Radhika Abhishek Family Trust Akshay Vs ITO (ITAT Ahmedabad)
Gross Interest Can’t Be Taxed Ignoring Interest Cost: Ahmedabad ITAT Deletes ₹9.64 Lakh 69A Addition
The Ahmedabad “SMC” Bench of the ITAT allowed the appeal of Radhika Abhishek Family Trust vs. ITO, Ward-1(3)(1), Ahmedabad, ITA No. 1952/Ahd/2025, AY 2020-21, vide order dated 18.12.2025, and deleted the addition of ₹9.64 lakh made u/s 69A
The reassessment was initiated on the basis of TDS information showing interest income of ₹9,64,603 received from M/s Aavishkar Trading Company. During reassessment proceedings, the Assessee demonstrated that it had received ₹1.40 crore as loan, which was further advanced to the said concern, and that it had paid interest of ₹7,62,520 on borrowed funds. The Assessee had already offered the net interest income of ₹1,84,500 for taxation in the return filed in response to notice u/s 147.
The Tribunal noted that the AO ignored the corresponding interest expenditure and wrongly brought the entire gross interest receipt to tax, despite the income having already been offered on a net basis. Since the Revenue could not rebut the factual position, the ITAT held that taxing the full interest receipt again would be unjustified and contrary to settled principles.
Accordingly, the addition of ₹9,64,603 was deleted in full, and the Assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The above appeal has been preferred by the assessee against order passed by the Ld.Commissioner of Income-Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “ld.CIT(A)] dated 25.09.2025 under section 250 of the Income Tax Act, 1961 (“the Act” for short) for the assessment year 2020-21.
