SATNAM SINGH AHUJA,MUMBAI V. ITO WARD 19(3)(1), MUMBAI

ITA 3134/MUM/2025

AI Insights

The case involves Satnam Singh Ahuja, the appellant, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, pertaining to the assessment year 2014-15. The primary grievance was the disallowance of interest amounting to Rs. 57,70,966 by the AO, which was confirmed by the CIT(A). The AO had disallowed the interest on the grounds that the borrowed funds were used for non-business purposes, including giving interest-free loans and advances. The CIT(A) dismissed the appeal due to the absence of documentary evidence from the assessee, who failed to respond to multiple opportunities provided for representation. The ITAT, considering the health issues of the assessee that prevented his appearance, decided to remand the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652988 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA KAUSHIK; DR
• Assessee Lawyers: NITESH P. SHAH; AR
• Keywords: Opportunity of being heard

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 3134/Mum/2025 Assessment Year: 2014-15 Satnam Singh Ahuja Flat No. C-12 C- Wing Siddharth Building Nepeansea Road Mumbai - 400036 [PAN: AADPA5016H] Vs ITO, Ward -19(3)(1), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Nitesh P. Shah, A/R Revenue by : Ms. Kavita Kaushik, Sr. D/R सुनवाई की तारीख/Date of Hearing : 16/06/2025 घोषणा की तारीख /Date of Pronouncement: 18/06/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dt. 07/03/2025 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2014-15. 2. The grievance of the assessee reads as under:- “1. The Ld. AO and the Hon. CIT(A) ought to have appreciated the fact that the Appellant could not represent his case due to circumstances beyond his control. 2. The Ld. AO erred in disallowing and the Hon. CIT(A) erred in confirming the disallowance of interest of Rs.57,70,966/- without appreciating the facts and circumstances of the case. “ I.T.A. No. 3134/Mum/2025 2 3. Briefly stated the facts of the case are that the assessee filed its return of income on 28/11/2014 declaring total income at Rs. 7,86,940/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings the AO noticed that the assessee has debited Rs. 1,05,05,199/- on account of interest on loans. The assessee was asked to justify it claim of interest expenses. In reply, the assessee furnished statement of utilization of borrowed funds which is as under:- Liabilities Amt. (Rs.) Assets Amt. (Rs.) Capital 4,82,877 Fixed assets 65,63,231 Loans (including car loan) 8,62,19,555 Investments (including investments in shares) 3,36,51,558 Current liabilities (including loan from bank) 6,18,016 Current assets (including loans & advances, sundry debtors) 4,71,05,660 Total 8,73,20,450 8,73,20,450 5. On perusal of the aforementioned details, the AO formed a belief that the assessee has utilized the borrowed funds for non-business purposes also. The AO observed that the assessee has not filed any documentary evidence in respect of source of acquisition of assets/investment. The AO further noticed that the assessee has given loans and advances of Rs. 85,50,654/- and came to the conclusion that the borrowed interest bearing funds have been diverted for giving interest free loans and advances. The AO accordingly computed the borrowed interest and disallowed Rs. 57,70,966/-. I.T.A. No. 3134/Mum/2025 3 5.1. The assessee carried the matter before the ld. CIT(A). The ld. CIT(A) gave four opportunities to the assessee but received no response. The ld. CIT(A) dismissed the appeal of the assessee for want of documentary evidence. 6. Before us, the ld. Counsel for the assessee pleaded that due to health reasons, the assessee could not attend the appellate proceedings and prayed for one more opportunity to file necessary details/evidence. 7. We have carefully considered the contentions of the assessee. We are of the considered view that in the interest of justice and fairplay, the assessee should get a second opportunity. We accordingly restore the issues to the file of the AO. The assessee is directed to furnish all the necessary details along with documentary evidence to substantiate its claim of interest on borrowed funds and the AO is directed to decide the issues afresh after affording reasonable and adequate opportunity of being heard to the assessee. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 18th June, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 18/06/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs I.T.A. No. 3134/Mum/2025 4 आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014 थ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "