S. V. Distilleries Private Limited Vs DCIT/ACIT (ITAT Bangalore)
ITAT Bangalore Sets Aside Dismissal of Appeal as Time-Barred, Remands Matter to CIT(A) for Merits Adjudication
The assessee appealed against the order dated 24.06.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (CIT(A)/NFAC) under Section 250 of the Income-tax Act, 1961 for Assessment Year 2018-19. The grounds of appeal challenged, among other things, the dismissal of the first appeal as barred by limitation, the disallowance of business expenditure of ₹1,02,14,492, disallowance of ₹13,75,271, addition of ₹14,56,51,759 as unexplained cash credit under Section 68 read with Section 115BBE, and levy of interest under Section 234B.
The assessee had filed its return of income on 19.09.2018 declaring a loss of ₹89,54,703. The case was selected for complete scrutiny under CASS on the issue of “Business Loss.” During assessment proceedings, the Assessing Officer observed that although the assessee had stated in its return that it was engaged in manufacturing activities, it subsequently informed the department by letter dated 16.03.2021 that there had been no business activity during the relevant year. Since the assessee had nevertheless claimed business expenditure of ₹1,02,14,492, the Assessing Officer disallowed the entire amount. The Assessing Officer also examined unsecured loans of ₹14,56,51,759 received from related parties. As the assessee did not furnish income-tax returns, bank statements or other evidence to establish the identity, creditworthiness and genuineness of the lenders, the amount was treated as unexplained cash credit under Section 68 read with Section 115BBE. The assessment under Section 143(3) was completed on a total income of ₹14,69,11,548 as against the returned loss.
