ITAT Deletes Interest Disallowance After Revenue Accepts Loan Genuineness

Rakesh Gupta Family Trust Vs ACIT (ITAT Mumbai) The Income Tax Appellate Tribunal (ITAT), Mumbai, in the case of Rakesh Gupta Family Trust Vs ACIT, allowed the assessee’s appeal, deleting the disallowance of {Rs.}3,00,000/- in interest expenditure claimed for the Assessment Year (AY) 2011-12. The Tribunal ruled that once the Assessing Officer (AO) accepted the genuineness of the underlying loan principal by not making an addition under Section 68 of the Income-tax Act, 1961, the disallowance of interest paid on those same loans cannot be sustained. The case originated from the reopening of t...