Sapphire Fintech Private Limited Vs DCIT (ITAT Mumbai)
The appeal before the Mumbai Bench of the Income Tax Appellate Tribunal concerned the assessment year 2014–15 and challenged the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, confirming certain additions and disallowances made by the Assessing Officer. The assessee raised three principal grounds relating to disallowance of interest on loans treated as non-genuine, non-allowance of an inadvertent self-disallowance of ₹9 lakh made in the return, and denial of set-off of brought forward losses and unabsorbed depreciation.
On the first issue, the assessee had claimed interest expenditure of ₹7,21,660 on loans obtained from two entities. These loans had earlier been treated as non-genuine in assessments for earlier years. Relying on those earlier findings, the Assessing Officer disallowed the interest claim, and the disallowance was upheld by the Commissioner (Appeals). Before the Tribunal, the assessee pointed out that in its own case for earlier assessment years, the Tribunal had already restored the issue of genuineness of these loans to the file of the Assessing Officer for fresh adjudication. Since the foundational issue of the nature of the loans was pending reconsideration, the Tribunal held that the allowability of interest expenditure could not be finally decided at this stage. Accordingly, the matter relating to interest disallowance was also restored to the Assessing Officer for de novo adjudication. The impugned order on this issue was set aside, and the ground was allowed for statistical purposes.
