FEXPRIME FINANCE PRIVATE LIMITED,DELHI V. DCIT, CIRCLE-7(1), DELHI

ITA 1361/DEL/2025

AI Insights

Fexprime Finance Pvt. Limited, a registered Non-Banking Financial Company (NBFC), appealed against the order of the Commissioner of Income Tax (Appeals) which upheld an addition made by the Central Processing Centre (CPC) under section 143(1) of the Income Tax Act, 1961. The addition pertained to liabilities written off, which the assessee argued had already been taxed and credited under 'Other Income' in the Profit & Loss account. The Tribunal examined the financial statements and tax audit report, finding that the income had been duly reported and the addition by CPC was a case of double taxation. Consequently, the Tribunal allowed the appeal, correcting the income and loss figures as claimed by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783317 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Appeal Filed On: 04-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: ANSHUL KUMAR; NEHA AGRAWAL; S
• Keywords: Set aside; Opportunity of being heard

Judgement Text

"ITA No.1361/Del/2025 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “C” BENCH: NEW DELHI BEFORE SHRI SUDHIR KUMAR, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 1361/Del/2025 [Assessment Year : 2021-22] Fexprime Finance Pvt. Limited, 2E/8, 3rd and 4th Floor, Jhandewalan Extension, Swami Ram Tirth Nagar, Delhi PAN-AADCB1443Q vs Asst.DIT, CPC, Bengaluru APPELLANT RESPONDENT Appellant by Shri Anshul Kumar & Ms. Neha Agrawal, CA’s. Respondent by Shri Dayainder Singh Sidhu, CIT. DR Date of Hearing 20.08.2025 Date of Pronouncement 07.11.2025 ORDER PER MANISH AGARWAL, AM : The captioned appeal is filed by the assessee against the order dated 10.01.2025 passed by Ld. Commissioner of Income Tax (A)/ADDL/JCIT(A)-1, Mumbai [“Ld. CIT(A)”] in Appeal No. NFAC/2020-21/10162187 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the intimation order dated 05.07.2022 u/s 143(1) of the Act pertaining to assessment year 2021-22. 2. Brief facts of the case are that the assessee company is a registered NBFC with the Reserve Bank of India and is engaged in providing financing services to its customers, primarily for purchase of two wheelers. Return of income was e-filed on 14.03.2022, declaring income at NIL and claimed carry forward of current year's total loss of INR 18,19,72,248/-. The assessee received a show Printed from counselvise.com ITA No.1361/Del/2025 Page | 2 cause notice dated 14.04.2022 from CPC for proposed adjustment u/s 143(1)(a)(iv) of the Act. In response, a reply was submitted wherein the assessee expressed its disagreement to the proposed adjustment by stating that proposed adjustment of Rs. 14,45,64,504 represents the amount of liabilities written off which were claimed as expenses in earlier years and since the same is already offered for tax by crediting in the P&L under the head 'Other Income\" in Note 22 of Financial Statements, any further addition would be double addition. However, the CPC without appreciating the same, made the addition for this amount while processing the return u/s 143(1) of the Act. 3. The assessee had filed an appeal before Ld. CIT(A) and the ADDL/JCIT(A) in terms of order dated 10.01.2025, has summarily dismissed the appeal of the assessee. 4. Aggrieved by the said order, assessee is in appeal before the Tribunal by taking following grounds of appeal:- 1. “That on the facts and in the circumstances of the case and in law, the order passed by the Ld. Asst. Director of Income Tax, CPC, Bengaluru ('the Ld. A.O) under section 143(1) of the Act and the appellate order passed by the Ld. Additional/Joint Commissioner of Income Tax (A)-1, Mumbai [hereinafter referred to as 'the Ld. ADDL/JCIT] under section 250 of the Act, are bad and untenable in law. 2. That on the facts and in the circumstance of the case and in law, the Ld. AO and the Ld. ADDL/JCIT have erred in passing the order without considering the fact that the Appellant has already offered an income of INR 14,45,64,504 for taxation, which has been duly credited to the Profit & Loss Account as per section 41(1) of the Income Tax Act, 1961. As a result, the addition leads to double taxation of the same income of the Appellant, which is wrong and totally unlawful. Printed from counselvise.com ITA No.1361/Del/2025 Page | 3 3. That on the facts and in the circumstances of the case and in law, the Ld. ADDL/JCIT has erred in passing the appellate order on the basis of incorrect facts wherein it has been assumed that certain expenses were to be disallowed by the Appellant as per the Tax Audit Report, whereas the matter in the appeal pertains to the amount of income tax twice in the hands of the Appellant. 4. That on the facts and in the circumstances of the case and in law, the Ld. AO and the Ld. ADDL/JCIT has erred in reducing the current year's loss by INR 14,45,64,504. Also, the total losses carried forward to future years to NIL in the order passed under section 143(1) of the Act. 5. The order passed by the Ld. ADDL/JCIT is bad in law, and it is based on incorrect interpretation of the law and without allowing proper and reasonable opportunity of being heard. The above grounds of appeal are all independent and without prejudice to each other. The Appellant craves leave to supplement, to cancel, to amend, to add and/or otherwise to alter/ modify any or all the grounds) of appeal stated herein above on or before its hearing before your honor.” 5. Since all the grounds of appeal are with respect to the addition of Rs. 14,45,64,504/- and corresponding reduction in the claim of loss carried forward to next year, thus all the grounds of appeal are taken together for consideration. 6. Before us, ld. AR for the assessee submits that the CPC has made the adjustment of Rs. 14,45,64,504/- under the pretext of same being an income reported in the Tax Audit Report and failed to appreciate that the said amount has already been credited in the Profit & Loss account and forming part of the total income declared in the return of income filed thus, any further addition of said amount tantamount to double addition. Ld. AR further submits that this adjustment has resulted into reduction in the amount of carry Printed from counselvise.com ITA No.1361/Del/2025 Page | 4 forward loss of the current year to Rs. 3,74,07,744/- as against the claim of Rs. 18,19,72,248/- made in the return of income filed. 7. Ld. AR drew our attention to the paper book page 136 wherein at “Note No.22” to the Balance Sheet, under the head “Other Income” assessee has declared income in following items: (i) Liability/provision no longer required written back: Rs. 84.85lacs (ii) Recovery of sums written off in in previous years : Rs.1360.79 Lacs 8. Ld. AR also refer page 27 of the paper book which is the part of ITR filed where assessee has shown the above items as income. He submits that in the tax audit report, the auditors have reported these amounts in item No. 25 specified for “Any amount of profit Chargeable to tax under section 41 and computation thereof” which is available at paper book pages 175-176. Ld. AR submits that in response to the show cause issued by CPC before making such adjustment, these facts were duly explained however, the CPC has made the adjustment without appreciating the facts narrated. Ld. AR further submits that in first appeal, Ld. CIT(A) has failed to understand the nature of transaction and the entries in the books of accounts and summarily dismissed the appeal without even considering of making any comments to the detailed submission made by the assessee. He, therefore, prayed that the addition made deserve to be deleted. Printed from counselvise.com ITA No.1361/Del/2025 Page | 5 9. On the other hand, Ld. CIT.DR for the Revenue supports the orders of the lower authorities and submits that the assessee has claimed that this amount was credited in the Profit & Loss Accounts which fact needs to be verified therefore, the matter may be set aside to the file of the AO for necessary verification. He prayed accordingly. 10. Heard the contentions of both the parties and perused the material available on record. From the perusal of Financial statements placed in the paper book, it is seen that the assessee has already credited this amount in the books of accounts and shown under the head “Other Income” in Note 22 of Profit & Loss account for the year ended on 31.03.2021, the relevant page is 136 of the paper book filed by the assessee. Further this amount is reported by the auditors in the tax audit report for the purpose of reporting only. From the perusal of the ITR-6 placed before us, it is seen that in the Profit & Loss account at item No. 14(xi) under the title “Any other income (specify nature and amount)”, assessee has duly declared both the amounts which are written back and credited to the Profit & Loss account as income as per section 41(1) of the Act. The relevant page is 27 of the paper book filed by the assessee. It is also seen that assessee vide response filed against the show cause issued by CPC has given its disagreement and filed following response: “INR 14,45,64,504 represents the amount of liabilities written off which were claimed as expenses in earlier years. It qualifies as income u/s. 41 of the Act, however, it has already been credited in the P&L under the head 'Other Income\" in Note 22 of Financial Statements. Therefore, there is no requirement of separately adding Printed from counselvise.com ITA No.1361/Del/2025 Page | 6 such an amount in the clause 20 of Schedule BP of ITR, as it would lead to double taxation of INR 14,45,64,504.” 11. Ld. CIT(A) while dismissing the appeal of the assessee, simply observed that the said disallowance was indicated by the auditor in tax audit report but not taken into account in computing the total income by the assessee. As observed above, such remarks of ld. CIT(A) are contrary to the facts where the ld. CIT(A) even had not bothered to verify the facts as narrated by the assessee with the evidences like Financial statements and copy of the return of income where this amount has already been disclosed as part of the total income. 12. In view of the above facts and in our considered opinion, once the assessee has been able to demonstrate that amount of Rs. 14,45,64,504/- has already been credited to the profit & loss account as part of the total income declared and the auditor has reported the same in the tax audit report without there being any remark to suggest that the same is to be again included in the total income, the addition mad by the CPC is double addition and therefore, the same is hereby deleted. The AO is also directed to allow the correct amount of loss to be carried forwards to next year after deleting the disallowance as directed herein above. All the grounds of appeal taken by the assessee are thus allowed. Printed from counselvise.com ITA No.1361/Del/2025 Page | 7 13. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 07.11.2025. Sd/- Sd/- (SUDHIR KUMAR) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT 6. Guard File ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "