What did the Tribunal hold?

The Tribunal held that a GST refund, representing excess GST paid, is not a taxable receipt and should not be credited to the profit and loss account. Therefore, the addition made by the AO and confirmed by the JCIT(A) was unjustified.

The assessee received a GST refund of Rs. 1,84,000 which was previously paid in excess. The tax auditor noted this refund was not credited to the profit and loss account. The CPC made an addition of this amount, which was confirmed by the JCIT(A).

What were the issues?

Whether a GST refund received by the assessee is a taxable receipt and can be added to income. Whether the JCIT(A) was justified in confirming the addition of the GST refund.

Abhay Parmar, Agra vs ITO | s.143(1) | ITAT Agra 2026

Income Tax Appellate Tribunal, AGRA BENCH “SMC”: AGRA

For Appellant: Shri Puneet Agarwal, CA

For Respondent: Shri Anil Kumar, Sr. DR

Hearing: 19/05/2026Pronounced: 02/06/2026

INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “SMC”: AGRA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER

ITA No. 200/AGR/2026 (Assessment Year: 2024-25) Abhay Parmar, Vs. ITO, 37/A/ID/P 30, Phool Ward-2(1)(1), Bagh, Madhu Nagar, Agra, Agra UP (Appellant) (Respondent) PAN: ABFPP2825G Assessee by : Shri Puneet Agarwal, CA Revenue by: Shri Anil Kumar, Sr. DR Date of Hearing 19/05/2026 Date of pronouncement 02/06/2026

O R D E R 1. The appeal in ITA No. 200/AGR/2026 for AY 2024-25, arises out of the order of the ADDL/JCIT(A)-1, Hyderabad [hereinafter referred to as ‘ld. JCIT(A)’, in short] dated 25.02.2026 against the order of assessment passed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 17.12.2025 by the Assessing Officer, CPC, Bengaluru (hereinafter referred to as ‘ld. AO’).

The only effective issue to be decided in this appeal is as to whether the JCIT(A) was justified in confirming the addition made on account of GST refund received by the assessee in the facts and circumstances of the instant case.

I have heard the rival submissions and perused the material available on record. The assessee filed his income tax return for AY 2024-25, declaring taxable income of Rs. 5,84,640. The books of account of the assessee was subjected to audit. The assessee has been filing the returns with the GST

ITA No. 200/AGR/2026 Abhay Parmar

Authorities regularly. During the year under consideration, the assessee got a refund of GST of Rs. 1,84,000/- which it had originally paid in excess. This figure was reported by the Tax Auditor in Column 16 b of the tax audit report stating that the GST refund figure is not credited to profit and loss account. This was picked up by the ld CPC while preparing the intimation u/s 143(1) of the Act and addition of Rs. ₹1,84,000/- was made thereon. Before the appellate authority, the assessee submitted that GST receivable was shown in asset side of the balance sheet and it only represents excess GST actually paid by the assessee earlier to the GST authorities, which was sought to be claimed as refund. The GST authorities after examining the claim of the assessee had found the contentions of the assessee to be correct and had granted refund of Rs. 1,84,000/-. This receipt of GST refund was directly credited by the assessee in the asset side of the balance sheet and is not required to be routed in the profit and loss account of the assessee at all, as it does not partake the character of taxable receipt per se. This fact is not appreciated by the ld JCIT(A) who simply sustained the addition of the ld AO.

I am thoroughly convinced with the explanation given by the assessee and refund of GST from GST Authorities cannot be construed to have any character of taxable receipt and I have no hesitation in directing the ld AO to delete the addition made in the sum of Rs. 1,84,000/-. Accordingly, grounds raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 02/06/2026.

-Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated:02/06/2026

ITA No. 200/AGR/2026 Abhay Parmar

A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, AGRA BENCH

ABHAY PARMAR,AGRA vs. ITO, AGRA

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