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Judgment
PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)/Addl/JCIT(A) Panchkula, (‘Ld. CIT(A)’ for short), New Delhi dated 05/05/2025 for the Assessment Year 2021-22.
The grounds of Appeal are as under:-
“Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.37,74,00,000/- account of double disallowance made by the assessee which was not actually added back in the computation of income by the assessce (without verification made from the ITR)”.
Brief facts of the case narrated by the Assessee before the Ld. CIT(A) which has been reproduced in the order impugned of the CIT(A) are as under:
“The company admitted as income of Rs 18.91 crores made up of Business income of 3973.14 crores fully set off against BF Business Loss of Rs 8536.60 crores and unabsorbed depreciation of Rs 13854.92 crores to make it Nil with still CF losses of Rs 18418.38 crores remaining and Long Term Capital gains of Rs 18.91 crores. The company had claimed allowance of Rs 507.64 crores u/s 43B out of past disallowances which have not been considered. The profits and losses on assets in PNL account shown in TAR and adjusted in the computation of Taxable income as Capital Gains or in Block of assets have been excluded to the extent of Rs 54.77 crores. The adjustment of Rs 8,74,155 u/s 40(a)(i)(ia) of the Act is apparently due to typographical error Further the adjustments are in Profits and Gains of business which get set off against BF business losses & unabsorbed depreciation of much higher magnitude The intimation also shows that it is not considering the BF losses for AY 16-17 and 17-18 purportedly for not stating the date of returns submissions though they appear in the ITR uploaded. Consequently, the income determined and demand raised are wrong. The above adjustments made in the intimation u/s 143(1) are in our opinion are adjustments beyond the scope of Section 143(1) of the Act. Hence this appeal. Further facts will be explained at the time of hearing of the appeal.”
As against the order dated 14/12/2022 passed by the CPC, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 05/05/2025, deleted the addition of Rs. 5,476 on the ground that the same amounts to double addition. Aggrieved by the deletion of addition of Rs. 37,74,00,000/-, Revenue preferred the captioned Appeal on the grounds mentioned above.
The Ld. Departmental Representative submitted that the Ld. CIT(A) committed error in deleting the addition of Rs. 37,74,00,000/- on account of double disallowance made by the Assessee which was not actuallyadded back in the computation of income by the Assessee, wherein the Ld. CIT(A) has not made verification from the ITR. Thus, submitted that the order of the Ld. CIT(A) deserves to be reversed.
Per contra, the Ld. Assessee's Representative submitted that the Ld. CIT(A) after the verification of the material on record, satisfied that the net loss on sale of assets of Rs. 3,774lakhs has been added back in the computation of taxable assets at Item No. 5, therefore, rightly held that same is amounts to double addition and deleted the addition, which requires no interference in the hands of the Tribunal.
We have heard both the parties and perused the material available on record. As could be seen from the order of the Ld. CIT(A), the Ld. CIT(A) deleted the impugned addition on the ground that the net loss on sale of assets of Rs. 3,774lakhs has been added back in the computation of taxable assets as Item No. 5, therefore, the impugned addition amounts to double addition. However, while deleting the addition, the Ld. CIT(A) has relied on the reply dated 12/07/2024 of the Assessee and nowhere mentioned regarding verification of the said fact from the ITR of the Assessee or any other or documentary evidence. Considering the above facts and circumstances, we remand the matter to the file of the A.O. with a direction to verify the ITR of the Assessee and pass fresh order and if the contention of the Assessee that the said loss is already added back to the income no further addition to be made by the A.O.
In the result, Appeal of the Revenue is partly allowed for statistical purpose.