2025 (3) TMI 300 - AT - Income Tax

Reduction in the current year loss eligible to be carried forward - addition made in the intimation passed u/s 143(1) of the Act by CPC Bangalore - HELD THAT - We find that the assessee has shown refund of value added tax which was admitted by the authority concerned. In the tax auditors report same was duly reported. As stated that the amount falling within the scope of Section 28 was Rs. Nil. We also note that assessee has stated that the goods and service tax was not rooted through the profit and loss account. Considering these facts we find merit in the contention of the ld. AR that the information furnished by the assessee in the tax report qua the refund of GST admitted by the authority concerned has been mistook and misunderstood by the CPC Bangalore to be item falling under Para 16a which is qua the item falling within the scope of 28 of the Act. Since this is a factual mistake committed by the CPC Bangalore at the time of processing which the CIT (A) failed to appreciate and rectify during the appellate proceedings. The order passed by the ld. CIT (A) is incorrect and accordingly set aside order and the AO is directed to delete the adjustment made by the AO. The appeal of the assessee is allowed.

Summary

The case involves an appeal by the assessee against the Commissioner of Income-tax (Appeals) regarding the reduction in the current year loss eligible to be carried forward. The Appellate Tribunal found that the adjustment made by the CPC, Bangalore was based on a factual mistake regarding the treatment of a refund of value-added tax. The Tribunal set aside the order of the Commissioner of Income-tax (Appeals) and directed the Assessing Officer to delete the adjustment made. Consequently, the appeal of the assessee was allowed.