LALIT C. JOBANPUTRA,MUMBAI vs. DCIT, CC-1(2), MUMBAI

THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER & MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER

ITA NO. 6370/Mum/2025 (A.Y.2011-12) Lalit C. Jobanputra DCIT 6th Floor, Citi Point, Telli Galli, Central Circle(1)(2), Maharashtra Andheri East, Mumbai 400069, Maharashtra v/s PAN AACPJ1804F Appellant Respondent

Assessee by Sh. Parth Gabani & Shri Vijay Tripathi Department by Sh. Rajesh Kumar Yadav, CIT- DR Date of Hearing 12-03-2026 Date of Pronouncement 02-06-2026

ORDER PER KAVITHA RAJAGOPAL :- The present appeal is filed by the Assessee against the order of Ld. Commissioner

of Income Tax (Appeals)-47, Mumbai (‘Ld. CIT(A)’ for short), dated 18/08/2025 for the

Assessment Year 2011-12.

“The learned CIT(A) erred in upholding the order passed by the Ld DCIT u/s.143(3) rws 153A rws 254 of the Act, since it is passed without a proper consideration and appraisal of the facts of the case. An incorrect and improper order has been passed without considering the appellants contentions. It is capricious in nature and has been made ignoring the genuine facts, and the submissions of the appellant with an intention to punish the appellant, and should be quashed and annulled. GROUND NO.2:

2 ITA No. 6307/MUM/2025 Lalit C.Jobanputra Without prejudice to ground no. 1 above, the CIT(A) erred in upholding the additions made by the Ld. DCIT of Rs.93,06,477/- on account of undisclosed interest income, even though the same is contrary to the facts of the case and applicable provisions of the Act. GROUND NO.3: Without prejudice to ground no.1 and 2 above, the CIT(A) erred in passing the appellate order despite being duly informed that the Appellant was awaiting the response of the RTI application filed for obtaining the statement on oath of Mr. Rajiv Bhale, which was relied upon by the Ld. DCIT. The appellant had received the said statement only a few days prior to the passing of the impugned order, leaving no reasonable opportunity to rebut or make submissions thereon. The action of the Ld. CIT(A) in proceeding to decide the appeal without affording such effective opportunity amounts to a violation of the principles of natural justice.”

original return of income u/s 139(1) of the Income Tax Act, 1961 ('Act' for short)

dated24/10/2011 declaring total income at Rs. 81,47,98,450/-. Pursuant to a search and

survey u/s 132 of the Act conducted by the Investigating Wing, Mumbai, in group

concerns of Joban Putra on 19/08/2011, where the Assessee was also covered, notice u/s

153A of the Act was issued and served upon the Assessee. In response to the said notice,

the Assessee filed his return of income dated 14/07/2012 declaring total income at Rs.

82,37,30,450/- for the year underconsideration.

of survey proceeding at the residence of the Assessee wherein it was observed that the

Assessee had given loan amount of Rs. 5.50 crores to Sh. Rajiv Bhale at an interest rate

of 24% per annum, amounting to Rs. 93,06,477/- which according to the Ld. A.O. was

notdeclared by the Assessee and hence an addition on undisclosed income was made by

3 ITA No. 6307/MUM/2025 Lalit C.Jobanputra the Ld. A.O. The Assessee was in appeal before the first appellate authority who dismissed the said appeal on the ground that the Assessee’s contention was not supported by any substantial evidence.

vide order dated 17.02.2021, set aside the issue to the Ld. AO with the direction to

verify with Shri Rajeev Bhale whether the assessee had received interest as per the

seized documents. The Ld. AO, during the set aside proceedings, issued summons

to Shri Rajeev Bhale and statement was duly recorded where he had confirmed

receiving Rs.5.50 crores from the assessee and also admitted that there was no

formal agreement entered into between him and the assessee and that the loan was

repaid back to the assessee by adjusting Rs.4.50 crores against purchase of his

properties mortgaged with the State Bank of India in the year 2017. The Ld. AO

observed that there was contradiction in the assessee’s statement where he had

claimed that he had recovered the principal amount fully, but, whereas record show

that only Rs.4.50 crore were adjusted. Further, the Ld. AO, on the basis of the

seized documents, the statement of Shri Rajeev Bhale along with the admission

before the Tribunal that he had received Rs.39,37,500/- as interest basis which the

Ld. AO made an addition of Rs.93,06,477/- as interest, received by the assessee,

but, not declared in his return of income as being undisclosed income for the

impugned year thereby determining the total income at Rs.83,30,36,930/- and

passed the assessment order dated 27.12.2022 under Section 143(3) r.w.s. 153A

4 ITA No. 6307/MUM/2025 Lalit C.Jobanputra r.w.s. 254 of the Act. Further aggrieved, the assessee was in appeal before the first

appellate authority, who vide order dated 18.08.2025 upheld the addition made by

the Ld. AO on the ground that adverse inference is drawn where the assessee

himself has accepted that he has given loan for which the assessee must have

charged interest amounting to Rs.93,06,477/- as per the seized documents.

record. The moot issue that requires adjudication is whether the assessee has

received interest on the loan given to Shri Rajeev Bhale which, according to the

Department, was not declared in his return of income and the assessee’s contention

is that he had not received any interest income towards the loan extended by the

assessee to Shri Rajeev Bhale. It is observed that during the search proceedings

certain incriminating documents marked as page 7-10 Annexure-A was seized

from the residence of the assessee where the details of loan of Rs.5.50 crore was

given to Shri Rajeev Bhale charging an interest @ 24% per annum, was found

which revealedan interest amount of Rs.93,06,477/-. The assessee though had

accepted that he had given a loan of Rs.5.50 crore to Shri Rajeev Bhale for

purchase of a floor at an under constructed property at Pune, but denied the fact

that interest @ 24% was received by him. The assessee further stated that since the

property was not constructed, the assessee had demanded the money from Shri

5 ITA No. 6307/MUM/2025 Lalit C.Jobanputra Rajeev Bhale along with the interest @ 24%, but, alleges that only the principal

amount was recovered from the said party. Based on the direction of the Tribunal,

the Ld. AO was directed to conduct investigation/verifywith Shri Rajeev Bhale

whether he had paid interest to the assessee as per the seized paper where it had

mentioned that interest was receivable by the assessee. The Ld. AO issued notice

under Section 142(1) of the Act calling for details along with documentary

evidences. The Ld. AO also issued summons under Section 131 of the Act to Shri

Rajeev Bale, who, then, appeared before the Ld. AO for cross-examination and a

statement was duly recorded on oath. On perusal of the said statement, it is evident

that the assessee has advanced Rs.5.50 crore which was for clearing the litigation

for property which the assessee was intending to purchase a building which was to

be constructed at Pune. He further stated that no formal agreement was signed.

The statement further clarified that since Shri Rajeev Bhale was unable to repay

the assessee the advance of Rs.5.50 crore, another property of Shri Rajeev Bhale

which was taken in possession by the State Bank of India against the dealership

loan was decided to be purchased by the assessee from SBI and the assessee had

adjusted the advance amount against purchase of the said property. Pertinently,

with regard to the interest payment alleged to have been received by the assessee,

there was no other details other than the seized documents named Annexure A-3 in

which the assessee is said to have computed the interest for the advance receivable

at 24%, brought about by the Ld. AO. The assessee has been reiterating that he

6 ITA No. 6307/MUM/2025 Lalit C.Jobanputra had received only the principal amount, that too with great difficulty, and that all

the transactions with Shri Rajeev Bhale were made through banking channels only.

The ld. AO proceeded to make an addition towards the interest received on the

basis that the assesseee has submitted before the Tribunal that he had received

interest to the tune of Rs.39,37,500 @ 9% towards the loan advance to Shri Rajeev

Bhale and had declared the same in his return of income. The Ld. AO made an

addition on the ground that the assessee has contradicted his statement that he had

not received any interest income and, subsequently, has admitted that he had

received only 9% of income which was declared in his ROI. The ld. AO also

found contradictions in the assessee’s statement where he is said to have been not

disclosed the fact that Shri Rajeev Bhale, instead of repaying the said advance

amount, had settled the same against another immovable property owned by him

and also that the assessee has stated that he had received the principal amount of

Rs.5.50 crore, but, on perusal of the sale deed dated 27.12.2017 towards purchase

of immovable property, it was noted that only Rs.4.50 crore were adjusted by the

assessee towards the loan advanced. The ld. AO further held that the seized

material pertaining to the working of the interest was very meticulously prepared

according to day-wise calculations which, again, is said to be negating the

assessee’s contention. The Ld. AO rejected the assesseee’s alternative contention

that the interest addition can be made after reducing the 9% interest which was

already declared by the assessee in its ROI for the reason that no supporting

7 ITA No. 6307/MUM/2025 Lalit C.Jobanputra documents were filed by the assessee towards his claim that the interest income of

Rs.39,37,500/- shown in the balance sheet filed by the assessee as interest received

on unsecured loan was not proved to have been received from Shri Rajeev Bhale.

The Ld. AO made an addition on the entire interest of Rs.93.06 lakhs as per the

seized material. The Ld. CIT(A) upheld the addition made by the Ld. AO relying

on the finding of the AO.

iota of doubt that the loan which was advanced by the assessee to Shri Rajeev

Bhale could not be recovered due to the financial condition of Shri Rajeev Bhale,

who, in turn, had settled the same by selling another property belonging to him to

the assessee for a total consideration of Rs.10,20,39,427/- where Rs.4.50 crore was

adjusted towards the loan given to Shri Rajeev Bhale and a balance payment of

Rs.5,70,39,427/- was paid by the assessee and the sale deed was registered on

27.12.2014. This fact was also not controverted by the lower authorities. Though

the assessee had claimed that he had declared 9% of the interest received in his

return of income, the Ld. AO failed to consider that this was received from Shri

Rajeev Bhale and made the entire addition towards the interest worked out in the

seized documents. It is not the case of the Revenue that the interest was paid by

cash to the assessee and in the absence of the same, we can infer that all the

transactions had taken place through banking channels only. In such

circumstances, the lower authorities have not brought anything on record to show

8 ITA No. 6307/MUM/2025 Lalit C.Jobanputra that the assessee has received interest out of this loan when the fact remains that

Shri Rajeev Bale was in a financial crunch even to settle the principal amount,

which circumstances also support this fact. There can be presumably no interest

received by the assessee from the said party. It also supports the assessee’s

argument that Shri Rajeev Bhale could not have paid the assessee interest @ 24%.

Though the Tribunal in the first round of appeal has remanded this issue to the AO,

that addition cannot be made merely on certain statement or calculations done by

the assesseee without the Ld. AO substantiating the findings that interest had

actually accrued and received by the assesseee followed by confirmation from the

other party which would ensure certainty of receipt of income in the hands of the

assessee when the Tribunal had categorically given a finding that the ld. AO

should cross verify with Shri Rajeev Bhale that the assessee had received interest,

the AO has failed to examine or investigate into the issue which was the very

purpose of the remand and, rather, had gone by the presumption and surmises that

the assessee as per his workings must have received interest from Shri Rajeev

Bhale. This finding of the lower authorities is not supported by any substantial

evidence and, hence, we deem it fit to hold that the addition towards interest

income made in the hands of the assesseee is without merits and is liable to be

deleted. We, therefore, allow ground No.2 raised by the assessee.

and are hereby rendered academic in nature.

9 ITA No. 6307/MUM/2025 Lalit C.Jobanputra 10. In the result, the appeal filed by the assessee is hereby allowed.

The following order is pronounced on 02/ 06/2026 as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (VIKRAM SINGH YADAV) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai: Dated: 02 /06/2026 Kishore, Sr. PS

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

10 ITA No. 6307/MUM/2025 Lalit C.Jobanputra