ITA No.6118/Mum/2026

Parties Involved

Facts Summary

The assessee, JSW Jaigarh Port Limited, filed its return of income for Assessment Year 2020–21 on 12.02.2021, declaring a total loss of ₹59,55,93,258. The return was selected for scrutiny and, after issuance of statutory notices under sections 143(2) and 142(1) and consideration of the material and explanations furnished by the assessee, the assessment was completed under section 143(3) read with section 144B of the Act vide order dated 28.09.2023, determining the total loss at ₹46,87,37,559. In its audited financial statements, the assessee had recognised expenditure of ₹4,83,26,000 arising from equity-settled share-based payment transactions pertaining to ESOPs. The nature of such expenditure and its accounting treatment stood disclosed in the financial statements and the accompanying notes forming part of the assessment record. Subsequently, the learned PCIT issued a show-cause notice dated 24.12.2025 proposing to revise the assessment order on the ground that the deduction of ₹4,83,26,000 claimed by the assessee under section 37(1) represented a notional expenditure arising on account of issue of shares at a discount and was, therefore, not allowable. The learned PCIT was also of the view that the Assessing Officer had failed to make adequate enquiry into the claim.…

Legal Issues

• 1. Whether the learned Principal Commissioner of Income-tax has erred in initiating proceedings under section 263 of the Income-tax Act, 1961, vide show-cause notice dated 24.12.2025 and in passing the impugned order without properly considering the facts and circumstances of the case.
• 2. Whether the learned Principal Commissioner of Income-tax has erred in revising the assessment order passed under section 143(3) read with section 144B of the Act, even though the said assessment had been completed by the Assessing Officer after making adequate enquiries and due application of mind.
• 3. Whether the learned Principal Commissioner of Income-tax has erred in holding that the assessment order passed under section 143(3) read with section 144B of the Act was erroneous and prejudicial to the interests of the Revenue, without appreciating the facts and circumstances of the case.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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