assessee had offered the entire amount to tax. However, during the year under consideration, the payer itself credited only ₹12,00,000/- as interest and deducted tax accordingly, while treating ₹2 crore in its books as share application money, though admittedly no application for shares had been

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made, no shares had ever been allotted, and the amount also remained unpaid.

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differential amount of ₹18,00,000/- rests purely on surmises and presumptions and is, therefore, unsustainable in law. We, accordingly, set aside the order of the Ld. CIT(A) on this issue and direct the Assessing Officer to delete the addition of ₹18,00,000/-. The grounds raised by the assessee are, therefore, allowed.

Order pronounced in the open Court on 06/07/2026.

Sd/- Sd/- (ANIKESH BANERJEE) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 06/07/2026 Z.U., P.S. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER,

//True Copy// (Assistant Registrar) ITAT, Mumbai