DINDAYAL MAGASVARGIYA SAHAKARI SOOT GIRNI LTD ,WAGHWADI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SANGLI., NISHANT COLONY

ITA 2325/PUN/2025Status: DisposedITAT Pune29 January 2026AY 2013-14Bench: SHRI MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)9 pages
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What did the Tribunal hold?

The Tribunal held that the interest provision was an ascertained liability under the mercantile system of accounting and could not be disallowed under Section 37. The Tribunal relied on a Supreme Court judgment where similar provisions were allowed.

What were the facts?

The assessee, a cooperative spinning mill, claimed a deduction for interest accrued but not yet due on a soft loan from the Government of Maharashtra. The Assessing Officer disallowed this deduction, treating it as an unascertained liability. The assessee argued that it followed mercantile accounting and the interest was an ascertained liability under the loan agreement.

What were the issues?

Whether provision for interest on a government loan, accrued but not due as per specific conditions, is an unascertained liability and thus not deductible. Whether reassessment proceedings initiated beyond 4 years and based on audit objections are valid.

Which sections of the Income-tax Act were involved?

Section 37,Section 147,Section 148,Section 143(3),Section 43B

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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Pramod S. Shingte
For Respondent: Shri R. Y. Balawade
Hearing: 27.01.2026Pronounced: 29.01.2026

PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 01.08.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2013-14. 2. The appellant has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law, Ld. AO erred in initiating reassessment proceedings u/s 147 for AY 2013-14, being the year beyond 4 years and for which assessment order u/s 143(3) has already been passed, thereby

2 violating first proviso to section 147, therefore reassessment proceedings are void ab initio and consequential orders needs to be annulled.

2.

On the facts and in the circumstances of

The order continues below.

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