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

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K (SMC)” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 3198 AND 3199/MUM/2026 Assessment Year: 2013-14 AND 2014-15

Dy. Commissioner of Income Kamla Landmarc Enterprises, Tax, Central Circle, 3(4), 413, Plot No. 25, 2nd Floor, N.S. Road, 4th Floor, Kautilya Bhawan, Vs. No.-6, JVPD Scheme, Vile Parle Bandra Kurla Complex, (W), Mumbai – 400057 Bandra(E), Mumbai - 400051, Maharashtra Maharashtra. PAN NO. AAIFK 9427 D Appellant Respondent

Assessee by : Shri Bharat Kumar Revenue by : Shri Bhagirath Ramawat (SR DR)

: 14/05/2026 Date of Hearing : 22/05/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

These two appeals by the Revenue are directed against two separate orders both dated 30.01.2026, passed by the Learned Commissioner of Income-Tax (Appeals) -51, Mumbai (in short ‘the Ld. CIT(A)’) for Assessment Year [in short ‘the AY’] 2013-14 and 2014-15 respectively.

ITA No. 3198 and 3199 3198 and 3199/MUM/2026 2 Kamla Landmarc Enterprises, Kamla Landmarc Enterprises, Mumbai

Kamla Landmarc Group on 10.12.2013, which also covered the Group on 10.12.2013, which also covered the Group on 10.12.2013, which also covered the present assessee. Consequent thereto, notices under section present assessee. Consequent thereto, notices under section present assessee. Consequent thereto, notices under section 153A of the Act were issued for Assessment Years 2008 153A of the Act were issued for Assessment Years 2008 153A of the Act were issued for Assessment Years 2008–09 to 2014–15. The Kamla Landmarc Group was primarily engaged in 15. The Kamla Landmarc Group was primarily engaged in 15. The Kamla Landmarc Group was primarily engaged in the business of development and the business of development and construction of residential and construction of residential and commercial projects in Mumbai. During the course of the search commercial projects in Mumbai. During the course of the search commercial projects in Mumbai. During the course of the search proceedings, statements of key persons of the Group as well as of proceedings, statements of key persons of the Group as well as of proceedings, statements of key persons of the Group as well as of persons from whom unsecured loans had allegedly been obtained persons from whom unsecured loans had allegedly been obtained persons from whom unsecured loans had allegedly been obtained were recorded. In the statement r were recorded. In the statement recorded under section 132(4) of ecorded under section 132(4) of the Act on 13.12.2013, Shri Jitendra Jain, a key person of the the Act on 13.12.2013, Shri Jitendra Jain, a key person of the the Act on 13.12.2013, Shri Jitendra Jain, a key person of the Group, admitted that certain accommodation entries had been Group, admitted that certain accommodation entries had been Group, admitted that certain accommodation entries had been received in the guise of unsecured loans. Based upon analysis of received in the guise of unsecured loans. Based upon analysis of received in the guise of unsecured loans. Based upon analysis of the financials and transactions of t the financials and transactions of the alleged lenders, the he alleged lenders, the Assessing Officer treated the unsecured loans received in Assessing Officer treated the unsecured loans received in Assessing Officer treated the unsecured loans received in Assessment Year 2008 Assessment Year 2008–09 as unexplained cash credits under 09 as unexplained cash credits under section 68 of the Act. Consequentially, the Assessing Officer section 68 of the Act. Consequentially, the Assessing Officer section 68 of the Act. Consequentially, the Assessing Officer proceeded to disallow interest paid on such loans for proceeded to disallow interest paid on such loans for proceeded to disallow interest paid on such loans for Assessment Years 2008–09 to 2014 09 to 2014–15, including disallowance of interest 15, including disallowance of interest amounting to Rs.10,98,410/ amounting to Rs.10,98,410/- for Assessment Year 2013 for Assessment Year 2013–14 and Rs.15,37,033/- for for Assessment Assessment Year Year 2014 2014–15. 15. It It is is an an undisputed position that no fresh unsecured loans were availed undisputed position that no fresh unsecured loans were availed undisputed position that no fresh unsecured loans were availed during Assessment Years 2013 ssessment Years 2013–14 and 2014– –15 and the impugned disallowances pertained solely to interest on loans impugned disallowances pertained solely to interest on loans impugned disallowances pertained solely to interest on loans obtained in earlier years, which had already been treated as obtained in earlier years, which had already been treated as obtained in earlier years, which had already been treated as unexplained cash credits under section 68 of the Act. unexplained cash credits under section 68 of the Act. unexplained cash credits under section 68 of the Act.

ITA No. 3198 and 3199 3198 and 3199/MUM/2026 3 Kamla Landmarc Enterprises, Kamla Landmarc Enterprises, Mumbai

ITA No. 3198 and 3199 3198 and 3199/MUM/2026 4 Kamla Landmarc Enterprises, Kamla Landmarc Enterprises, Mumbai

for business purposes, the disallowance lacked legal foundation. for business purposes, the disallowance lacked legal foundation. for business purposes, the disallowance lacked legal foundation. Accordingly, the learned CIT(A) deleted the disallowance of Accordingly, the learned CIT(A) deleted the disallowance of Accordingly, the learned CIT(A) deleted the disallowance of interest amounting to Rs.10,98,410/ interest amounting to Rs.10,98,410/-. The relevant finding of the he relevant finding of the Ld. CIT(A) is reproduced as under: . CIT(A) is reproduced as under:

“6.1. The facts of the case and the order of the ITAT in ITA No: 1365 to cts of the case and the order of the ITAT in ITA No: 1365 to cts of the case and the order of the ITAT in ITA No: 1365 to 1369/Mum/2019 dated 24.03.2022 in the case of the assessee have been 1369/Mum/2019 dated 24.03.2022 in the case of the assessee have been 1369/Mum/2019 dated 24.03.2022 in the case of the assessee have been perused. The findings of the AO and the submissions of the appellant have perused. The findings of the AO and the submissions of the appellant have perused. The findings of the AO and the submissions of the appellant have also been considered. From a perusal of the assessme also been considered. From a perusal of the assessment order, it is evident nt order, it is evident that the AO’s conclusions in the instant year are entirely founded on the conclusions in the instant year are entirely founded on the conclusions in the instant year are entirely founded on the premise that the unsecured loans obtained by the assessee were premise that the unsecured loans obtained by the assessee were premise that the unsecured loans obtained by the assessee were accommodation entries and therefore not genuine. It is, however, an accommodation entries and therefore not genuine. It is, however, an accommodation entries and therefore not genuine. It is, however, an undisputed position on reco undisputed position on record that the unsecured loans in question were rd that the unsecured loans in question were originally received in earlier years and that the issue relating to their originally received in earlier years and that the issue relating to their originally received in earlier years and that the issue relating to their genuineness was the subject matter of appellate proceedings culminating in genuineness was the subject matter of appellate proceedings culminating in genuineness was the subject matter of appellate proceedings culminating in the order of the ITAT dated 24.03.2022 in ITA No. 1365 the order of the ITAT dated 24.03.2022 in ITA No. 1365-1369/Mu 1369/Mum/2019. The ITAT, after detailed examination, deleted the addition of unsecured loans ITAT, after detailed examination, deleted the addition of unsecured loans ITAT, after detailed examination, deleted the addition of unsecured loans made under section 68 of the Act for these AYs holding that the same was not made under section 68 of the Act for these AYs holding that the same was not made under section 68 of the Act for these AYs holding that the same was not supported by any incriminating material found during the course of search. supported by any incriminating material found during the course of search. supported by any incriminating material found during the course of search. The said finding h The said finding has attained finality and is binding in subsequent as attained finality and is binding in subsequent proceedings.

6.2 In the instant year, no addition has been made by the AO on account of 6.2 In the instant year, no addition has been made by the AO on account of 6.2 In the instant year, no addition has been made by the AO on account of the principal amount of unsecured loans and the disallowance has been the principal amount of unsecured loans and the disallowance has been the principal amount of unsecured loans and the disallowance has been restricted solely to interest expenditure restricted solely to interest expenditure amounting to Rs.10,98,410/ amounting to Rs.10,98,410/- incurred on the unsecured loan, the addition of which has already been deleted by the on the unsecured loan, the addition of which has already been deleted by the on the unsecured loan, the addition of which has already been deleted by the ITAT. Once the addition of the unsecured loan itself has been deleted and has ITAT. Once the addition of the unsecured loan itself has been deleted and has ITAT. Once the addition of the unsecured loan itself has been deleted and has attained finality, the consequential disallowance of interest in attained finality, the consequential disallowance of interest in attained finality, the consequential disallowance of interest in the subsequent years cannot be made again for reasons that the said loans are bogus. years cannot be made again for reasons that the said loans are bogus. years cannot be made again for reasons that the said loans are bogus. Further there is nothing on record to demonstrate that the interest expenditure Further there is nothing on record to demonstrate that the interest expenditure Further there is nothing on record to demonstrate that the interest expenditure was not incurred wholly and exclusively for the purposes of the assessee's was not incurred wholly and exclusively for the purposes of the assessee's was not incurred wholly and exclusively for the purposes of the assessee's business. Instead, the disallowance has been made by reiterating the earlier ad, the disallowance has been made by reiterating the earlier ad, the disallowance has been made by reiterating the earlier findings relating to the alleged non findings relating to the alleged non-genuineness of the loans themselves. Such genuineness of the loans themselves. Such an approach, in effect, amounts to re an approach, in effect, amounts to re-opening and re-adjudicating an issue adjudicating an issue which has already been conclusively sett which has already been conclusively settled by the ITAT.

6.3 In view of the binding directions of the ITAT binding directions of the ITAT the issue of genuineness of issue of genuineness of the unsecured loans is no longer open for reconsideration in the set the unsecured loans is no longer open for reconsideration in the set the unsecured loans is no longer open for reconsideration in the set-aside proceedings. Once the existence and genuineness of the loan have been proceedings. Once the existence and genuineness of the loan have been proceedings. Once the existence and genuineness of the loan have been judicially accepted, the interest paid thereon partakes the character of a pted, the interest paid thereon partakes the character of a pted, the interest paid thereon partakes the character of a consequential expenditure. The AO cannot indirectly nullify the final appellate consequential expenditure. The AO cannot indirectly nullify the final appellate consequential expenditure. The AO cannot indirectly nullify the final appellate finding by disallowing interest solely on the basis of doubts regarding the loan finding by disallowing interest solely on the basis of doubts regarding the loan finding by disallowing interest solely on the basis of doubts regarding the loan transaction which no longer survive transaction which no longer survive. In the absence of any fresh material or . In the absence of any fresh material or

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specific finding to show that the interest expenditure was not incurred for specific finding to show that the interest expenditure was not incurred for specific finding to show that the interest expenditure was not incurred for business purposes, the disallowance lacks legal sustainability. business purposes, the disallowance lacks legal sustainability. business purposes, the disallowance lacks legal sustainability.

6.4 Accordingly, having regard to the settled factual and legal position, 6.4 Accordingly, having regard to the settled factual and legal position, 6.4 Accordingly, having regard to the settled factual and legal position, and respectfully following the directions of the ITAT, the disallowance of interest respectfully following the directions of the ITAT, the disallowance of interest respectfully following the directions of the ITAT, the disallowance of interest amounting to Rs. 10,98,410/ amounting to Rs. 10,98,410/- made by the AO is hereby deleted. made by the AO is hereby deleted. 5. We have heard the rival submissions and carefully perused the We have heard the rival submissions and carefully perused the We have heard the rival submissions and carefully perused the material available on record. In our consid material available on record. In our considered opinion, once the ered opinion, once the Coordinate Bench of the Tribunal has deleted the addition made Coordinate Bench of the Tribunal has deleted the addition made Coordinate Bench of the Tribunal has deleted the addition made under section 68 of the Act in respect of the very same unsecured under section 68 of the Act in respect of the very same unsecured under section 68 of the Act in respect of the very same unsecured loans in earlier years, the consequential disallowance of interest loans in earlier years, the consequential disallowance of interest loans in earlier years, the consequential disallowance of interest relatable thereto cannot independentl relatable thereto cannot independently survive in subsequent y survive in subsequent assessment years. The substratum of the impugned disallowance assessment years. The substratum of the impugned disallowance assessment years. The substratum of the impugned disallowance rests entirely upon the allegation that the loans were bogus rests entirely upon the allegation that the loans were bogus rests entirely upon the allegation that the loans were bogus accommodation entries. However, the said allegation no longer accommodation entries. However, the said allegation no longer accommodation entries. However, the said allegation no longer survives in view of the categorical findings re survives in view of the categorical findings recorded by the corded by the Tribunal in the earlier proceedings. In such circumstances, the Tribunal in the earlier proceedings. In such circumstances, the Tribunal in the earlier proceedings. In such circumstances, the Assessing Officer could not indirectly nullify or circumvent the Assessing Officer could not indirectly nullify or circumvent the Assessing Officer could not indirectly nullify or circumvent the binding appellate findings by disallowing the interest expenditure binding appellate findings by disallowing the interest expenditure binding appellate findings by disallowing the interest expenditure arising from those very loans. arising from those very loans. We further find that no fresh that no fresh material has been brought on record by the Revenue to establish material has been brought on record by the Revenue to establish material has been brought on record by the Revenue to establish that the interest expenditure was either fictitious in nature or not that the interest expenditure was either fictitious in nature or not that the interest expenditure was either fictitious in nature or not incurred for the purposes of business. The disallowance has incurred for the purposes of business. The disallowance has incurred for the purposes of business. The disallowance has merely been made by reiterating the earlier stan merely been made by reiterating the earlier stand regarding non d regarding non- genuineness of the loans, which issue already stands concluded genuineness of the loans, which issue already stands concluded genuineness of the loans, which issue already stands concluded in favour of the assessee. We, therefore, find no infirmity or in favour of the assessee. We, therefore, find no infirmity or in favour of the assessee. We, therefore, find no infirmity or perversity in the order passed by the learned CIT(A) warranting perversity in the order passed by the learned CIT(A) warranting perversity in the order passed by the learned CIT(A) warranting interference. Since the facts and circumstances ob interference. Since the facts and circumstances ob interference. Since the facts and circumstances obtaining in

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Assessment Years 2013 Assessment Years 2013–14 and 2014–15 are identical, the 15 are identical, the grounds raised by the Revenue for both the years are liable to be grounds raised by the Revenue for both the years are liable to be grounds raised by the Revenue for both the years are liable to be dismissed.

Order pronounced in the open Order pronounced in the open Court on 22 22/05/2026.

Sd/- Sd/- (KAVITHA RAJAGOPAL KAVITHA RAJAGOPAL) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 22/05/2026 Kunal Kumar, P.S.

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai