ROHIT AGGARWAL,AMBALA vs. DCIT, CENTRAL CIRCLE-2, CHANDIGARH, DCIT, CENTRAL CIRCLE CHANDIGARH

ITA 427/CHANDI/2025Status: DisposedITAT Chandigarh09 March 2026AY 2015-16Bench: SHRI LALIET KUMAR (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)6 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal deleted the additions for unexplained investment and expenditure, ruling that uncorroborated loose sheets and retracted statements could not be the sole basis for such additions. For AY 2016-17, the disallowance of interest expenditure was deleted as the assessee had sufficient owned funds to make interest-free advances, implying borrowed funds were not diverted for this purpose.

What were the facts?

The assessee faced additions for unexplained investment (AY 2013-14) and unexplained expenditure (AY 2015-16) based on loose sheets found during a search. For AY 2016-17, the Ld. AO disallowed bank interest expenditure claimed under section 57(iii) on the grounds that the assessee had advanced interest-free loans while paying interest on borrowed funds.

What were the issues?

1. Whether additions based on uncorroborated loose sheets and retracted statements are valid. 2. Whether interest expenditure claimed under section 57(iii) can be disallowed when the assessee possesses sufficient own funds to make interest-free advances.

Which sections of the Income-tax Act were involved?

Section 153A(1)(b),Section 143(3),Section 131,Section 132(4),Section 139(1),Section 153A,Section 57(iii)

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Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

Heard together (3 matters)

ITA No.324/CHANDI/2025
ITA No.427/CHANDI/2025
ITA No.428/CHANDI/2025

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Per Bench

1.

Aforesaid appeals by assessee for captioned Assessment Years arises out of separate orders of learned first appellate authority. First, we take up appeal for Assessment Year (AY) 2013- 14 wherein the sole grievance of the assessee is addition of unexplain

The order continues below.

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