What did the Tribunal hold?

The Tribunal set aside the order of the CIT(A) and restored the matter to the Assessing Officer (AO). The AO was directed to verify the assessee's contention that the input tax credit was not claimed as an expense and grant relief if admissible.

The assessee received an IGST refund which was taxed as income by the CPC. The assessee argued that the input tax credit used for the refund was never claimed as an expense, thus the refund should not be taxed.

What were the issues?

Whether an IGST refund is taxable as income when the underlying input tax credit was not claimed as an expense by the assessee.

M.Next Naturals LLP vs ITO | ITAT Ahmedabad 2026

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: Shri Sanjay Garg

For Appellant: Shri Bhavik Nagori, AR

Hearing: 23/07/2026Pronounced: 30/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] Before Shri Sanjay Garg, Judicial Member आयकर अपील सं /ITA No.1088/Ahd/2026 िनधा"रण वष" /Assessment Year : 2024-25 M Next Naturals LLP, ITO Singhi House, 2nd Floor, 1-Magnet बनाम/ Ward-4(1)(1), v/s. Corporate Park, Thaltej, Ahmedabad Ahmedabad-380059 "थायी लेखा सं./PAN: ABVFM2796F (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee by : Shri Bhavik Nagori, AR Revenue by : Shri Amit Pratap Singh, Sr. DR सुनवाई की तारीख/Date of Hearing : 23/07/2026 घोषणा की तारीख /Date of Pronouncement: 30/07/2026 आदेश/O R D E R The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), ADDL/JCIT(A)-11, Mumbai [hereinafter referred to as ‘Ld. CIT(A)’] dated 28/01/2026 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2024- 25. 2. The assessee has raised the following grounds of appeal:

“1. The Ld. CIT Appeals has erred in law and in facts by confirming addition of Rs. 10,91,320/- of refund received on account of IGST refund as income of assessee even though Input tax credit paid for payment of IGST was never claimed as expense during the relevant assessment year. 2. The appellant humbly pray to set aside the case to the file of Ld. CIT appeals by admitting additional evidences filled under Rule 29 of Income Tax (Appellate Tribunal) Rules, 1963. 3. The appellant humbly craves liberty to add, amend or delete any of the grounds of appeal before or during the course of hearing of appeal.” M Next Naturals LLP vs. ITO Asst.Year 2024-25

At the outset, the Ld. Counsel for the assessee has submitted that the assessee is involved in the business of export of fruit pulp. That GST is not leviable on such export of fruit pulp. However, the assessee had incurred certain expenditure as input tax credit, which was later on refunded by the GST Department. The CPC while processing the return of income u/s 143(1) of the Act as taxed the said GP refund.

The assessee preferred appeal before the CIT(A), however, the same remained unrepresented and therefore, the impugned addition made by the Assessing Officer/CPC (in short “the AO”) was confirmed by the CIT(A).

At the outset, the Ld. Counsel for the assessee has submitted that the assessee had not claimed any deduction/expenditure in respect of input tax credits earlier paid to the GST Department and therefore, no tax was leviable on the refund of the same. This issue can be verified by the AO. Therefore, the impugned order of the CIT(A) is set-aside. The matter is restored to the file of the AO to verify the aforesaid contention and give relief to the assessee, if so found admissible.

With the above observations, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the Open Court on 30/07/2026. (Sanjay Garg) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 30/07/2025 Tanmay, Sr. P.S.ITA No.1088/Ahd/2026 M Next Naturals LLP vs. ITO Asst.Year 2024-25

आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant 2. ""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु" अपील ( ) / The CIT(A)-(NFAC) 5. िवभागीय "ितिनिध आयकर अपीलीय अिधकरण अहमदाबाद /DR,ITAT, Ahmedabad. , , 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, सहायक पंजीकार (Asstt.

M.NEXT NATURALS LLP,AHMEDABAD vs. INCOME TAX OFFICER WARD 4(1)(1), AHMEDABAD

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Which sections of the Income-tax Act were involved?

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