M/S. OM SHANTI HOUSING ,MUMBAI vs. INCOME TAX OFFICER WARD 20(2)(3), MUMBAI

ITA 672/MUM/2025Status: DisposedITAT Mumbai28 March 2025AY 2017-18Bench: SMT. BEENA PILLAI (Judicial Member), SHRI GIRISH AGRAWAL ( (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO and CIT(A) erred in disallowing the interest expenses. It noted that similar disallowances for the same lenders in prior assessment years were deleted by the CIT(A) and ITAT, establishing a principle of consistency.

What were the facts?

The assessee, a property developer, claimed interest expenses on loans from seven parties. The Assessing Officer (AO) disallowed the interest, citing an investigation report that suggested the lenders were unavailable and lacked business activity. The CIT(A) upheld the disallowance, stating each year is separate.

What were the issues?

Whether the disallowance of interest expenses on loans from parties, for whom similar disallowances were deleted in prior years, is justified. Whether the CIT(A) erred in not following the principle of consistency.

Which sections of the Income-tax Act were involved?

Section 68

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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL

For Appellant: Shri. Anish Shah
For Respondent: Shri. Soumendu Kumar Dash-
Hearing: 12.03.2025Pronounced: 28.03.2025

Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 15/01/2025 passed by Ld. CIT(A), Agra for Assessment Year 2017- 18. 1. “On the facts and in the circumstances of the case and in law the Commissioner of Income tax (Appeal),ADDL/JCIT(A)-Agra erred in deciding the appeal by holding as follows: The learned CIT (A) erred in sustaining disallowance of Rs. 88,42,064/- being interest paid to the following 7 parties as your appellant allegedly failed to prove genuineness of expenditure and thereby sustaining reduction of closing work-

2

The order continues below.

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