GIRISH RAGHAVAN,MUMBAI vs. ASSTT. CIT-26(1), MUMBAI

ITA 6955/MUM/2025Status: DisposedITAT Mumbai04 March 2026AY 2014-15Bench: Justice (Retd.) CV Bhadang, Hon'ble (President), Shri Arun Khodpia, Hon'ble (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the disallowance under Section 41(1) for cessation of liability cannot be sustained as the expiry of the limitation period only bars the remedy and not the right. Furthermore, ad-hoc disallowances for hotel and travel expenses are not permissible.

What were the facts?

The assessee incurred a liability towards Rockfort Gulf FZE in FY 2011-12, which was outstanding in assessment year 2014-15. The Assessing Officer treated this as a cessation of liability under Section 41(1) and made a disallowance. Additionally, a disallowance was made for hotel and travel expenses.

What were the issues?

Whether the outstanding trading liability could be treated as cessation of liability under Section 41(1) when the limitation period for recovery had expired? Whether ad-hoc disallowances for hotel and travel expenses are justified?

Which sections of the Income-tax Act were involved?

Section 41(1),Section 37(1),Section 143(2),Section 142(1)

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Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI

Before: Justice (Retd.) C V Bhadang, Hon’ble & Shri Arun Khodpia, Hon’ble

For Appellant: Shri Devendra Jain
For Respondent: Shri Swapnil Choudhary
Hearing: 04.02.2026Pronounced: 4.03.2026

Per Justice (Retd.) C V Bhadang, President:

By this appeal, the appellant-assessee is challenging the order dated 14.08.2025 passed by NFAC, Delhi (‘CIT(A)’ short), which in turn arose out of assessment order dated 26.12.2016 passed by the Assessing Officer (‘AO’ for short). The appeal relates to assessment year 2014-15. 2. The appellant is a resident individual. The appellant, inter alia, engages in the business of energy and fuel management, mining and acquisition. The assessee’s business includes evaluation of market, target potential clients, assisting the client to avail credit facility, planning of shipment of coal etc. During the relevant year, the appellant filed his Return of Income (RoI) for the assessment year in question on 3

The order continues below.

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