AO cannot disallow interest expense on Mere Presumption without disproving supporting evidences

J.M. Mhatre Infra Private Limited Vs ACIT (ITAT Mumbai) Introduction: In a significant legal development, the Income Tax Appellate Tribunal (ITAT) Mumbai delivered a landmark verdict in the case of J.M. Mhatre Infra Private Limited vs. Assistant Commissioner of Income Tax (ACIT). The case pertained to the disallowance of interest amounting to Rs. 1,16,82,953/- paid on an unsecured loan. This ruling sheds light on the meticulous examination of evidence and the importance of substantiating claims in tax matters. Background: During the assessment proceedings, the assessing officer (AO) observed t...