Mahika Infra LLP Vs. ITO

Parties Involved

Facts Summary

The assessee, Mahika Infra LLP, engaged in real estate development, filed an appeal against the order of the Commissioner of Income-tax (Appeals) for Assessment Year 2022-23. The assessee contested the addition of Rs. 3,49,70,906/- made by the Assessing Officer, primarily on the grounds of GST reversal. The assessee had reversed Input Tax Credit (ITC) attributable to unsold units upon receiving Building Use (BU) Permission for its residential project. The assessee argued that the reversal was a mandatory statutory cost under the GST law and should be allowed as business expenditure. The Commissioner of Income-tax (Appeals) upheld the addition, leading to the present appeal before the Tribunal.…

Legal Issues

• 1. Whether the GST Input Tax Credit Reversal of Rs. 2,64,11,386/- is allowable as business expenditure under section 37(1) of the Act.
• 2. Whether the GST Input Tax Credit Reversal of Rs. 85,59,538/- is allowable as business expenditure under section 37(1) of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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