SHRI JAGDISHBHAI GORDHANBHAI DOABARIYA ,RAJKOT vs. THE PR. CIT-1, RAJKOT, RAJKOT

ITA 142/RJT/2023Status: DisposedITAT Rajkot29 August 2025AY 2018-19Bench: DR. ARJUN LAL SAINI (Accountant Member), SHRI DINESH MOHAN SINHA (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer (AO) had properly considered the facts and allowed the deduction for interest expenditure. The Tribunal relied on judicial precedents stating that the rate of interest paid is not relevant for allowing deduction under Section 57(iii) if the expenditure was incurred solely for earning income.

What were the facts?

The assessee claimed deduction for interest expenditure incurred on loans taken, which were used to fund investments in their company, from which they also earned interest income. The Principal Commissioner of Income-tax (PCIT) invoked revisional jurisdiction under Section 263, holding the assessment order erroneous and prejudicial to revenue.

What were the issues?

Whether the PCIT was justified in revising the assessment order on the grounds that the deduction for interest expenditure was excessive, and if the AO's assessment was erroneous and prejudicial to the revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 57(iii)

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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA

For Respondent: Shri Sanjay Punglia, ld.CIT-DR
Hearing: 09/06/2025Pronounced: 29/08/2025

Per, Dr. Arjun Lal Saini, Accountant Member:

By way of this appeal, the assessee has challenged the correctness of the order dated 26.03.2023 passed by the Learned Principal Commissioner of Income-tax (in short “Ld. PCIT”) under section 263 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), for the assessment year 2018-19.Grievances raised by the assessee, which, being interconnected, will be taken up together, are as follows: “1.Th

The order continues below.

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