AADYA OVERSEAS PRIVATE LIMITED,. V. ITO WARD 1(1), DELHI, DELHI

ITA 3153/DEL/2025

AI Insights

The case involves Aadya Overseas Private Limited appealing against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which sustained the disallowance of proportionate interest of Rs.16,57,754 by the AO. The disallowance was based on the premise that borrowed funds were used for non-business purposes. The Tribunal found that the lower authorities had not properly examined the evidence and facts presented by the assessee, leading to the decision to remit the case back to the AO for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791744 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 13-05-2025
• Other Referred Cases: TIN box 249 ITR 216
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH; OM PRAKASH
• Assessee Lawyers: RAJIV SAXENA; SUMANGLA SAXENA; RAJIV SAXENA; SUMANGLA SAXENA
• Keywords: Set aside; Opportunity of being heard; Proportionate interest; Additional evidence
• Section: 143(3); 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘C’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER& SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.3153/Del/2025 [Assessment Year: 2013-14] Aadya Overseas Private Limited, C/o-H 35, First Floor, Jangpura Extension, New Delhi-110014 PAN AAACS1778E Vs Income Tax Officer, Ward-1(1), C.R. Building, Delhi-1100020 Appellant Respondent Assessee by Shri Rajiv Saxena, Adv. & Ms. Sumangla Saxena, Adv. Shri Shyam Sunder, Adv. Revenue by Shri Om Prakash, Sr. DR Date of Hearing 09.12.2025 Date of Pronouncement 10.12.2025 ORDER PER AMITABH SHUKLA, AM, The captioned appeal has been preferred by the assessee against order dated 02.04.2025 of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, New Delhi[hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 23.03.2016 passed u/s 143(3) of the Income Tax Act, 1961 pertaining to Assessment Year 2013-14. The word ‘Act’ herein this order would mean Income Tax Act, 1961. Printed from counselvise.com ITA No.3153/Del/2025 Page | 2 2. The only issue raised by the assessee through its solitary ground of appeal is regarding a disallowance of proportionate interest of Rs.16,57,754/- made by the ld. AO on the premise that borrowed funds were utilized for non-business purposes. The ld. Counsel for the assessee argued that the ld. CIT(A) sustained the impugned addition inter alia holding as under:- “………..6.6 The second issue is on the proportionate disallowance of interest expenditure.On perusal of the submissions, it is seen that appellant has not submitted any documentary evidence to substantiate his claim that the investment under consideration was not made out of mixed box of funds. The appellant did not submit any document even during remand proceeding or as additional evidence which maysubstantiate appellant's claim that investment was not made out of mixed box of funds. The appellant has only made written submissions in this regard that the investments were made out of surplus funds available with it. The appellant has failed to substantiate the said claim. The AO in his remand report also submitted the same comments. Therefore, in absence of the documentary evidence disallowance of Rs. 1657754 made by the AO as proportionate interest in respect of investment made for non business purpose is hereby confirmed…………”. 3. The ld. Counsel for the assessee Ms. Sumangla Saxena took us through her paper book so as to indicate that the ld. AO and the ld. CIT(A) have misread the facts and that in reality no addition was permissible. 4. Per contra, the ld. DR has placed reliance upon the order of the lower authorities. Our attention was also invited to assessee’s application dated 11.04.2016 made under section 154 of the Act to the AO on the same argument where the assessee had requested for rectification of the Printed from counselvise.com ITA No.3153/Del/2025 Page | 3 impugned addition. It was stated that the same was pending currently and that therefore the matter will be considered for remission to the AO. 5. We have heard rival submissions on the matter in the light of material all available on records. We have noted that the ld. AO has clearly observed on page-7 of his order that the assessee had failed to substantiate its claims. We have also noted that the ld. First Appellate Authority has also confirmed the impugned addition observing that the assessee did not produce any evidence before him even during remand/appellate proceedings. The assessee therefore cannot escape the blame of not discharging its onus of providing lower authorities sufficient documentary evidence in support of its claims. Be that as it maybe we are of the considered view that ends of justice will be met if the matter is remitted back to the file of the ld. AO for verification of the documents placed before us. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. Without prejudice it has also been noted that in this case the Ld. AO did not have adequate opportunities to examine the varied facts and accompanying evidences seminal therein. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. Accordingly, the issue of Printed from counselvise.com ITA No.3153/Del/2025 Page | 4 addition made by the Ld. AO amounting to Rs. 16,57,754/- which have been contested by the assessee through its ground of appeal stands remitted back to the Ld. AO for limited verification of details/evidences produced by the assessee and for decision in accordance with law after giving due opportunity of being heard to the assessee. While examining the matter the ld. AO shall keep in mind the argument putforth by the ld. Counsel for the appellant that the impugned amounts are merely old balances as well as the fact that they included items like car or bank charges, financial charges, etc. To the extent the order of lower authorities on this issue stands set aside. The Ld. AO shall give opportunities of being heard to the assessee and it shall be bounden upon the assessee to comply with the notices issued by the Ld. AO. Any non- compliance on the part of the assessee can be adversely viewed. The assessee is at liberty to produce all the evidences in support of its claims before the Ld. AO during the verification proceedings. The ground of appeal raised by the assessee are therefore allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 10th December, 2025. Sd/- Sd/- [ANUBHAV SHARMA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:. 10.12.2025 Printed from counselvise.com ITA No.3153/Del/2025 Page | 5 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘C’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER& SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.3153/Del/2025 [Assessment Year: 2013-14] Aadya Overseas Private Limited, C/o-H 35, First Floor, Jangpura Extension, New Delhi-110014 PAN AAACS1778E Vs Income Tax Officer, Ward-1(1), C.R. Building, Delhi-1100020 Appellant Respondent Assessee by Shri Rajiv Saxena, Adv. & Ms. Sumangla Saxena, Adv. Shri Shyam Sunder, Adv. Revenue by Shri Om Prakash, Sr. DR Date of Hearing 09.12.2025 Date of Pronouncement 10.12.2025 ORDER PER AMITABH SHUKLA, AM, The captioned appeal has been preferred by the assessee against order dated 02.04.2025 of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, New Delhi[hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 23.03.2016 passed u/s 143(3) of the Income Tax Act, 1961 pertaining to Assessment Year 2013-14. The word ‘Act’ herein this order would mean Income Tax Act, 1961. Printed from counselvise.com ITA No.3153/Del/2025 Page | 2 2. The only issue raised by the assessee through its solitary ground of appeal is regarding a disallowance of proportionate interest of Rs.16,57,754/- made by the ld. AO on the premise that borrowed funds were utilized for non-business purposes. The ld. Counsel for the assessee argued that the ld. CIT(A) sustained the impugned addition inter alia holding as under:- “………..6.6 The second issue is on the proportionate disallowance of interest expenditure.On perusal of the submissions, it is seen that appellant has not submitted any documentary evidence to substantiate his claim that the investment under consideration was not made out of mixed box of funds. The appellant did not submit any document even during remand proceeding or as additional evidence which maysubstantiate appellant's claim that investment was not made out of mixed box of funds. The appellant has only made written submissions in this regard that the investments were made out of surplus funds available with it. The appellant has failed to substantiate the said claim. The AO in his remand report also submitted the same comments. Therefore, in absence of the documentary evidence disallowance of Rs. 1657754 made by the AO as proportionate interest in respect of investment made for non business purpose is hereby confirmed…………”. 3. The ld. Counsel for the assessee Ms. Sumangla Saxena took us through her paper book so as to indicate that the ld. AO and the ld. CIT(A) have misread the facts and that in reality no addition was permissible. 4. Per contra, the ld. DR has placed reliance upon the order of the lower authorities. Our attention was also invited to assessee’s application dated 11.04.2016 made under section 154 of the Act to the AO on the same argument where the assessee had requested for rectification of the Printed from counselvise.com ITA No.3153/Del/2025 Page | 3 impugned addition. It was stated that the same was pending currently and that therefore the matter will be considered for remission to the AO. 5. We have heard rival submissions on the matter in the light of material all available on records. We have noted that the ld. AO has clearly observed on page-7 of his order that the assessee had failed to substantiate its claims. We have also noted that the ld. First Appellate Authority has also confirmed the impugned addition observing that the assessee did not produce any evidence before him even during remand/appellate proceedings. The assessee therefore cannot escape the blame of not discharging its onus of providing lower authorities sufficient documentary evidence in support of its claims. Be that as it maybe we are of the considered view that ends of justice will be met if the matter is remitted back to the file of the ld. AO for verification of the documents placed before us. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. Without prejudice it has also been noted that in this case the Ld. AO did not have adequate opportunities to examine the varied facts and accompanying evidences seminal therein. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. Accordingly, the issue of Printed from counselvise.com ITA No.3153/Del/2025 Page | 4 addition made by the Ld. AO amounting to Rs. 16,57,754/- which have been contested by the assessee through its ground of appeal stands remitted back to the Ld. AO for limited verification of details/evidences produced by the assessee and for decision in accordance with law after giving due opportunity of being heard to the assessee. While examining the matter the ld. AO shall keep in mind the argument putforth by the ld. Counsel for the appellant that the impugned amounts are merely old balances as well as the fact that they included items like car or bank charges, financial charges, etc. To the extent the order of lower authorities on this issue stands set aside. The Ld. AO shall give opportunities of being heard to the assessee and it shall be bounden upon the assessee to comply with the notices issued by the Ld. AO. Any non- compliance on the part of the assessee can be adversely viewed. The assessee is at liberty to produce all the evidences in support of its claims before the Ld. AO during the verification proceedings. The ground of appeal raised by the assessee are therefore allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 10th December, 2025. Sd/- Sd/- [ANUBHAV SHARMA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:. 10.12.2025 Printed from counselvise.com ITA No.3153/Del/2025 Page | 5 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "