TaxTMI 
TaxTMI 
2025 (8) TMI 1101
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....nd income from fund investment in Mutual Fund. Return for the relevant assessment year was submitted on 22/09/2016 declaring a total income of Rs. 1,97,828/-. The Appellant's case was selected for limited scrutiny under CASS. The issues mentioned in Notice u/s 143(2) contained 2 issues for verification. First issue was whether tax aspects related to investments/ advances/ loans have been considered in the return of income and Second issue whether capital gain/ loss on sale of property has been correctly shown in the return of income. In response to notices issued under section 142(1) various compliances were made by the Appellant Company online. It was also submitted before the Assessing Officer that Loan to Awani Projects Infrastructure Lt....
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....est to the AO to issue notice under section 133(6) to these parties in order to verify that they have neither provided or paid any interest to the Appellant Company. A perusal of Form No-26AS for the relevant assessment year also proves that Awani Projects and Infrastructure Ltd and AKJ Minerals Ltd did not provide or paid any interest to the Appellant Company. The Learned Assessing Officer by completely overlooking these evidences added a sum of Rs. 21,08,296/- by treating the same as interest income without bringing any evidence on record to rebut the submissions made by the Appellant Company during the course of e- proceedings and completed the assessment under section 143(3) at a total income of Rs. 23,06,130/- as against the returned i....
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....ed an appeal before the ITAT and raised the following grounds:- That the Learned Addl/JCIT(A)-10 Mumbai has erred in law and in facts in upholding the action of the Learned Assessing Officer in adding a sum of Rs. 21,08,296/- on following counts: (i) The AO's addition of Rs. 21,08,296/- in AY 2016-17, purportedly based on interest income earned in AY 2015-16, is fundamentally flawed. The AO incorrectly assumed interest income from loans granted to Avani Projects & Infrastructure Ltd. and AKJ Minerals Ltd. In reality, no interest was received from these companies during AY 2015-16, and the recoverability of the principal amounts was also doubtful. (ii) Neither Avani Projects & Infrastructure Ltd. nor AKJ Minera....
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....ting and reporting requirements. (vii) The Learned Addl/JCIT(A)-10 erroneously overlooked the fact that Avani Projects & Infrastructure Ltd. was undergoing Corporate Insolvency Resolution Process (CIRP). The Appellant submitted evidence of this during the appeal hearing, which was improperly disregarded. (viii) The Learned Addl/JCIT(A)-10 failed to acknowledge that the principal amount of Rs. 35,00,000/- was fully recovered from AKJ Minerals Ltd. in AY 2018-19, without any interest. This recovery further reinforces the Appellant's contention that no interest income was earned or due. (ix) The Learned Addl/JCIT(A)-10 incorrectly stated that interest forgone must be recorded in the minutes of the Board Meeting. ....
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....Commissioner (Appeals) failed to acknowledge the documented financial instability of Awani Projects & Infrastructure Limited during the assessment proceedings. He further submitted that the appellant presented evidence of a dishonoured cheque for Rs. 24,10,027/- issued by them on 20.01.2024, demonstrating their financial difficulties. The ld. Counsel further submitted that the ld. Assessing Officer granted loans to these two companies, which were appropriately classified as doubtful debts in the assessee's audited financial statements, reflecting the uncertainty of recovery and the non-recognition of interest income. He further submitted that the revenue authorities failed to acknowledge that the principal amount of Rs. 35,00,000/- was full....
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.... balance- sheet and all other relevant documents, in order to prove that the assessee has not received any interest income and also, he placed evidence before me that the assessee-company received only principal amount during the assessment year 2018-19 from AKJ Minerals Limited without any interest. The ld. Counsel for the assessee brought to my notice that Avani Projects & Infrastructure Limited failed to file Insolvency petition, copy of which is placed at page no. 223 of the paper book. Considering all the facts and circumstances of the case, I am of the view that it is a fit case to set aside the orders passed by the lower authorities and remit the matter back to the file of ld. Assessing Officer to examine the documents filed by way o....