Interest deduction u/s 57(iii) requires nexus and proportionality between borrowings and interest-earning advances; consistency across assessments on identical facts.

आदेश/ORDER

PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal is filed by the assessee against the order passed by the learned Commissioner of Income Tax (Appeals)-48, Mumbai [hereinafter referred to as "CIT(A)"], dated 26.09.2025, under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for the Assessment Year 2014-15, arising out of the assessment order passed by the Assessing Officer under section 143(3) of the Act dated 22.11.2016.

Condonation of Delay

2. At the outset, it is noticed that there is a delay in filing the present appeal before us. As per the record, the impugned order of the learned CIT(A) is dated 26.09.2025, whereas the present appeal has been filed on 03.01.2026, resulting in a delay of 99 days. The assessee has filed an application for condonation of delay along with an affidavit in support thereof. In the condonation petition, it has been stated that the delay has occurred neither deliberately nor intentionally but due to bona fide and unavoidable circumstances. It is submitted that the tax and accounting matters of the assessee are being handled by an accountant, who was burdened with substantial professional work during the relevant period, particularly due to peak compliance season involving filing of returns, statutory audits and GST audit assignments. Due to such continuous professional commitments, the communication relating to the appellate order could not be noticed and the status on the income tax portal was inadvertently not checked. It has been further submitted that immediately upon becoming aware of the order of the learned CIT(A), prompt steps were taken to file the present appeal without any further delay. It has also been averred that the assessee has a good case on merits and that non-condonation of delay would cause irreparable hardship. The affidavit filed by the concerned accountant also reiterates the aforesaid facts and confirms that the delay occurred on account of heavy professional workload and inadvertent omission, without any mala fide intention or deliberate negligence.

3. During the course of hearing, the learned Departmental Representative (DR) did not raise any objection to the condonation of delay.

4. We have carefully considered the submissions made in the condonation petition and the affidavit filed in support thereof. In our considered view, the assessee has demonstrated sufficient cause for the delay in filing the appeal. The explanation furnished appears to be bona fide and the delay cannot be attributed to any deliberate or intentional lapse. Considering the settled legal position that a liberal approach is to be adopted in matters of condonation of delay, particularly when substantial justice is involved, and in the absence of any objection from the Revenue, we deem it appropriate to condone the delay of 99 days in filing the appeal. Accordingly, the delay in filing the present appeal is condoned and the appeal is admitted for adjudication on merits.

Facts of the Case

5. The assessee is an individual deriving income from salary, house property, business income and income from other sources. The return of income for the year under consideration was filed electronically on 23.07.2014 declaring total income of Rs. 8,97,410/-. The return was initially processed under section 143(1) of the Act. Subsequently, the case was selected for limited scrutiny under CASS and notice under section 143(2) dated 31.08.2015 was issued and served upon the a