JESWANI LIQUORS,NAGPUR vs. ACIT CIRCLE -4, NAGPUR

ITA 548/NAG/2025Status: DisposedITAT Nagpur31 August 2026AY 2014-159 pages
AI SummaryDismissed

What were the facts?

The assessee paid interest at 18% to related parties while paying 15% to unrelated parties. The Assessing Officer disallowed the excess interest, which was upheld by the CIT(A). The assessee argued commercial expediency for the higher interest rate.

What did the Tribunal hold?

The Tribunal held that the assessee failed to provide cogent evidence to justify the higher interest rate paid to related parties. The arguments regarding commercial expediency and flexibility in repayment were not supported by documentary evidence.

What were the issues?

Whether the disallowance of interest paid to related parties at a rate higher than that paid to unrelated parties was justified under Section 40A(2)(a) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 40A(2)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR

For Appellant: Shri Kapil Chandak, Advocate
For Respondent: Shri Surjit Kumar Saha, Sr.DR
Hearing: 12.06.2026Pronounced: 31.08.2026

PER KHETTRA MOHAN ROY, AM:

This appeal filed by the assessee is directed against the order of National Faceless Appeal Centre, Delhi, (for short, “CIT(A)”), dated 12/08/2025 passed under section 250 of the Income Tax Act, 1961 (for short, “Act”) which is emanating from the assessment order dated 09.11.2016 passed u/s. 143(3) of the Act by the ACIT, Circle-4, Nagpur, for the Assessment Year (AY) 2014-15. 2. This is the second round of litigation. In the earlier round, this Tribunal, vide order dated 22.11.2023 in ITA No. 25/NAG/2021 restored the matter to the file of the Ld.CIT(A) for fresh adjudication. In compliance thereto, Ld.CIT(A) passed the impugned order confirming the disallowance. Aggrieved

The order continues below.

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