Case Law Details
Hitesh Shantilal Mehta Vs DCIT (ITAT Mumbai)
The case revolves around the disallowance of interest expenses on the Assessee’s investments and the subsequent decision of ITAT to restore ground appeals for further examination.
In this case, the Department argued that the claimed interest expenses were mere book entries and would never be paid. However, ITAT decided to send the appeals back to the Assessing Officer (AO) for reconsideration and recalculation. The outcome of the ruling was partially favorable to the Assessee, as several grounds were restored for further evaluation.
The Assessee relied on a previous ruling by the Tribunal in a similar case involving Sudhir S. Mehta. The Tribunal had directed the AO to allow deduction in respect of the accrued interest, calculated at 12% per annum. The current case shares similar facts, leading to the allowance of the appeal for statistical purposes.
Conclusion: The ITAT Mumbai branch allowed the interest expense liability provision in the case of Hitesh Shantilal Mehta Vs DCIT (ITAT Mumbai). This ruling is significant as it pertains to the disallowance of interest expenses on the Assessee’s investment in shares and securities. The decision to restore ground appeals for reconsideration and recalculation resulted in a partly favorable outcome for the Assessee.
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