LAKHAANI INTERNATIONAL,FARIDABAD V. DCIT, CIRCLE -1, FARIDABAD, FARIDABAD

ITA 1782/DEL/2025

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Lakhani International, a partnership firm engaged in manufacturing, did not file its income tax return for the Assessment Year 2014-15, claiming no taxable income and reporting a business loss. However, the firm earned interest income of Rs.26,55,530 during the financial year 2013-14, which led to a reopening of the case under section 147 of the Income Tax Act, 1961. The Assessing Officer added this interest income to the assessee's income for the year, despite the reported business loss. The Commissioner of Income Tax (Appeals) upheld this addition, noting the absence of a timely filed return which would have allowed the set-off of business losses against the interest income. The Tribunal agreed with the lower authorities on the addition of interest income but remanded the issue of TDS credit back to the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778254 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 24-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR
• Assessee Lawyers: ADITI GUPTA; ABDULLAH MUSTAQUEEM
• Keywords: TDS
• Section: 147; 148; 144; 139

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.1782/िदʟी/2025 (िन.व. 2014-15) ITA No.1782/DEL/2025 (A.Y. 2014-15) Lakhani International, Sector-24, Plot No. 130, Faridabad Sec-22, S.O Faridabad, Haryana 121005 ...... अपीलाथᱮ/Appellant PAN: AABFL-6056-A बनाम Vs. Deputy Commissioner of Income Tax, Circle-1, CGO Complex, New Industrial Township 4, Faridabad, Haryana 121001 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/Appellant by : Ms. Aditi Gupta, & Shri Abdullah Mustaqueem Advocates ŮितवादीȪारा/Respondent by : Shri Manoj Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 15/07/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 10/10/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)] dated 04.02.2025, for Assessment Year 2014-15. 2. Ms. Aditi Gupta, appearing on behalf of the assessee submits that the assessee a partnership firm engaged in manufacturing of corrugated and inner boxes. Admittedly, the assessee has not filed its return of income for A.Y. 2014– 15, as the assessee had no taxable income. In fact the assessee had business loss of Rs.1,42,05,768. Based on information available with the Department, that the Printed from counselvise.com 2 ITA No.1782/Del/2025 (AY 2014-15) assessee has earned interest income of Rs.26,55,530/- during F.Y. 2013–14, the case was reopened u/s.147 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’). Notice u/s.148 of the Act was issued on 27.03.2021. The Assessing Officer (AO) completed the assessment u/s 147 r.w.s. 144 and 144B of the Act, adding interest income of Rs.26,55,530/- under the head, “Income from Other Sources”. Against the said assessment order, the assessee filed an appeal before the CIT(A), contending that the interest income was already credited in the Profit & Loss account and that the AO failed to consider the Audited Financials of the assessee. After credit of the interest in P & L account, there is net loss of Rs.1,35,82,533.64/-. The CIT(A) acknowledged that the interest income was part of the P&L account and that the assessee had incurred a net loss. However, the CIT(A) held that since no return was filed within the due date, the set-off of business loss against interest income u/s. 71 of the Act was not allowable. 3. Shri Manoj Kumar, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submitted that for claiming set off of business losses u/s. 71 of the Act, the assessee should have filed return of income u/s.139(1) of the Act. 4. Both sides heard, orders of the authorities below examined. The grievance of assessee in present appeal is against the addition of Rs.26,55,530/- in respect of interest income received during the relevant period. It is an undisputed fact that no return of income was filed by the assessee u/s. 139 of the Act or even in response to notice issued u/s. 148 of the Act for the impugned assessment year. The assessee is a partnership firm, there is no immunity to the assessee from filing income tax return in the case of business loss. Though, financials results of the assessee indicate that during the relevant period the assessee has suffered Printed from counselvise.com 3 ITA No.1782/Del/2025 (AY 2014-15) business loss but the accounts of assessee were not subjected to verification in the absence of any return of income. Therefore, we find no infirmity in the impugned order. Hence, the same is upheld. Consequently, ground no. 1 to 3 of appeal are dismissed. 5. In ground no. 4 of appeal, the assessee has claimed that benefit of TDS Rs.2,55,553/- deducted on interest income of Rs.26,55,530/- was not allowed by the AO. The ground no. 4 of appeal is restored to the AO to examine the fact if TDS credit is not already allowed, the same be allowed to the assessee in accordance with law. 6. Ground no. 5, 6 and 7 of appeal are general in nature. Hence require no separate adjudication. 7. In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on Friday the 10th day of October, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 10/10/2025 NV/- ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. Printed from counselvise.com 4 ITA No.1782/Del/2025 (AY 2014-15) BY ORDER, //True Copy// (Asstt. Registrar) ITAT, DELHI Printed from counselvise.com "