Caspian Impact Investments Private Ltd Vs DCIT (ITAT Hyderabad)
Assessee, engaged in impact investment activities, originally filed ROI on 30.10.2019 declaring ₹10.76 crore under normal provisions & ₹11.28 crore u/s 115JB. After NCLT-approved demerger of debt division from Caspian Impact Investment Advisors Pvt. Ltd., a second revised ROI was filed on 30.09.2020 declaring ₹8.58 crore under normal provisions & ₹8.42 crore u/s 115JB. CPC processed return u/s 143(1)(a) on 09.03.2021, making three adjustments – ₹1.64 lakh u/s 36(1)(iii), ₹13.22 lakh u/s 37(1) & ₹10.41 lakh u/s 43B. CIT(A) confirmed all additions.
On further appeal, Tribunal found:
Section 37(1): The “loss on sale of fixed assets” of ₹13.22 lakh had already been suo motu disallowed by Assessee in computation. CPC’s action resulted in double disallowance, which was unsustainable.
Section 43B: The ₹10.41 lakh provision stood in books of demerged company as on 01.04.2018 & got transferred under NCLT demerger scheme. Since no fresh provision was created in AY 2019-20, invoking s.43B was invalid. Such carried-forward liability could not trigger addition in current year.
Tribunal thus directed deletion of both additions. On Assessee’s legal plea that CPC exceeded scope of 143(1)(a), ITAT held the issue academic after deleting additions on merits. Accordingly, the appeal was allowed in full.
