IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1027/PUN/2025 िनधा(cid:6981)रण वष(cid:6981) / Assessment Year : 2014-15 M/s. Fiat India Automobil e s Vs. ACIT, Circle-1(1), Pune.

Private Limited, B-19, Ranjangaon, MIDC Industrial Area, Ranjangaon, Taluka- Shirur, Pune- 412220.

PAN : AAACF1716D Appellant Respondent आयकर अपील सं. / ITA No.1098/PUN/2025 िनधा(cid:6981)रण वष(cid:6981) / Assessment Year : 2014-15 DCIT, Circle-1(1), Pune. Vs. M/s. Fiat India Automobiles Private Limited, B-19, Ranjangaon, MIDC Industrial Area, Ranjangaon, Taluka-

Shirur, Pune- 412220. PAN : AAACF1716D Appellant Respondent Assessee by : Shri Percy Pardiwalla Revenue by : Shri Amol Khairnar Date of hearing : 03.12.2025 Date of pronouncement : 08.01.2026 आदेश / ORDER PER VINAY BHAMORE, JM:

These cross appeals filed by the assessee as well as by the Revenue are directed against the order dated 07.02.2025 passed by Ld. CIT(A), Pune-13 [‘Ld. CIT(A)’] for the assessment year

2014-15 respectively.

2. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacturing and selling of passenger cars, engine and gearbox and has furnished its return of income on 27.11.2014 declaring loss at Rs.Nil after setting off of losses of Rs.22,68,34,573/-. Scrutiny assessment u/s 143(3) r.w.s. 144C(1) of the IT Act was completed on 23.12.2017 after making addition of Rs.3,08,92,38,550/- and setting off of brought forward losses of Rs.3,31,61,06,544/- determining income at Rs.Nil. The assessed income was taxed u/s 115JB of the IT Act. Subsequently, the Assessing Officer issued notice u/s 154 of the IT Act and proposed to rectify the assessment order dated 23.01.2017 passed u/s 143(3) r.w.s. 144C(1) of the IT Act. Since according to the calculation of the Assessing Officer, the assessee has no brought forward loss available to adjust from book profits in MAT provisions, however the assessee company reduced business loss of Rs.139 crores from business profits as per clause 3 of Explanation below section

115JB(2) of the IT Act.

3. After considering the submissions of the assessee, the Assessing Officer passed the rectification order dated 31.03.2022 u/s 154 r.w.s. 143(3) of the IT Act and determined deemed total income u/s 115JB of the IT Act at Rs.2,39,02,89,117/- and raised a demand of Rs.40,68,51,701/- as against Nil demand raised in the original assessment order.

4. Being aggrieved with the above rectification order dated 31.03.2022 passed u/s 154 of the IT Act, the assessee preferred an appeal before Ld. CIT(A). After considering the reply of the assessee, Ld. CIT(A) vide order dated 07.02.2025 partly allowed the appeal filed by the assessee & remanded the matter back to the file of the assessing officer to recompute the book profit by observing as under :-

“4.3 Findings and Reasons I have carefully perused and considered the facts of the case, arguments of the AO and contentions, submissions, including the evidences and case-laws furnished by the appellant.

This ground relates to the adjustment of entire loss of Rs. 300 crores from the brought forward loss without taking into account that there was unabsorbed depreciation which, according to the appellant, ought to have been considered by the Assessing Officer.

The Assessing Officer has also noted that the working done by the company is not based or supported by any provision, rule or circular/instruction.

The AO in his calculation of the book profit of the appellant, in absence of any specific methodology prescribed under the Act, resorted to the sound basis of 'First-in, First-out' (FIFO) method as is done in the case of calculation of capital gains under the Act, in addition it being a recognised accounting principle. Therefore, the AO, in the process of calculation of correct book profit on account of reduction in capital applied the FIFO principle to the business loss which firs