Shri Bhola Food Products Vs DCIT/ACIT (ITAT Lucknow)
Arbitrary Estimation of Interest Disallowance Deleted – ITAT Allows Bhola Food Products’ Appeal
Assessee had filed return of income on 24/01/2022 declaring total income of ₹6,80,23,110/-. AO completed assessment u/s 143(3) on 31/12/2022 determining total income at ₹6,91,33,790/- after disallowing expenses of ₹11,10,678/-. CIT(A) partly accepted Assessee’s contention & deleted most of the disallowance but sustained ₹2,50,000/- on account of interest, holding that there was lapse of time between entries for FYs 2020-21 & 2022-23.
Tribunal observed that CIT(A) had neither discussed how the disallowance of interest could be made in law, nor explained the basis for estimating the figure of ₹2,50,000/-. Such arbitrary estimation without legal justification could not be sustained. Revenue also failed to substantiate the addition during hearing. Accordingly, Tribunal directed deletion of ₹2,50,000/- & allowed the appeal of Assessee.
In absence of legal basis & reasonable estimation, addition sustained by CIT(A) on account of interest cannot survive. Appeal allowed
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
This appeal vide I.T.A. No.90/Lkw/2025 has been filed by assessee for assessment year 2021-22 against impugned appellate order dated 15/05/2024 (DIN & Order No.ITBA/APL/S/250/2024-25/1064897659(1) passed by learned Addl/JCIT(A), Bengaluru [“Addl/JCIT(A)” for short].
