GUNMALA DEVI JAIN,KOLKATA V. D.C.I.T., CIRCLE - 29, KOLKATA

ITA 14/KOL/2025

AI Insights

The case involves Gunmala Devi Jain, the appellant, who contested the order of the CIT(A) which confirmed the disallowance of a deduction of Rs.31,79,732 claimed under section 57(iii) of the Income-tax Act, 1961. The deduction was related to expenses incurred for earning an income of Rs.55,56,751. The Assessing Officer and CIT(A) had both found that the assessee failed to establish a direct nexus between the income and the expenditure claimed. The Tribunal, after considering the submissions and the legislative intent of section 57(iii), decided to remit the matter back to the Assessing Officer for a fresh assessment, allowing the submission of additional documentary evidence by the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830915 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 03-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 54

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.14/Kol/2025 Assessment Year: 2015-16 Gunmala Devi Jain…..……..……..……….………….……….……….……Appellant 401, Wing-B, Windsor Palace, 6A Iron Side Road, Ballygunge, Kol-700019.. [PAN: ACRPJ8161E] vs. DCIT, Circle-29, Kolkata……………………………..…….....……...…..…..Respondent Appearances by: Shri Miraj D Shah, AR appeared on behalf of the appellant. Shri Sandeep Kr. Mehta, Addl. CIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : January 06, 2026 Date of pronouncing the order : January 19, 2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 30.05.2024 of the NFAC, Delhi (hereinafter referred to as the “CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2015–16. 2. The appeal has been filed by the assessee with a delay of 156 days and the Assessee has filed a petition for condonation of the delay. After going over the said petition, we find sufficient reasons behind the delay which are beyond the control of the assessee and consequently, the delay in filing the appeal is hereby condoned and we proceed to dispose of the appeal on merits. 3. Brief facts of the case are that the assessee has filed its return of income for A.Y. 2015-16 declaring a total income of Rs. 23,35,690/-. The case was selected for Limited scrutiny under CASS and the assessment Printed from counselvise.com ITA No.14/Kol/2025 Gunmala Devi Jain 2 was competed u/s 143(3) of the Act at the income of Rs. 57,00,270/- after making addition of Rs. 31,78,552/- u/s 57 (iii) of the Act. 3. Aggrieved by the above order, the assessee filed appeal before the ld. CIT(A) wherein the ld. CIT(A) dismissed the appeal of the assessee. 4. Aggrieved and dissatisfied, the assessee is in appeal before us challenging the very impugned order thereby submitting that the ld. CIT(A) erred in confirming the disallowance of the deduction of Rs.31,79,732/- claimed u/s 57 of the Act as the deduction was incurred for earning an income of Rs.55,56,751/- and has been added back to the total income of the assessee. The ld. AR vehemently submitted that the deduction of Rs.31,79,732/- claimed by the assessee u/s 54 is not earning for Rs.55,56,751/-. He has drawn the attention of the Tribunal regarding the provisions of section 57(iii) of the Act and submitted that the legislative intent is to disallow the expenditure which are not wholly or exclusively expended for the purpose of making or earning income and the Assessing Officer did not consider the facts and disallowed the expenditure incurred. The ld. AR further submits that the ld. CIT(A) has dismissed the appeal of the assessee by giving finding that assessee has failed to prove the nexus and trail of funds taken as loan and advancement of the same funds for the purpose of earning the income. The ld. AR submitted that the assessee is ready to submit documentary evidence which will establish the nexus and trail of funds taken as loan and advancement of the same funds for the purpose of earning the income. His prayer is that the matter be remitted back to the jurisdictional Assessing Officer to consider the same afresh with permission to the assessee to submit the documentary evidences. 5. Contrary to that, the ld. DR supports the impugned order. Printed from counselvise.com ITA No.14/Kol/2025 Gunmala Devi Jain 3 6. We have considered the submissions of the counsels of the respective parties and perused the material available on record. We find that the assessee filed return of income declaring total income of Rs.23,35,690/- and the case of the assessee was selected for limited scrutiny. We further find that the Assessing Officer in his assessment order has held that there should a direct nexus between income and expenditure which the assessee failed to establish by producing account and bank statement, hence it is established that loans were taken from various parties which were used for the deduction u/s 57(iii) of the Act as claimed. The ld. CIT(A) has also in its order has held that the assessee has failed to establish the nexus and trail of the funds taken as loan and advances of the same funds for the purpose of earning the income. Before us, the ld. AR submits that the assessee is ready to file documents before the jurisdictional Assessing Officer that will establish the nexus and trail of the funds taken as loan and advances of the same funds for the purpose of earning the income and his prayer is that the matter be remitted back for re-verification. Keeping in view the submission made by the assessee and going over the orders of the lower authorities, we remit the matter back before the jurisdictional Assessing Officer to pass a fresh order with a permission to the assessee to file documentary evidences considering the legislative intent behind the provisions of section 57(iii) of the Act. 6.1 In view of the above discussion, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 19th January, 2026. Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 19.01.2026. RS Printed from counselvise.com ITA No.14/Kol/2025 Gunmala Devi Jain 4 Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "