TaxTMI 
TaxTMI 
2026 (6) TMI 205
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.... 14.11.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the "Impugned order". The Relevant Assessment year is 2022-23 and the corresponding previous year period is from 01.04.2021 to 31.03.2022. 2. Factual Matrix 2.1 That as and by way of an assessment order made u/s 143(3) rws 144B of the act the total income of the assessee was computed and assessed at Rs. 9,47,165/-. Income as per the return of income filed was at Rs. 7,09,790/-. The addition/variation was made at Rs. 2,37,375/- as income from other sources. The aforesaid assessment order bears No. ITBA/AST/S/143(3)/2023-24/1063029443(1) & that the same is dated 20.03.2024, which is herein after referred to as the "Impugned Assessment Order". ....
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....t AY. Therefore, as per the detailed discussion made in preceding paras, the excess interest expense of Rs. 2,37,375/- claimed by the assessee is being disallowed and added to the total income of the assessee." 2.3 That the assessee being aggrieved by the aforesaid "Impugned Assessment Order" prefers the first appeal u/s 246A of the act before the Ld. CIT(A) who by the "Impugned Order" has dismissed the first appeal of the assessee on the grounds & reasons stated therein. The core grounds & reasons for the dismissal of the first appeal were as under:- "6.1. Further, it can also be seen that the assessee has taken fresh loans from the parties amounting to Rs. 2,10,00,000/- for which no satisfactory documentary evidences ....
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.... 1. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance made by the 1 Learned Assessing Officer of Rs. 2,37,375/- on account of excess interest claimed on unsecured loans and treating the same as income from other sources. 2. Without prejudice to the above ground, the learned CIT(A) erred in law and on facts in not allowing the alleged claim of excess 2 interest paid on unsecured loans in the subsequent assessment year, despite the appellant having made specific submissions in this regard during the appellate proceedings. 3. On the facts and circumstances of the case and in law,, the Ld. CIT(A) erred in confirming the disallowance made by the 3 Learned Assessing Of....
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....ni Engineering & industries Ltd.]. Reliance was also placed on ITAT Delhi order dated 02.08.2022 in ITA No. 9386/Del/2019 in case of ACIT v/s Gurgaon Gramin Bank para 8. Reliance was also placed on ITAT Delhi order dated 07.02.2025 in ITA No. 2585/Del/2022 in case of Prasandi InfoTech Park Pvt Ltd v/s ACIT CC1 new Delhi para 8. These judgements & orders were to emphasis the tax neutrality effects. Per Contra the Ld. DR appearing for & on the behalf of the revenue submitted that assessee is following a mercantile system of accounting & why they are emphasising specific expenditure only. Para 4.6.3 (Supra) of the Ld. AO order was emphasised (supra). With regard to revenue neutral exercise the Ld. DR stated that since the interest & the penalt....
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.... as "Impugned Order" is concerned the Ld. CIT(A) in para 6.1 (supra) has upheld the "Impugned Assessment Order". We observe & notice that in the "Impugned Assessment Order" & so also in the "impugned Order" the entire lis interse between the assessee & the revenue is in the narrow encompass i.e. year of taxability of amount spent of Rs. 5,20,875/- [interest amount expended]. The lower authorities have confined the amount &/or restricted it to Rs. 2,83,500/- only for the period 14.02.2022 to 31.03.2022 (45 days only) i.e. for the year under consideration. Remaining amount of Rs. 2,37,375/- is disallowed & added to the total income exigible to Tax. We find that the entire exercise of seeking to disturb year of allowability of expenditure woul....
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....contrary finding in the order of lower authority's. The entire exercise is revenue neutral. The ITAT order dated 02.08.2022 PB page 7 [ITANo.9836/Del/20-19 [ACIT vs. Gurgaon Gramin Bank] relied upon para 8 which is reproduced below: "8. We have heard the parties, perused the material on record and gave our thoughtful consideration. It is emerges from the material on record that, the assessee was maintaining books of accounts which being duly audited by expert, i.e. Chartered Accountant. The report of the chartered accountant has been furnished before the A.O. At the time of assessment proceedings, the Assessing Officer has disallowed the expenditure only on the ground that, it has been claimed as prior period expenditure although t....