ITAT allowed the appeal of Assessee X and deleted the addition...

ITAT allowed the appeal of Assessee X and deleted the addition made u/s 41(1) treating it as profit chargeable to tax. ITAT found that the amount in question had already been credited to the profit and loss account under "Other Income" and duly disclosed in the return of income (ITR-6) under "Any other income," forming part of the total income declared. The auditor's reporting in the tax audit report was held to be merely for disclosure, without any indication that the amount required further addition. ITAT held that the adjustment made by CPC and sustained by CIT(A) resulted in a double addition. AO was directed to delete the disallowance and correctly allow carry forward of loss.