2026 (7) TMI 41

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....rath Rao, CA For the Revenue : Sri N. Balusamy- JCIT DR ORDER PER PRASHANT MAHARISHI, VICE - PRESIDENT 1. This appeal in ITA No. 330/Bangalore/2026has been filed by LKQ India Private Limited [ "the assessee/ Appellant] against the appellate order dated 14 November 2025 passed by the Joint Commissioner of Income Tax (Appeals)-9, Mumbai ["the learned CIT(A)"] for assessment year 2021-22.....

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....t reported in clause 16(B) of Form 3CD. The assessee objected to the proposed adjustment on 6 June 2022, stating that it follows the exclusive method of accounting. Under this method, GST paid on purchases or expenses is not debited to the profit and loss account but is recorded separately as GST refund receivable as loan and advances. Therefore, the refund of Rs. 2,34,40,921 was neither credited ....

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....us, the learned authorised representative reiterated the submissions made before the lower authorities. He submitted that the assessee follows the exclusive method of accounting, under which GST or service tax paid on purchases and expenses is not debited to the statement of profit and loss but is recorded as an asset under GST refund receivable. Consequently, the refund of Rs. 2,34,40,921 receive....

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.... Rs. 2,34,40,921 was not credited to the profit and loss account; however, it does not state that the amount is taxable under section 28 or otherwise. During processing, the Central Processing Centre treated this as an inconsistency because the amount credited to the profit and loss account was shown as nil, whereas Form 3CD reported Rs. 2,34,40,921. The assessee explained that, since GST was not ....