IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 137/MUM/2025 Assessment Year: 2018-19 ACIT(CC)-7(3), Lotus Logistics and Developers Mumbai Private Limited

301, 13th Level, Lotus Trade Centre, Vs. New Link Road, Near D N Nagar Metro Station, Andheri-west Mumbai – 700013 (PAN : AABCL1198G)

(Appellant) (Respondent)

CO. No. 28/MUM/2025 (Arising out of ITA No. 137/Mum/2025)

Assessment Year: 2018-19 Lotus Logistics and ACIT(CC)-7(3), Developers Private Limited Mumbai

301, 13th Level, Lotus Trade Centre, New Link Road, Near Vs.

D N Nagar Metro Station, Andheri-west Mumbai –

700013 (PAN : AABCL1198G)

(Appellant) (Respondent)

Present for:

Assessee : Shri Rushabh Mehta and Shri Niraj Soni, CAs Revenue : Shri Aditya M. Rai, Sr. DR Date of Hearing : 19.06.2025 Date of Pronouncement : 28.08.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the Revenue and Cross Objection by the assessee are against the order of Ld. CIT(A)-49, Mumbai, vide order no. ITBA/APL/S/250/2024-25/1070026772(1), dated 29.10.2024, passed against the assessment order by Assistant Commissioner of Income-tax, Central Circle-7(3), Mumbai, u/s. .143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 26.07.2021, for Assessment Year 2018-19.

2. Grounds taken by the revenue in its appeal are reproduced as under:

1. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Unsecured Loan of Rs. 25,00,000/- u/s 68 of the Act and disallowance of interest payments of Rs.53,91,452/- u/s 69Cof the Act paid on unsecured loans.

2. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Unsecured Loan of Rs. 25,00,000/- u/s 68 of the Act received from M/s Santosh Gem Pvt.Ltd and disallowance of interest payments of Rs.53,91,452/- u/s 69Cof the Act paid on unsecured loans to M/s Valaka Engineering Pvt Ltd, M/s Antique Exim Pvt Ltd and M/s Santosh Gem Pvt. Ltd without considering the facts that the funds flowing into these entities were sourced from a complex network of other entities through share premiums or unsecured loans, which were subsequently transferred to other parties, including the assessee, in similar forms and merely submitting documents such as confirmation letter, income tax returns, bank statements, or financial statements did not prove the creditworthiness or authenticity of the transactions."

3. "On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting addition of Rs.1,89,634/-made on interest on delayed payments without considering the fact that interest arised due to default in meeting statutory liabilities and is not considered a business expense under Section 37(1) of the Income Tax Act, 1961."

4. "On facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting addition of Rs 37,96,105/- made u/s 43CA of the Act without considering the fact that the there is nowhere clearly mentioned in the Income-tax Act that the first proviso to the section 43CA of the Act is retrospective and unless explicitly stated, a piece of legislation is presumed not to be intended to have a retrospective operation."

2.1. Grounds taken by the assessee in its cross objection are reproduced as under:

1. The Learned CIT(A) erred in law and on facts in confirming the addition of Rs.

2,08,631/- collected from M/s Indian Film and TV Producer Council as maintenance charges, without considering that the amount represents a current liability. As per provision of the RERA Act, 2016, the assessee company is responsible for maintaining essential services until the association of allottees takes over. The said amount is to be transferred to the Resident Welfare Association (RWA) upon its formation and does not constitute the income of the assessee.

2. The respondent craves leave to add, alter or modify any ground of cross objection.”

3. Brief fa