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Facts
The assessee, engaged in running a sugar factory, declared Nil income for AY 2014-15. During assessment, unsecured loans of ₹23,91,001 were added under Section 68 of the Act. The PCIT set aside the assessment order, finding it erroneous and prejudicial to the revenue.
Held
The Tribunal noted that the consequential assessment resulted in no demand against the assessee, accepting the returned Nil income. Therefore, the appeal was rendered infructuous.
Key Issues
Whether the appeal is infructuous as the consequential assessment order resulted in no demand against the assessee.
Sections Cited
263, 143(3), 143(1), 143(2), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BOARD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2014-15 is directed against the order dated 18.03.2024 framed by ld. PCIT, Nashik-1 u/s.263 of the Income Tax Act, 1961 (in short ‘the Act’) emanating out of Assessment Order dated 21.12.2016 passed u/s.143(3) of the Act.
Brief facts of the case are that the assessee is a company engaged in the business of running a sugar factory. Nil income declared in the return for A.Y. 2014-15 furnished on 29.03.2015. Return processed u/s.143(1) of the Act. Thereafter, case selected for scrutiny under CASS for verification of the Amalgamation or Demerger during the year. Valid statutory notice u/s.143(2) was issued and in response the assessee submitted explanation. During the course of assessment proceeding, ld. AO on perusal of income tax return observed that assessee has shown unsecured loans as Nil, however, in the balance sheet, assessee has shown unsecured loans from 04 persons aggregating to ₹23,91,001/-. In absence of furnishing of any details in respect of the unsecured loans, ld. AO made addition of said sum of ₹23,91,001/- u/s.68 of the Act. Subsequently, on verification of the assessment record, and the Balance Sheet of the assessee company as on 31.03.2014, ld. PCIT-2, Aurangabad set aside the Assessment Order with a direction that the assessment order should be reframed as per the provisions of law.
Aggrieved assessee approached this Tribunal and this Tribunal vide order dated 20.06.2022 set aside the order of ld.PCIT-2 Aurangabad. Pursuant thereto, assessee in response to the show cause notice filed written submissions which have been incorporated in para 5 of the impugned order. On legal issue, it is contended by the assessee company that case of the assessee was selected for limited scrutiny under CASS for verification of Amalgamation or Demerger during the year and the Assessing Officer has travelled beyond his jurisdiction and made the addition of unsecured loans other than the reasons recorded for reopening. On merits, the assessee company contended that certain amounts were inadvertently remaining to be mentioned while filing the income tax return.
We note that in the impugned order ld. PCIT while accepting the contention of the assessee on merits held that the assessment order dated 21.12.2016 is erroneous in so far as it is prejudicial to the interests of Revenue because the assessment has been made not only without proper verification but also without applying the relevant provisions of the Act properly. For the sake of brevity, we reproduce the finding of ld.PCIT and the same reads as under :
“08. In the light of the detailed discussion made hereinabove, I am of the considered opinion that the assessment order passed u/s 143(3) of the Act dated 21.12.2016 for Assessment Year 2014-15 by the then AO, is erroneous in so far as it is prejudicial to the interests of Revenue, because the assessment has been made not only without proper verification but also without applying the relevant provisions of the Act properly. Therefore, the provisions of section 263 of the I.T. Act, 1961 are hereby invoked and assessment order passed by the AO on the above issue is hereby set aside on the issue of difference in the value of share capital vis a viz investment of the shareholders, as mentioned in para 2.1 of this order.”
During the course of hearing before us, ld. Counsel for the assessee submitted that the in the consequential assessment proceedings carried out by ld. Assessing Officer in pursuance of the impugned order of Ld.PCIT dated 18.03.2024 resulted in No demand against the assessee. In other words, the returned Nil income is accepted by the assessee and therefore, the present appeal may be treated as Infructuous. Copy of the assessment order dated 24.03.2025 passed u/s.143(3) r.w.s.263 of the Act has been placed on record. Ld. DR on the other hand could not rebut the submission made be ld. Counsel for the assessee. In view thereof, the appeal filed by the assessee is dismissed being Infructuous.
In the result, the appeal filed by the assessee is dismissed as Infructuous.
Order pronounced on this 23rd day of December, 2025.