KAMAL SHADIJA,INDORE vs. ASSESSMENT UNIT, INCOME TAX EPARTMENT, DELHI

ITA 637/IND/2025Status: DisposedITAT Indore06 February 2026AY 2020-21Bench: SHRI B.M. BIYANI (Accountant Member), SHRI PARESH M. JOSHI (Judicial Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to establish the nexus between borrowed funds and loans advanced, which is a condition precedent for claiming deduction under Section 57. The Tribunal found that the income was under-reported and the penalty under Section 270A was rightly levied.

What were the facts?

The assessee claimed a deduction for interest expenditure against interest income under 'Income from other sources'. The Assessing Officer (AO) disallowed the deduction for lack of nexus between borrowed funds and loans advanced, and initiated penalty proceedings under Section 270A. The assessee accepted the disallowance but contested the penalty.

What were the issues?

Whether the penalty under Section 270A is leviable when a deduction claimed under Section 57 is disallowed due to lack of substantiation and nexus. Whether the assessee's claim for deduction was bona fide and all material facts were disclosed.

Which sections of the Income-tax Act were involved?

Section 57,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri S.S. Deshpande, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 19.01.2026Pronounced: 06.02.2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 07.07.2025 passed by learned Commissioner of Income-tax-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 28.03.2023 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 270A of Income-tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2020-21, the assessee has filed this appeal on following grounds:

“1. The Ld. CIT(A) has erred in maintaining the penalty of Rs. 91,168/- u/s 270A.

Kamal Shadija ITA No. 637/Ind/2025 – AY 2020-21

2.

The levy of penalty u/s 270A is illegal and bad in law since there is no under reporting and mis-reporting of income. The assessee

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 57

All 1,225 judgments and leading authorities on Section 57 →

Latest GST High Court judgments

Search GST case law →