MADURA COATS PRIVATE LIMITED,MADURAI V. ACIT, CORP. CIRLCE-2 MADURAI, MADURAI

ITA 2810/CHNY/2024

AI Insights

The case involves Madura Coats Pvt. Ltd., which appealed against the order of the CIT(A) concerning an income adjustment of Rs.22.47 Crores related to inventory valuation deviations reported in the Tax Audit Report for the Assessment Year 2022-23. The adjustment was initially Rs.27.27 Crores by the CPC, later reduced by CIT(A). The appellant argued that the figures reported by the Tax Auditor were incorrect, leading to the disputed adjustment. The Tribunal agreed to remit the issue back to the Jurisdictional AO for verification of the reported figures, particularly to check for any typographical errors.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472379 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAY BARAN SOM LD
• Assessee Lawyers: NIKHIL LD
• Section: 143(1)

Judgement Text

" आयकर अपीलीय अिधकरण “ए” \u000eा यपीठ चे\u0013ई म\u0016। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI मा ननीय \u0019ी एबी टी. वक\u001e, \u000eा ियक सद\" एवं माननीय \u0019ी मनोज क ुमार अ'वाल ,लेखा सद\" क े सम)। BEFORE HON’BLE SHRI ABY T. VARKEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.2810/Chny/2024 (िनधा*रण वष* / Assessment Year: 2022-23) Madura Coats Pvt. Ltd. 35, New Jail Road, Madurai H.O., Madurai – 625 001. बनाम/ Vs. ACIT Corporate Circle-2, Madurai. \u0002थायीलेखासं./जीआइआरसं./PAN/TAN No. AABCM-8279-K (अपीलाथ\u001a/Appellant) : (\u001d\u001eथ\u001a / Respondent) अपीलाथ\u001a की ओर से/ Appellant by : Shri Nikhil (Advocate) – Ld. AR (Through Virtual Mode) \u001d\u001eथ\u001a की ओर से/Respondent by : Shri Nilay Baran Som (CIT) -Ld. DR सुनवाई की तारीख/Date of Hearing : 29-01-2025 घोषणा की तारीख /Date of Pronouncement : 03-02-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2022-23 arises out of the order of learned Addl. / Joint Commissioner of Income Tax (Appeals), Bhubaneswar [CIT(A)] dated 18-09-2024 in the matter of an intimation issued by Ld. Assessing Officer [AO] u/s. 143(1) of the Act on 29-07-2023. 2. The Ld. AR appeared virtually and submitted that the dispute has arisen only due to wrong reporting in Tax Audit Report. The Ld. AR 2 pleaded that the matter may be sent back to the file of Jurisdictional AO to verify the same. 3. It could be seen that CPC made certain adjustment to the income of the assessee for Rs.27.27 Crores on account of adjustment for ICDS as reported by Tax Auditor. Upon further appeal, Ld. CIT(A) limited the same to Rs.22.47 Crores against which the assessee is in further appeal before us. The impugned adjustment stem from reporting in Clause 14(b) of Tax Audit Report wherein Tax Auditor reported that net effect on profit on account of deviation from inventory valuation as prescribed under Sec.145A would be Rs.22.47 Crores. The Ld. CIT(A) accordingly confirmed the said adjustment. 4. The Ld. AR appeared virtually and stated that the adjustment has occurred due to wrong reporting of figures by Tax Auditor whereas the net effect of the GST component on valuation of inventories would ultimately be Nil. The Ld. AR stated that the same may be subject to verification by Jurisdictional AO. 5. Apparently, the assessee has erred in transmitting the correct data of Tax Audit Report. Upon perusal of Annexure-5 of manual Tax Audit Report as placed on Page No.514 of the paper-book, it could be seen that there would be reduction in profit to the extent of Rs.24.97 Crores due to increase of opening stock of raw material due to inclusion of GST on which credit is availed. The said figure apparently has been transmitted as Rs.2.49 Crores and hence the adjustment. As per Annexure-5, the net effect of adjustments would ultimately be Nil. Therefore, accepting the prayer of Ld. AR, we remit this issue back to the file of Jurisdictional AO for limited purpose of said verification. The assessee is directed to substantiate its claim. If there is mere 3 typographical error, the impugned adjustment as sustained by Ld. CIT(A) would stand deleted. No other ground has been urged in the appeal. 6. The appeal stand allowed for statistical purposes. Order pronounced on 3rd February, 2025 Sd/- Sd/- (ABY T. VARKEY) (MANOJ KUMAR AGGARWAL) \u000eा ियक सद\" /JUDICIAL MEMBER लेखा सद\" / ACCOUNTANT MEMBER चे2ई Chennai; िदनांक Dated : 03-02-2025 DS आदेश की Jितिलिपअ'ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u001a/Appellant 2. \u001d\u001eथ\u001a/Respondent 3. आयकरआयु;/CIT, Madurai. 4. िवभागीय\u001dितिनिध/DR 5. गाड@फाईल/GF "