Addition for loans taken in earlier years: ITAT remands matter back to AO 

Arun Babulal Shah Vs CIT (ITAT Mumbai)

In the case of Arun Babulal Shah Vs CIT (ITAT Mumbai, the ITAT remanded the matter back to the Assessing Officer (AO) for further verification. The dispute involved the addition of Rs. 7,93,74,917 as unproved loans and disallowance of Rs. 56,06,404 in interest. The ITAT found that several of the loans were carried over from earlier years and thus should not be added to the current year’s income. For loans and interest related to this year, the ITAT directed the AO to verify the claims with proper documentation and evidence, as some aspects remained unverified. The appeal was partly allowed, with directions for the AO to provide the assessee a fair opportunity to present evidence and for further scrutiny.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

Instant appeal of the assessee is preferred against the order of the National Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2012-13, date of order 20.01.2023.The impugned order was emanated from the order of the ld. Deputy Commissioner of Income-tax, Circle 7(2)(1),Mumbai (in short, ‘the A.O.’) passed under section 143(3)of the Act date of order24/03/2015.

2. The assessee has taken the following grounds of appeal:-

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