M/S MAHESHWARI BUILDERS vs. A.C.I.T., CIRCLE-II BIKANER

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ITA/24/2016HC Rajasthan2026:RJ-JD:41251-DB20 August 2026Author: PUSHPENDRA SINGH BHATI, PRAVEER BHATNAGAR2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the matter requires to be remitted back to the Income Tax Appellate Tribunal (ITAT) for fresh consideration. This decision is based on the joint submission of the learned counsel for the parties, who agreed that the controversy is similar to that decided in D.B. Income Tax Appeal No. 59/2009. In that prior case, the High Court had found that the Tribunal had wrongly relied on a previous judgment of the High Court which did not address the provisions of Section 145(3). Therefore, the appeals were disposed of by remanding the matter to the Tribunal for fresh consideration in accordance with law and in terms of the directions contained in the aforesaid order. The Tribunal was also directed to expedite the hearing. No specific finding on the entitlement to deduct interest or commission was made by the High Court in this judgment; the operative direction is a remand.

What were the facts?

The assessee is M/s Maheshwari Builders, and the respondent is the Assistant Commissioner of Income Tax, Circle-II, Bikaner. The appeal concerns assessment year(s) not explicitly stated but implied to be related to the previous litigation. The appeal challenges an order of the Income Tax Appellate Tribunal (ITAT). The procedural history involves a prior High Court decision in D.B. Income Tax Appeal No. 59/2009 (M/s Mohta Construction Company Vs. Assistant Commissioner) which remanded the matter to the ITAT. The present appeal before the High Court is also being disposed of based on the same reasoning as the prior appeal, remanding the matter back to the ITAT for fresh consideration.

What were the issues?

1. Whether the assessee is entitled to claim deduction of interest paid to 3rd party creditors after assessment of net profit rate in cases where resort has been taken to the provisions of Section 145(3) by rejecting the books of accounts? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: Not recorded in the judgment. The judgment refers to a prior High Court decision in D.B. Income Tax Appeal No. 59/2009 which dealt with similar issues, including the entitlement to claim deduction of interest paid to third-party creditors and bank commission after the assessment of net profit rate when books of accounts were rejected under Section 145(3). The High Court in that prior instance found that the Tribunal had wrongly relied on a previous judgment of the High Court which did not refer to Section 145(3).

Which sections of the Income-tax Act were involved?

Section 145(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2026:RJ-JD:41251-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 24/2016 CNR: RJHC010379932016 | URN: ITA / 118U / 2016 M/s Maheshwari Builders, 25-13, Sadul Ganj, Bikaner, through its Power of Attorney Holder Shri Vijay Mohta S/o Shri Jai Kishan Ji Mohta, aged 36 Years, R/o 25-B. Sadul Ganj, Bikaner. ----Appellant Versus Assistant Commissioner of Income Tax, Circle-II, Bikaner ----Respondent For Appellant(s) : Mr. Sharad Kothari with Mr. Chirag Soni For Respondent(s) : Mr. KK Bissa HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE PRAVEER BHATNAGAR

Order 20/08/2026

1.

Learned counsel for the parties jointly submit that the controversy involved in the present matter is similar to the controversy already decided by this Court vide order dated 23.01.2018 passed in D.B. Income Tax Appeal No.59/2009 (M/s hereunder:

“1. By way of these appeals, the appellant department has challenged the judgment and order of the Income Tax Appellate Tribunal whereby, the Tribunal partly allowed the appeal of the department and reversed the finding given by the CIT(A) holding that the judgment of this Court in Shri Ram Jhanwar Lal v. IT (D.B. Income Tax Appeal No.10/2006) which is sought to be relied upon has no relevance on the issue which is involved. (Uploaded on 22/08/2026 at 12:43:22 PM) (Downloaded on 28/10/2026 at 12:41:37 AM)

[2026:RJ-JD:41251-DB] (2 of 2) [ITA-24/2016]

2.

This Court while admitting the appeals framed following substantial question of law :- DB ITA No.59/2009 "Whether the assessee is entitled to claim deduction of interest paid to 3rd party creditors after assessment of net profit rate in cases where resort has been taken to the provisions of Section 145(3) by rejecting the books of accounts ?" DB ITA No.62/2009 "Whether the assessee is entitled to claim deduction of interest paid to third party creditors and bank commission after assessment of net profit rate in cases where resort has been taken to the provisions of Section 145 by rejecting the books of accounts ?" DB ITA No.58/2009 "Whether the assessee is entitled to claim deduction of interest paid to 3rd party creditors after assessment of net profit rate in cases where resort has been taken to the provisions of Section 145(3) by rejecting the books of accounts ?"

3.

We have heard the learned counsel for the parties.

4.

It is true that the issue which this Court in the reported decision has not even referred to Section 145(3) in the judgment. Therefore, the Tribunal has wrongly relied upon the said judgment of this Court.

5.

The matter requires to be remitted back. It will be open for the parties to raise all the contentions before the Tribunal. The Tribunal may expedite the hearing.

6.

Accordingly, the appeals stand disposed of.”

2.

In view of the joint submission made by learned counsel for the parties, the matter is remanded to the concerned Tribunal for fresh consideration in accordance with law and in terms of the directions contained in the aforesaid order.

3.

The appeal stands disposed of accordingly. (PRAVEER BHATNAGAR),J (DR.PUSHPENDRA SINGH BHATI),J 47/Nirmala Powered by TCPDF (www.tcpdf.org) (Uploaded on 22/08/2026 at 12:43:22 PM) (Downloaded on 28/10/2026 at 12:41:37 AM)

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