ALPESH NAVINCHANDRA GOSALIA ,MUMBAI V. ACIT CIRCLE 27(1), MUMBAI

ITA 4128/MUM/2025

AI Insights

The case involves Alpesh Navinchandra Gosalia, the appellant, contesting the disallowances made by the Assessing Officer under Section 14A and Section 57(iii) of the Income Tax Act, 1961, for the assessment year 2012-13. The primary issues were the disallowance of expenses related to exempt income and the disallowance of deductions claimed against other income. The Tribunal considered the applicability of Rule 8D in the context of the assessee's own funds and the nature of the investments yielding exempt income. The Tribunal also addressed the disallowance of expenses claimed under 'income from other sources', which included interest on loans and other business expenses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713318 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2012-2013
• Other Referred Cases: CIT v. Reliance Utilities and Power Ltd., CIT v. HDFC Bank Ltd., Asstt. CIT v. Vireet Investment (P.) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ADITYA M. RAI
• Assessee Lawyers: ADITYA RAMACHANDRAN
• Keywords: Set aside; Depreciation; Sale consideration of property below Jantri Value; Rule 8D
• Section: 143(3); 14A; 50C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 4128/MUM/2025 Assessment Year: 2012-13 Alpesh Navinchandra Gosalia, G-202, Kukreja Palace, Vallabh, Baug Lane, Rajawadi Mumbai-400077. Vs. ACIT, Circle 27(1), IT-office, Vashi Railway Station Building Navi Mumbai-400703. PAN NO. AGBPG 9487 G Appellant Respondent Assessee by : Mr. Aditya Ramachandran Revenue by : Mr. Aditya M. Rai, Sr. DR Date of Hearing : 29/07/2025 Date of pronouncement : 31/07/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 27.05.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 1, Visakhapatnam [hereinafter shall be referred as ‘Ld. CIT(A)’] for assessment year 2012-13, raising following grounds: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance of expenses of ₹6,12,255/- u/s 14(A) r.w. Rule 8D. Printed from counselvise.com 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance of several expenses aggregating to 2. Briefly stated, facts of the case are that the assessee filed return of income on 28.07.2012 declaring total income at Rs.49,11,498/-. The return of income filed the assessee was selected for scrutiny and statutory notices under the Income Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment completed u/s 143(3) of the Act on 27.03.2015, t Assessing Officer made disallowance u/s 14A of the Act amounting to Rs.6,12,255/- ; addition u/s 50C amounting to Rs.6,74,000/ and disallowance of deduction claimed u/s 57 amounting to Rs.5,55,895/ sustained the addition in respect of disallowance made u/s 14A of the Act and disallowance made u/s 57(iii) of the Act. Aggrieved, the assessee is in appeal reproduced above. 3. We have heard rival submissions of the parties and perused the relevant materials on record containing pages 1 to 10 filed by the assessee No. 1 of the appeal, the Ld. Counsel for the assessee submitted that assessee had shown exempted income assessment proceedings offered for expenditure of Rs.609/ of the assessee and invoked Rule 8D of the Income Alpesh Navinchandra ITA No. 4128/MUM/2025 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance of several expenses aggregating to ₹5,51,895/- which were claimed u/s 57(iii). , facts of the case are that the assessee filed return of income on 28.07.2012 declaring total income at . The return of income filed the assessee was selected for scrutiny and statutory notices under the Income ‘the Act’) were issued and complied with. In the nt completed u/s 143(3) of the Act on 27.03.2015, t Assessing Officer made disallowance u/s 14A of the Act amounting addition u/s 50C amounting to Rs.6,74,000/ of deduction claimed u/s 57(iii) amounting to Rs.5,55,895/-. On further appeal, the Ld. CIT(A) sustained the addition in respect of disallowance made u/s 14A of the Act and disallowance made u/s 57(iii) of the Act. Aggrieved, the appeal before us by way of grounds raised a We have heard rival submissions of the parties and perused the relevant materials on record including the paper book containing pages 1 to 10 filed by the assessee. In relation to ground No. 1 of the appeal, the Ld. Counsel for the assessee submitted that assessee had shown exempted income at Rs.75,000/ assessment proceedings offered for suo-motu disallowance of Rs.609/- but the Assessing Officer rejected the claim of the assessee and invoked Rule 8D of the Income- Alpesh Navinchandra Gosalia 2 ITA No. 4128/MUM/2025 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance of several expenses 57(iii). , facts of the case are that the assessee filed return of income on 28.07.2012 declaring total income at . The return of income filed the assessee was selected for scrutiny and statutory notices under the Income-tax ‘the Act’) were issued and complied with. In the nt completed u/s 143(3) of the Act on 27.03.2015, the Assessing Officer made disallowance u/s 14A of the Act amounting addition u/s 50C amounting to Rs.6,74,000/- (iii) of the Act . On further appeal, the Ld. CIT(A) sustained the addition in respect of disallowance made u/s 14A of the Act and disallowance made u/s 57(iii) of the Act. Aggrieved, the before us by way of grounds raised as We have heard rival submissions of the parties and perused including the paper book n relation to ground No. 1 of the appeal, the Ld. Counsel for the assessee submitted that Rs.75,000/- and during disallowance of icer rejected the claim -tax Rules, 1962 Printed from counselvise.com (in short ‘the Rules’) and computed disallowance of which comprise of disallowance under Rule 8D(2)(ii) of the Rules for indirect expenses of the int disallowance under Rule 8D(2)(iii) of the Rules for the average value of the investment amounting to Rs.88,640/ Ld. Counsel for the assessee before us, submitted that assessee was having sufficient own fund and therefore, Rule8D(2)(ii) of the Rules was not justified assessee filed copy of the balance sheet to substantiate own funds and relied on the decision in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 178 Taxman 135 (Bombay) and CIT v. HDFC Bank Ltd. [2014] 49 taxmann.com 335 (Bombay). Further regarding the disallowance under Rule 8D(2)(iii) for the assessee submitted that in view of the decision of the Spe Bench in the case of Ltd. [2017] 82 taxmann.com 415/165 ITD 27 (Delhi (SB), the average investment should be restricted to the investment which had yielded dividend consideration. Before us, the ld. Counsel for the assessee has filed a calculation indicating average value of the investment Rs.18,600, which yielded dividend income. The Ld. Counsel for the assessee has filed a disallowan by the assessee which is reproduced as under: ALPESH GO SALIA A.Y. 2012 Alpesh Navinchandra ITA No. 4128/MUM/2025 (in short ‘the Rules’) and computed disallowance of Rs disallowance under Rule 8D(2)(ii) of the Rules for indirect expenses of the interest amounting to Rs.5,21,602/ disallowance under Rule 8D(2)(iii) of the Rules for 0.5 percentile of the average value of the investment amounting to Rs.88,640/ Ld. Counsel for the assessee before us, submitted that assessee was nt own fund and therefore, disallowance under ) of the Rules was not justified. In support thereof assessee filed copy of the balance sheet to substantiate own funds and relied on the decision in the case of CIT v. Reliance Utilities and ower Ltd. (2009) 178 Taxman 135 (Bombay) and CIT v. HDFC Bank Ltd. [2014] 49 taxmann.com 335 (Bombay). Further regarding the disallowance under Rule 8D(2)(iii) of the Rules, for the assessee submitted that in view of the decision of the Spe Bench in the case of Asstt. CIT v. Vireet Investment (P.) [2017] 82 taxmann.com 415/165 ITD 27 (Delhi the average investment should be restricted to the investment which had yielded dividend income during the year under consideration. Before us, the ld. Counsel for the assessee has filed a calculation indicating average value of the investment which yielded dividend income. The Ld. Counsel for the assessee has filed a disallowance chart under Rule 8D(2) computed by the assessee which is reproduced as under: ALPESH GO SALIA A.Y. 2012-2013 Alpesh Navinchandra Gosalia 3 ITA No. 4128/MUM/2025 Rs.6,12,255/-. , disallowance under Rule 8D(2)(ii) of the Rules for erest amounting to Rs.5,21,602/- and 0.5 percentile of the average value of the investment amounting to Rs.88,640/-. The Ld. Counsel for the assessee before us, submitted that assessee was disallowance under n support thereof, the assessee filed copy of the balance sheet to substantiate own funds and relied on the decision in the case of CIT v. Reliance Utilities and ower Ltd. (2009) 178 Taxman 135 (Bombay) and CIT v. HDFC Bank Ltd. [2014] 49 taxmann.com 335 (Bombay). Further regarding of the Rules, the Ld. Counsel for the assessee submitted that in view of the decision of the Special Vireet Investment (P.) [2017] 82 taxmann.com 415/165 ITD 27 (Delhi - Trib.) the average investment should be restricted to the investment income during the year under consideration. Before us, the ld. Counsel for the assessee has filed a calculation indicating average value of the investment of which yielded dividend income. The Ld. Counsel for the under Rule 8D(2) computed Printed from counselvise.com WORKING OF DISALLOWANCE U/S 14A OF THE I.T.ACT 1961 AS PER RULE 8D 8D (2)(i) Expenditure Directly relating to income which does not form part of total income 8D (2)(ii) Interest expenditure whichmis not directly attributable to any particular income or receipt A=Interest Expenses B=Average value of Investment (income from which 8D (2)(iii) 0.5% of Average Investments (18600*0.5%) Dissallowance U/s 14A Note: Average Value of Investment Opening value of investment Closing value of investment Average Value of Investment investment 4. The Ld. Departmental Representative (DR) on the other hand, submitted that once the Assessing Officer is dissatisfied with the claim of the assessee invoking Rule 8D is mandatory and Assessing Officer has no option otherwise then to follow the Rule 8D. 5. We have heard rival submissions of the parties and perused the relevant materials on record Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra) and decision in the case of HDFC Bank Ltd. (supra), it is undisputed that the own fund of the as covere the investment in the assets capable of earning exempte income, then no disallowance for interest invoking Rule 8D Alpesh Navinchandra ITA No. 4128/MUM/2025 WORKING OF DISALLOWANCE U/S 14A OF THE I.T.ACT 1961 AS PER Expenditure Directly relating to income which does not of total income Interest expenditure whichmis not directly attributable to any particular income or receipt A=Interest B=Average value of Investment (income from which Rs. 1582506 Rs. 18600 Rs.57087697 0.5% of Average Investments (18600*0.5%) Dissallowance U/s 14A of the I.T Act Average Value of Investment Opening value of investment Rs 18600 Closing value of investment Rs 18600 Average Value of Investment Opening value of investment + Closing The Ld. Departmental Representative (DR) on the other hand, submitted that once the Assessing Officer is dissatisfied with the im of the assessee invoking Rule 8D is mandatory and Assessing Officer has no option otherwise then to follow the Rule 8D. We have heard rival submissions of the parties and perused the relevant materials on record. As far as decision of the Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra) and decision in the case of HDFC Bank Ltd. (supra), it is undisputed that the own fund of the assessee are sufficient to the investment in the assets capable of earning exempte then no disallowance for interest invoking Rule 8D Alpesh Navinchandra Gosalia 4 ITA No. 4128/MUM/2025 WORKING OF DISALLOWANCE U/S 14A OF THE I.T.ACT 1961 AS PER - 516 93 609 ing value of investment + Closing value of The Ld. Departmental Representative (DR) on the other hand, submitted that once the Assessing Officer is dissatisfied with the im of the assessee invoking Rule 8D is mandatory and Assessing Officer has no option otherwise then to follow the Rule 8D. We have heard rival submissions of the parties and perused . As far as decision of the Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra) and decision in the case of HDFC Bank Ltd. (supra), it is sessee are sufficient to the investment in the assets capable of earning exempted then no disallowance for interest invoking Rule 8D(2)(ii) is Printed from counselvise.com warranted. The relevant finding of the Hon’ble High Court case of Reliance Utilities & Power Ltd. (supra) is reproduced as under: “8. We have heard learned counsel for both the p opinion the very basis on which the revenue had sought to contend or argue their case that the shareholder funds to the tune of over Rs. 172 crores was utilised for the purpose of fixed assets in terms of the balance sheet as on 31st March, 1999, is fallacious. Firstly, we are not concerned with the balance sheet as of 31 be balance sheet as on 31 learned counsel has been unable to point out to us from the balance sheet that th that the shareholders funds were utilized for the purpose of fixed assets. To our mind the profit and loss account and the balance sheet would not show whether shareholders funds have been utilised for investments. Th rejected on this count also. 9. Apart from that we have noted earlier that both in the order of the CIT (Appeals) as also the Appellate Tribunal, a clear finding is recorded that the assessee had interest of its own which ha commencing from 1 balance sheet there was a further availability of Rs. 398.19 crores including Rs. 180 crores of share capital. In this context, in our opinion, the finding (Appeals) and ITAT as to availability of interest really cannot be faulted. 10. If there be interest sufficient to meet its investments and at the same time the assessee had raised a l investments were from the interest opinion the Supreme Court in East India Pharmaceutical Works Ltd.'s case (supra) had the occasion to consider the decision of the Calcutta High Court in Woolcom Ltd.'s case (supra) where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the Alpesh Navinchandra ITA No. 4128/MUM/2025 warranted. The relevant finding of the Hon’ble High Court case of Reliance Utilities & Power Ltd. (supra) is reproduced as We have heard learned counsel for both the p opinion the very basis on which the revenue had sought to contend or argue their case that the shareholder funds to the tune of over Rs. 172 crores was utilised for the purpose of fixed assets in terms of the balance sheet as on 31st March, 1999, is fallacious. Firstly, we are not concerned with the balance sheet as of 31-3-1999. What would be relevant would be balance sheet as on 31-3-2000. Apart from that, the learned counsel has been unable to point out to us from the balance sheet that the balance sheet as on 31-3-1999 showed that the shareholders funds were utilized for the purpose of fixed assets. To our mind the profit and loss account and the balance sheet would not show whether shareholders funds have been utilised for investments. The argument has to be rejected on this count also. 9. Apart from that we have noted earlier that both in the order of the CIT (Appeals) as also the Appellate Tribunal, a clear finding is recorded that the assessee had interest of its own which had been generated in the course of the year commencing from 1-4-1999. Apart from that in terms of the balance sheet there was a further availability of Rs. 398.19 crores including Rs. 180 crores of share capital. In this context, in our opinion, the finding of fact recorded by CIT (Appeals) and ITAT as to availability of interest really cannot be faulted. 10. If there be interest-free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion the Supreme Court in East India Pharmaceutical Works Ltd.'s case (supra) had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd.'s case (supra) where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the Alpesh Navinchandra Gosalia 5 ITA No. 4128/MUM/2025 warranted. The relevant finding of the Hon’ble High Court in the case of Reliance Utilities & Power Ltd. (supra) is reproduced as We have heard learned counsel for both the parties. In our opinion the very basis on which the revenue had sought to contend or argue their case that the shareholder funds to the tune of over Rs. 172 crores was utilised for the purpose of fixed assets in terms of the balance sheet as on 31st March, 1999, is fallacious. Firstly, we are not concerned with the 1999. What would be relevant would 2000. Apart from that, the learned counsel has been unable to point out to us from the 1999 showed that the shareholders funds were utilized for the purpose of fixed assets. To our mind the profit and loss account and the balance sheet would not show whether shareholders funds e argument has to be 9. Apart from that we have noted earlier that both in the order of the CIT (Appeals) as also the Appellate Tribunal, a clear finding is recorded that the assessee had interest-free funds d been generated in the course of the year 1999. Apart from that in terms of the balance sheet there was a further availability of Rs. 398.19 crores including Rs. 180 crores of share capital. In this of fact recorded by CIT (Appeals) and ITAT as to availability of interest-free funds free funds available to an assessee sufficient to meet its investments and at the same time the oan it can be presumed that the free funds available. In our opinion the Supreme Court in East India Pharmaceutical Works Ltd.'s case (supra) had the occasion to consider the bers of India Ltd.'s case (supra) where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the Printed from counselvise.com overdraft account for the running of the business and in these circumstances the appellant was entitled to claim the deductions. The Supreme Court noted that the argument had considerable force, but considering the fact that the contention had not been adva answered. It then noted that in Woolcombers of India Ltd.'s case (supra) the Calcutta High Court had come to the conclusion that the profits were sufficient to meet the advance tax liability and the profits were deposi account of the assessee and in such a case it should be presumed that the taxes were paid out of the profits of the year and not out of the overdraft account for the running of the business. It noted that to raise the presumption, ther sufficient material and the assessee had urged the contention before the High Court. The principle therefore would be that if there are funds available both interest and/or loans taken, then a presumption would arise that investments would be out of the interest or available with the company, if the interest sufficient to meet the investments. In this case this presumption is established considering the finding of fact both by the CIT (Appeals) an 5.1 We further note that as far as disallowance of administrative expenses under Rule 8D the Tribunal in the case of Vireet Investment Pvt. Ltd. (supra) held that while working out disallowance under Rule 8D the average value of investment should be restricted to the investment which has yielded exempted income. In view o Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra) and decision of the Special Bench in the case of Vireet Investment Pvt. Ltd this matter back to the file of the Ld. Assessing Officer for computing the disallowance under Rule 8D in the light of the ratio Alpesh Navinchandra ITA No. 4128/MUM/2025 verdraft account for the running of the business and in these circumstances the appellant was entitled to claim the deductions. The Supreme Court noted that the argument had considerable force, but considering the fact that the contention had not been advanced earlier it did not require to be answered. It then noted that in Woolcombers of India Ltd.'s case (supra) the Calcutta High Court had come to the conclusion that the profits were sufficient to meet the advance tax liability and the profits were deposited in the overdraft account of the assessee and in such a case it should be presumed that the taxes were paid out of the profits of the year and not out of the overdraft account for the running of the business. It noted that to raise the presumption, ther sufficient material and the assessee had urged the contention before the High Court. The principle therefore would be that if there are funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that ts would be out of the interest-free fund generated or available with the company, if the interest-free funds were sufficient to meet the investments. In this case this presumption is established considering the finding of fact both by the CIT (Appeals) and ITAT.” We further note that as far as disallowance of administrative expenses under Rule 8D(2)(iii) is concerned the special Bench of the Tribunal in the case of Vireet Investment Pvt. Ltd. (supra) held that while working out disallowance under Rule 8D the average value of investment should be restricted to the investment which has yielded exempted income. In view of ratio of the decision of the Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra) and decision of the Special Bench in the case of Vireet Investment Pvt. Ltd (supra), we feel it appropriate to restore this matter back to the file of the Ld. Assessing Officer for computing the disallowance under Rule 8D in the light of the ratio Alpesh Navinchandra Gosalia 6 ITA No. 4128/MUM/2025 verdraft account for the running of the business and in these circumstances the appellant was entitled to claim the deductions. The Supreme Court noted that the argument had considerable force, but considering the fact that the contention nced earlier it did not require to be answered. It then noted that in Woolcombers of India Ltd.'s case (supra) the Calcutta High Court had come to the conclusion that the profits were sufficient to meet the advance ted in the overdraft account of the assessee and in such a case it should be presumed that the taxes were paid out of the profits of the year and not out of the overdraft account for the running of the business. It noted that to raise the presumption, there was sufficient material and the assessee had urged the contention before the High Court. The principle therefore would be that if free and overdraft and/or loans taken, then a presumption would arise that free fund generated free funds were sufficient to meet the investments. In this case this presumption is established considering the finding of fact both We further note that as far as disallowance of administrative the special Bench of the Tribunal in the case of Vireet Investment Pvt. Ltd. (supra) held that while working out disallowance under Rule 8D the average value of investment should be restricted to the investment which f ratio of the decision of the Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra) and decision of the Special Bench in the case of feel it appropriate to restore this matter back to the file of the Ld. Assessing Officer for computing the disallowance under Rule 8D in the light of the ratio Printed from counselvise.com of the decisions cited above. The ground No. 1 of the appeal of the assessee is accordingly all 6. In ground No. 2, the assessee is aggrieved with the disallowance of Rs.5,55,895/ of the claim of deduction against the other income. Before us, the Ld. Counsel for the assessee ref from other sources’ the assessee to Rs.23,02,500/- Rs.19,10,270/- resulting into income of Rs.3,92,230/ mainly include commission income o income of Rs.13,58,375/ expenses of Rs.19,10,270/ charges (Rs.20,000), convenience expenses (Rs.92,382/ charges (Rs.2013/-), depreciation (Rs.1 (Rs.19,303/-), interest on loan (Rs.15,82,506/ (Rs.20,708/-) and telephone expenses (Rs.38,938/ Assessing Officer asked the assessee to justify whether those expenses were incurred wholly and excl earning of such income under the head ‘income from other sources’ he particularly asked about the interest on loan amounting to Rs.15,82,506/- as to earning interest income under the but no co-relation between interest paid and interest earned provided to the Assessing Officer by the assessee and therefore, the Alpesh Navinchandra ITA No. 4128/MUM/2025 of the decisions cited above. The ground No. 1 of the appeal of the assessee is accordingly allowed for statistical purposes. In ground No. 2, the assessee is aggrieved with the disallowance of Rs.5,55,895/- u/s 57(iii) of the Act for disallowance of the claim of deduction against the other income. Before us, the Ld. Counsel for the assessee referred that under the head ‘income from other sources’ the assessee had shown the receipt amounting and against which claimed expenses of resulting into income of Rs.3,92,230/ mainly include commission income of Rs.9,34,800/ income of Rs.13,58,375/- against which the assessee has claimed expenses of Rs.19,10,270/- which comprises of accounts writing charges (Rs.20,000), convenience expenses (Rs.92,382/ ), depreciation (Rs.1,32,420/-), professional fee ), interest on loan (Rs.15,82,506/-, car insurance ) and telephone expenses (Rs.38,938/- Assessing Officer asked the assessee to justify whether those expenses were incurred wholly and exclusively for the purpose of earning of such income under the head ‘income from other sources’ particularly asked about the interest on loan amounting to as to whether same was incurred for the purpose of earning interest income under the head ‘income from other sources’ between interest paid and interest earned provided to the Assessing Officer by the assessee and therefore, the Alpesh Navinchandra Gosalia 7 ITA No. 4128/MUM/2025 of the decisions cited above. The ground No. 1 of the appeal of the owed for statistical purposes. In ground No. 2, the assessee is aggrieved with the u/s 57(iii) of the Act for disallowance of the claim of deduction against the other income. Before us, the erred that under the head ‘income shown the receipt amounting and against which claimed expenses of resulting into income of Rs.3,92,230/-. The receipt f Rs.9,34,800/- and interest against which the assessee has claimed which comprises of accounts writing charges (Rs.20,000), convenience expenses (Rs.92,382/-) Bank ), professional fee , car insurance -) . Though the Assessing Officer asked the assessee to justify whether those usively for the purpose of earning of such income under the head ‘income from other sources’, particularly asked about the interest on loan amounting to whether same was incurred for the purpose of head ‘income from other sources’ between interest paid and interest earned was provided to the Assessing Officer by the assessee and therefore, the Printed from counselvise.com Assessing Officer made disallowance out of entire expenses to the extent of Rs.5,51,895/ submitted that assessee is willing to file detail of the parties from whom loan were taken and interest was paid and where were applied as to whether for earning the interest income or for any other business or investment purpose. The assessee also submitted that he will co receipt shown under the head ‘income from other sources’. In view of facts and circumstances of the case and in the interest of substantial justice, we feel it appropriate to provide one more opportunity to the assessee to justify claim of the expenses incurred. Accordingly the order of the Ld. CIT(A) on the issue in dispute is set aside and matter is restored back to the Assessing Officer for deciding afresh in view of our direction above. ground No. 2 of the appeal of the assessee is accordingly allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 31/07/2025 Rahul Sharma, Sr. P.S. Alpesh Navinchandra ITA No. 4128/MUM/2025 Assessing Officer made disallowance out of entire expenses to the extent of Rs.5,51,895/-. Before us, the Ld. Counsel for the assessee submitted that assessee is willing to file detail of the parties from whom loan were taken and interest was paid and where whether for earning the interest income or for business or investment purpose. The assessee also submitted that he will co-relate the expenses incurred receipt shown under the head ‘income from other sources’. In view of facts and circumstances of the case and in the interest of l justice, we feel it appropriate to provide one more opportunity to the assessee to justify claim of the expenses ccordingly the order of the Ld. CIT(A) on the issue in dispute is set aside and matter is restored back to the Assessing or deciding afresh in view of our direction above. ground No. 2 of the appeal of the assessee is accordingly allowed for In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 31/07/2025. Sd/ (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Alpesh Navinchandra Gosalia 8 ITA No. 4128/MUM/2025 Assessing Officer made disallowance out of entire expenses to the . Before us, the Ld. Counsel for the assessee submitted that assessee is willing to file detail of the parties from whom loan were taken and interest was paid and where those loans whether for earning the interest income or for business or investment purpose. The assessee also incurred against the receipt shown under the head ‘income from other sources’. In view of facts and circumstances of the case and in the interest of l justice, we feel it appropriate to provide one more opportunity to the assessee to justify claim of the expenses ccordingly the order of the Ld. CIT(A) on the issue in dispute is set aside and matter is restored back to the Assessing or deciding afresh in view of our direction above. The ground No. 2 of the appeal of the assessee is accordingly allowed for In the result, the appeal of the assessee is allowed for /07/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Alpesh Navinchandra ITA No. 4128/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Alpesh Navinchandra Gosalia 9 ITA No. 4128/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "