Business Loss in "Loss of current year to be carried forward” not Computed in Total Income: ITAT allows Fab India's appeal [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed Fab India’s appeal recently and held that business loss in “loss of current year to be carried forward” has not been computed in total income.

The facts are that the assessee, Fab India Ltd., filed return of income declaring total income as nil on 12.03.2022 and while processing the return the CPC, Bangalore disallowed expenditure indicated but have not taken it into account while computing the total income. The assessee before the Commissioner of Income Tax (Appeals) [CIT(A)] contended that the CPC erred in not including the current year business loss despite it being under “Loss of current year to be carried forward” in Schedule “CFL” of the audit report.

The CIT(A) noted that the AO allowed the claim of excess provision written back under Section 41 of the Income Tax Act, 1961 and did not allow the balance loss to be carried forward. The assessee appealed before the ITAT against the order of CIT(A) for not remitting the matter back to the AO for allowing the interest on refund under Section 244A.

The Tribunal opined that the AO computed interest under Section 244A against the refund issued as had been noted by the CIT(A). The bench of Sanjay Awasthi (Accountant Member) and Mahavir Singh (Vice President) allowed the appeal and directed the AO to allow excess refund with interest till the date of actual grant of refund, instead of the date of determination of refund.

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