SHREE HATKESHWARA TRANSLINES,PUNE V. ASS COMMISSIONER, INCOME TAX DEPARTMENT PUNE

ITA 2284/PUN/2025

AI Insights

The case involves Shree Hatkeshwara Translines, a private limited company, appealing against the order of the ACIT, Circle-5, Pune, concerning the assessment year 2018-19. The primary contention revolves around the treatment of interest on loans used for acquiring fixed assets, which the assessee capitalized and claimed depreciation on, instead of expensing it in the year incurred. The Tribunal noted that the necessary details to support the assessee's claim were not adequately presented before the Assessing Officer or during the appeal. Consequently, the Tribunal decided to remit the matter back to the Assessing Officer for a fresh examination, emphasizing the need for a fair opportunity for the assessee to present its case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826337 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 02-10-2025
• Other Referred Cases: Goetze (I) Ltd. Vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY DHIVARE
• Assessee Lawyers: VIHIT SHAH
• Keywords: Set aside; Revised return; Reasonable cause; Depreciation
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2284/PUN/2025 Assessment Year : 2018-19 Shree Hatkeshwara Translines, Office No.9, Wonder City, Commercial Building 1, Katraj By Pass Road, Katraj, Pune 411046, Maharashtra PAN : AABCH1999K Vs. ACIT, Circle-5, Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BOARD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2018-19 is directed against the order dated 22.08.2024 framed by ACIT-5, Pune u/s.250 of the Income Tax Act, 1961 (in short ‘the Act’) arising out of Assessment Order dated 20.04.2021 passed u/s.143(3) r.w.s.144B of the Act. 2. Assessee has raised following grounds of appeal : “1. Honourable CIT, Pune is not justified by making an addition of amount of depreciation claimed on interest on loans capitalized in the value of commercial vehicles. 2. Honourable CIT, Pune is not justified in ignoring the claim made during the assessment proceedings for claiming expense of interest on loan, which was capitalized in the value of commercial vehicles. Appellant by : Shri Vihit Shah Respondent by : Shri Sanjay Dhivare (Virtual) Date of hearing : 22.12.2025 Date of pronouncement : 06.01.2026 Printed from counselvise.com ITA No.2284/PUN/2025 Shree Hatkeshwara Translines 2 3. Honourable CIT, Pune erred in rejecting the revised computation filed by us : Sr.No. Particulars Amount (₹) 1 Profits and Gains from Business and Profession after all the adjustments (5,87,04,369) 2 Add : Depreciation on component of Interest Capitalized (As per IT Act, 1961) Accepted by Ld. CIT 17,35,772 3 Less : Interest expense actually incurred Not accepted based on decision of Hon Supreme Court in Goetze (I) Ltd. Vs. CIT (32,87,776) 4 Gross Total Income (6,02,56,373) 4. Assessee craves the right to present any other/additional Ground of Appeal and/or supporting Case Law(s) in support of his claim, during hearing (s) of the appeal matter.” 3. At the outset, ld. Counsel for the assessee submitted that the assessee has capitalised the interest paid for acquiring the Fixed Assets and has claimed depreciation thereon. However, the assessee is entitled to claim interest paid for the year as an expenditure rather than capitalizing such interest. He however fairly admitted that necessary details could not be filed before the ld. Jurisdictional Assessing Officer in support of the said claim and therefore prayed for providing one more opportunity to furnish these details. 4. On the other hand, ld. Departmental Representative submitted that the claim of the assessee of capitalizing the interest is part of the Audited Financial Statements and no revised return of income has been furnished by it for making alleged claim and in absence thereof such claim is not allowable. 5. We have heard the rival contentions and perused the record placed before us. We observe that the assessee is a Printed from counselvise.com ITA No.2284/PUN/2025 Shree Hatkeshwara Translines 3 Private Limited Company and loss of ₹5,85,90,659/- declared in the return of income for A.Y. 2018-19 furnished on 30.10.2018. After the case being selected for Compulsory Scrutiny valid notices u/s.143(2) and 142(1) of the Act duly served upon the assessee. Ld. Assessing Officer during the course of assessment proceedings observed that the assessee has capitalized the total interest incurred on purchase of commercial vehicles. In absence of any proper response from the assessee to explain the transaction, ld. AO completed the assessment disallowing depreciation of ₹17,81,764 and along with other addition of ₹19,26,438 assessed the total loss at ₹5,48,82,457. Assessee filed appeal before ld.CIT(A) and partly succeeded and so far as the issue under consideration is concerned, assessee failed to get any relief and also the assessee’s claim on interest paid to Non Banking Financial Companies (NBFC) at ₹32,87,776 was also denied as the assessee has not revised the return. 6. Before us, ld. Counsel for the assessee has made reference to the written submissions filed before ld.CIT(A) claiming that a mistake committed by the assessee in the past of capitalizing the interest paid on the loans taken for acquiring assets which have been put to use during the year was incorrect and the assessee is entitled to interest expenditure incurred during the year. We however find that assessee has failed to furnish the relevant details before the Assessing Officer and even before us also assessee could not place the facts properly as to why the interest has been capitalized during the year and now why the claim of interest paid to NBFC is allowable to the assessee. Printed from counselvise.com ITA No.2284/PUN/2025 Shree Hatkeshwara Translines 4 7. We therefore in the interest of justice deem it appropriate to remit back the issues raised in the instant appeal to the file of ld. Jurisdictional Assessing Officer for afresh adjudication of the issues and deciding them in accordance with law. Needless to mention that ld.JAO shall afford reasonable opportunity of hearing to the assessee. Assessee is directed to update latest email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and effective grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 06th day of January, 2026. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 06th January, 2026. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar, आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "