BCD JOINT VENTURE,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX , CIRCLE 42 (1) (1), MUMBAI

In this appeal, the appellant claims that for A.Y. 2014-15, certain loan and the interest claimed on it were genuine whereas the Revenue adjudicates the same as not genuine and the appeal is pending before Ld. CIT(A). The present appeal is for A.Y. 2015-16 and Ld. Jt.CIT(A) has adjudicated that the interest claim on alleged bogus loan, should not be allowed as business expenditure. Hence, the appellant filed an appeal against the order of Ld. JCIT(A), stating that the main issue relating to loan is still pending before Ld. CIT(A) in the earlier year i.e., A.Y. 2014-15.

The main grievance of the appellant before the ITAT is that the genuineness of loan should be adjudicated first and then only whether interest is allowable or not on the same had to be decided. The argument of appellant is that the order of Ld. JCIT(A) may be set aside to him back with a 2 BCD Joint Venture direction that the same may be adjudicated after Ld. CIT(A) decides the main appeal relating to genuineness of loan.

The Ld. DR relied on the orders of Ld. AO and Ld. JCIT(A).

Heard both sides. There is sufficient force in the argument of Ld. AR of appellant. The genuineness of loan has to be adjudicated at the first instance as the interest on the same would be consequential. Hence, the appeal order of Ld. JCIT(A) is set aside to his file with a direction to keep this appeal in abeyance till the main appeal relating to loan is decided. The Ld. JCIT(A) is at liberty to take a decision after the Ld. CIT(A) passed the appeal order.

The appeal of appellant is allowed for statistical purposes. Order pronounced in the open Court on 25/07/2025.