Tanyo Exports Pvt Ltd Vs DCIT (ITAT Mumbai)
In Tanyo Exports Pvt Ltd v. DCIT, the Income Tax Appellate Tribunal examined the taxability of IGST refund on export sales added during return processing. The assessee, engaged in manufacturing and export of garments, filed its return for AY 2024–25 declaring income of ₹3.10 crore. The return was processed under section 143(1), wherein additions were made for duty drawback and IGST refund on export sales based on disclosures in Clause 16(b) of the tax audit report, increasing assessed income. A rectification application under section 154 was rejected by CPC. On appeal, the CIT(A) deleted the duty drawback addition entirely and partly deleted the IGST refund addition, sustaining it to the extent of the amount received in the subsequent year.
Before the Tribunal, the assessee contended that IGST paid on exports was never debited to the Profit and Loss Account and that refunds represented mere recovery of taxes paid, not income. It produced additional evidence in the form of an IGST Refundable Ledger for the relevant period, showing accounting through balance sheet ledgers. The Tribunal noted that this ledger required factual verification and had not been examined earlier. Considering the limited dispute on IGST refund and the need for verification of the newly produced ledger, the Tribunal restored the matter to the file of the Jurisdictional Assessing Officer for limited verification, with directions to provide an opportunity of hearing. The appeal was allowed for statistical purposes.
