MUMTAZ MOHSIN KHAN,ANDHERI WEST, MUMBAI vs. JURISDICTIONAL ASSESSING OFFICER, WARD 24(2)(1), PIRAMAL CHAMBERS,MUMBAI, PIRAMAL CHAMBERS,MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.291/Mum/2026 (Assessment year: 2014-15)

Mumtaz Mohsin Khan vs ITO JAO Ward 24(2)(1), Mumbai A-1101, Oberai Sky Heights Area Code-Mum, AO Type-W, AO CHS, Link Road, Lokhandwala Number 91, Range Code-201, Complex, Andheri West, Piramal Chamber, Mumbai-400012 Mumbai-400058 PAN:AGZPK2608M APPELLANT RESPONDENT Assessee by : Shri Sanjay Shah (CA) Revenue by : Shri Surendra Mohan (Sr.DR) Date of hearing : 22/04/2026 Date of pronouncement : 05/05/2026 O R D E R Per:Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2014-15, date of order 07.11.2025. The impugned order emanated from the order of the National Faceless Assessment Centre, Delhi (for brevity the ‘Ld. AO’) order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act, date of order 17.03.2022.

2 ITA No.291/Mum/2026 Mumtaz Mohsin Khan 2. The assessee has taken the following grounds:- “Grounds:- “1. Ld. Commissioner of Income-tax (Appeals) [CITAY] erred in confirming the high-pitched additions made by Ld. Assessing Officer ("AO") to the tune of Rs. 9,17,44,106/- to Total Income of the Appellant, in the Assessment Order passed u/s 147 r.w.s 144 c.ws 144B of the Act. Appellant submits that in view of the facts and circumstances of the case as well as in law the said additions of Rs.9,17,44,106- to the Total Income of the Appellant are bod in law and deserves to be deleted. 2. 14. CTT(A) red in confirming the addition made by the Ld. AG u/s 69A of the Act to the tune of Rs 1,77.18.473/, account of alleged unexplained Fixed Deposits with the Bank. Appellant submits that in view of the facts and bad in law and deserves to be deleted. law the said addition of Rs 1,7,18473-tothe Total Income of the Appellant is bad in law and deserves to be deleted. 3. Ld. CITI Appeals) erred in confirming disallowance made by Ld. AO of Rs 26.25.360/-, on account of Interest expense claimed as deduction u/s 57 of the Act against Interest Income earned of Rs 48.33.011. Appellant submits that in view of the facts and circumstances of the case as well as in law the said interest expense of Rs 26.25.360- ought to he allowed in full u/s 57(iii) of the Act. 4. Ld. CIT(Appeals) erred in confirming disallowance made by Ld. AO of Rs 9,61,560, ne account of depreciation claimed as deduction u/s 57 of the Act against Interest Income earned of Rs 48,33,011/-, Appellant, submits that in view of the facts and circumstances of the case as well as in law the said depreciation claim of Rs 9,61.560- ought to be allowed in full u/s 57(iii) of the Act. 5. Ld. CIT(Appeals) erred in confirming additions made by the Ld. AO to the Total Income of the appellant of Rs 7,04,38,713, on account of unexplained unsecured loans taken on the plea that appellant failed to satisfactorily establish the identity, creditworthiness, or genuineness of the creditors. Appellant submits that in view of the facts and circumstances of the case as well as in law, the said addition to the tune of Rs. 7,04.38.713/- to the Total Income of the Appellant is bad in law and deserves to be deleted. 6. Ld. CIT(A) erred in confirming Order passed by Ld. AO u/s 147 r.ws 144 r.ws 1448 of the Act and making additions to the Total Income of the Appellant, without issuing a valid notice u's 143(2) of the Act. Appellant submits that in view of the facts and circumstances of the case as

3 ITA No.291/Mum/2026 Mumtaz Mohsin Khan well as in law, the said Order passed u's 147 r.ws 144 rows 1448 of the Act is bad in law and deserves to be quashed. 7. La. CIT(A) erred in confirming Order passed by Ld. AO u/s 147 r.w.s 144 r.ws 144B of the Act without providing appellant with the reasons recorded for reopening of her assessment. Appellant submits that in view of the facts and circumstances of the case as well as in law, the said Order passed u's 147 r.ws 144 r.ws 144B of the Act is had in law and deserves to be quashed. 8. Ld. CIT(A) erred in confirming Order passed by Ld. AD u's Section 147 r.w.s. 144 r.ws 1448 of the Act, as less than 7 days time was provided to the appellant to reply to Show Cause notice issued dated 23-02-2022. Appellant submits that in view of the facts and circumstances of the case as well as in law, the said Show Cause Notice dated 23-02-2022 and the said Order passed us 147 r.ws 144 r.w.s 1448 of the Act is bad in law and deserves to be quashed. 9. Ld. CIT(A) erred in confirming Order passed by Ld. AO u/s 147 r.ws 144 r.ws 1448 of the Act. Appellant submits that in view of the facts and circumstances of the case as well as in law, Order passed u/s 147 r.w.s 144 r.ws 144B of the Act. is bad in law and deserves so be quashed.”

4 ITA No.291/Mum/2026 Mumtaz Mohsin Khan 3. The Ld. AR argued filed a paper book containing pages 1 to 700 which has been placed on record. The Ld. AR proceeded ground wise argument which is as follows: (i) Ground No.2, addition of terms deposit amount to Rs.17,71,84,700/- The Ld. AR contended that though the assessment was exparte and the assessee was unable to submit the evidence before the Ld. AO but in the remand proceeding the assessee has submitted and Ld. AO has observed that all the terms deposits are related to the earlier year not from the current year. The Ld. AR invited our attention in the remand report dated 10.12.2024 of the Ld. AO and the relevant part of the said remand report [annexed in APB pages 51 & 55] is reproduced as below: “With respect to the issue of Time Deposit to the tune of Rs.1,77,18,473/-, the assessee has submitted that the said Time Deposit has been made in earlier years and the same has been appearing in the Balance Sheet under the head "FDRs with various Banks". The same has been carried forward and renewed in the current AY, hence, no new FDRs have been made during the year under consideration. To substantiate her claim, the assessee has submitted copies of Bank Account Statement in respect of Account held with Bank of Baroda, HDFC Bank along with Deposit Confirmation/Renewable Advice issued by the HDFC Bank. The assessee has also submitted the details in respect of Time Deposit in a tabulated form, the same is being reproduced hereunder for ready reference:

5 ITA No.291/Mum/2026 Mumtaz Mohsin Khan

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx On verification of the above Bank Account Statements of Accounts held with Bank of Baroda and HDFC Bank respectively, the transactions in respect of Time Deposits, as claimed by the assessee pertain to earlier years which can be seen in the said Bank Statements. Hence, the transactions with respect to Time Deposits amounting to Rs. 1,77,18,473/- pertains to earlier years.”

6 ITA No.291/Mum/2026 Mumtaz Mohsin Khan the assessee was found to be the owner of the 'asset'/cash in the assessment year 2016-17 and hence, the explanation of nature and source of such money and invocation of deeming fiction engrafted under Section 69A could have been sought/examined by the Assessing Officer in the assessment year 2016-17 and could not have been done in the assessment year 2017-18 going by the express language contained in Section 69A and not otherwise. Furthermore, the factum of liquidation/refund of short term loans and advances and its consequential accumulation as cash-in-hand as on 31-3-2016 could have been examined in the assessment year 2016-17 only particularly when the Assessing Officer has not discharged theburden cast upon him to implicate the assessee into the sweep of Section 69A. As such, the Assessing Officer has made addition on pure guess. It is well settled principle of law that while making an assessment under the provisions of the IT Act, the Income Tax Officer is not entitled to make a pure guess and to resort to an assessment without reference to any evidence or any material at all and that suspicion howsoever strong cannot take the place of proof beyond reasonable doubt. (See Dhakeswari Cotton Mills Limited v. Commissioner of Income Tax, West Bengal.)”

7 ITA No.291/Mum/2026 Mumtaz Mohsin Khan The Ld. DR stands in favor of the order of revenue authorities. The Ld. DR invited our attention in impugned appellate order para 5, which is reproduced as below: “5. Appellant findings: 5.1 Ground no. 1: The learned Assessing Officer erred in law and in fact by making following additions: a) Unexplained Time Deposits Rs 1,77,18,473/ b) Unexplained Expenses Rs 35,86,920/ c) Unexplained Unsecured Loans Rs 7,04,38,713.

5.1.1. I have carefully considered the assessment order, the appellant's written submissions, the additional evidence admitted under Rule 46A, and the remand report submitted by the Assessing Officer (AO). It is observed that the appellant contended that the Fixed Deposit Receipts (FDRs) were merely renewals of deposits made in earlier years. However, the appellant failed to furnish the complete trail of such deposits, the year of original creation, or supporting financial statements of earlier years to substantiate this claim. During the course of assessment, no such explanation or evidence was submitted despite repeated opportunities provided by the AO. Even at the appellate stage, the confirmations and certificates furnished by the appellant do not establish that the impugned deposits did not represent unexplained investments during the relevant year. The onus of proof under Section 69A of the Income Tax Act lies squarely upon the appellant, which has not been discharged. In the remand report, the AO has verified that the appellant indeed held FDRs with banks; however, there is no conclusive evidence on record to establish the source of the initial investment in such FDRs. The appellant has not produced any supporting cash flow statements, balance sheets, or financial records for the preceding years to substantiate the origin of funds invested in the said deposits. Mere renewal of FDRs does not automatically prove that the deposits were made out of explained sources. Accordingly, I find that the AO's finding that the appellant failed to prove the source of investment in such time deposits-remains uncontroverted. Therefore, the addition made by the AO amounting to Rs. 1,77,18,473/- is hereby confirmed.

5.1.2. The appellant has disclosed income only from interest and rent under the head "Income from Other Sources." Since she has not carried on any business activity, no deduction for depreciation can be allowed. The Assessing Officer (AO) has rightly held that Section 32 applies only to assets used for the purposes of business or profession. (As regards the claim of interest expenditure amounting to Rs. 26,25,360/-, the appellant has failed to establish any nexus between the borrowed funds and the earning of interest income. It is noted that the lender, Shri Kamal Jadhwani, is the appellant's husband. The payment of interest to a related party. without demonstrable utilization of the borrowed capital for earning taxable income, cannot be allowed as a deduction under Section 57(iii). The Hon'ble Supreme Court in CIT v. Rajendra Prasad Moody [115 ITR 519 (SC)] has clearly held that the expenditure must be incurred wholly and

8 ITA No.291/Mum/2026 Mumtaz Mohsin Khan exclusively for the purpose of earning income. This essential condition is not satisfied in the present case. Furthermore, depreciation under Section 32 is allowable only in respect of assets used for business or professional purposes. The appellant, being a housewife with no business or professional activity, is not eligible to claim such depreciation. Accordingly, both the claims- interest and depreciation-have been rightly disallowed by the AO. The total disallowance of Rs. 35,86,920/- is therefore confirmed. The findings of the AO and the conclusions in the remand report are upheld, and the appeal on this ground is dismissed, 5.1.3 The appellant claimed that the unsecured loans were old balances, with only Rs. 23,52,561/- received during the year, However, most confirmations were from close family members or related concerns (husband and his HUF), and no independent evidence was furnished to establish the creditworthiness of the lenders or the genuineness of the transactions. Filing of PAN or ITR alone does not discharge the onus. No proper reconciliation between the appellant's books and the lenders' statements was provided. Even if some loans represented carried-forward balances, the appellant failed to substantiate their genuineness. The AO, therefore, rightly invoked Section, and the addition of Rs. 7,04,38,713/- is upheld. The appellant's confirmations and supporting documents did not satisfactorily establish the identity, creditworthiness, or genuineness of the creditors, particularly as substantial loans were from the husband and his HUF. No independent financial statements or bank records were submitted, and even the remand evidence merely indicated opening balances without proving their source. 5.2. Ground Nos. 2 This ground is general in nature and therefore does not need to adjudicate separately.”

9 ITA No.291/Mum/2026 Mumtaz Mohsin Khan from unsecured loans. However, the Ld. AO erred in disallowing the said deductions claimed under section 57 of the Act.

10 ITA No.291/Mum/2026 Mumtaz Mohsin Khan

The Ld. AR prayed for deleting the addition confirmed by the Ld. CIT(A) without appreciating the remand report.

11 ITA No.291/Mum/2026 Mumtaz Mohsin Khan only in respect of investments made during the relevant previous year. Accordingly, no addition can be made in respect of investments pertaining to earlier years. Hence, the addition made by the Ld. AO and sustained by the Ld. CIT(A) is deleted. Ground No. 2 of the assessee’s appeal is allowed.

12 ITA No.291/Mum/2026 Mumtaz Mohsin Khan 23,52,561/-, while the remaining balance represents brought forward amounts from earlier years. During the remand proceedings, the assessee submitted all relevant documentary evidence, which forms part of the assessee’s paper book, and the Ld. AO has taken cognizance of the same in the remand report. However, the Ld. CIT(A) has not recorded any specific adverse findings in the impugned appellate order. The remand report further reveals that only the sum of Rs. 23,52,561/- represents fresh inflow during the year, whereas the balance credit of Rs. 6,54,60,792/- pertains to earlier periods. Only remaining credit balance amount to Rs. 26,25,360/- is on account of interest charged by the lender, Mr. Kamal S. Jadhwani. The assessee has discharged the onus cast upon her by furnishing evidence to establish the identity, creditworthiness, and genuineness of the loan transactions. Notably, no adverse inference has been drawn by the Ld. AO in the remand report. The Ld. AO had also issued notices under section 133(6) to the lenders and considered their replies. In view of the above, the findings of the Ld. CIT(A) are unsustainable and are accordingly set aside. The addition of Rs. 7,04,38,713/- is deleted. Ground No. 5 of the assessee’s appeal is allowed.

13 ITA No.291/Mum/2026 Mumtaz Mohsin Khan 14. In the result, the appeal of the assessee bearing ITA No.291/Mum/2026 is partly allowed. Order pronounced in the open court on 05th day of May 2026. SSd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 05/05/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI