DCIT, Ludhiana V. M/s Indian Sucrose Limited, Ludhiana

ITA 1061/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5094 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 07-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: RAKESH MARWAHA
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1061/CHD/2016 (ASSESSMENT YEAR : 2012-13) THE D.C.I.T., VS. M/S INDIAN SUCROSE LIMITED, CIRCLE-1, LUDHIANA. G.T. ROAD, LUDHIANA. PAN: AABCI1877K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL, DR RESPONDENT BY : SHRI RAKESH MARWAHA DATE OF HEARING : 21.06.2017 DATE OF PRONOUNCEMENT : 23.06.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(APPEALS)-1, LUDHIANA DATED 29.7.20 16 RELATING TO ASSESSMENT YEAR 2012-13. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. WHETHER UPON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS JUSTIFIED IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE MAT CREDIT AGAINST THE TAX LIABILITY PAYABLE BEFORE SURCHARGE AND EDUCATION CESS? 2. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 3. THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL RELATES TO CHARGING OF SURCHARGE AND EDUCATION CESS ON THE GROSS NORMAL TAX AFTER SUBTRACTING MAT CREDIT. 4. BRIEF FACTS LEADING TO THE PRESENT APPEAL ARE T HAT THE ASSESSMENT FOR THE IMPUGNED YEAR WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) WITHOUT GIVING ANY MAT CREDIT. SUBSEQUENTLY, AN APPLICATION FOR RECTIFICATION FOR GIVING MAT CREDIT U/S 154 WAS MADE BY THE ASSESSEE ON 9.3.2015. THE ASSESSEE CLAIMED MAT CREDIT OF RS.69,28,287/- INCLUSIVE OF S URCHARGE AND CESS IN THE ORDER PASSED U/S 154 OF THE ACT. T HE ASSESSING OFFICER GAVE CREDIT FOR MAT REPRESENTING THE BASIC TAX ONLY OF RS.44,03,539/- AND BALANCE AMOUNT OF RS.25,24,748/- BEING SURCHARGE AND EDUCATION CESS W AS NOT ALLOWED PLACING RELIANCE ON THE JUDGMENT OF THE I.T .A.T. DELHI BENCH IN THE CASE OF M/S RICHA GLOBAL EXPORTS IN ITA NO.230/DEL/2012 AND THE DECISION OF THE CIT(A)-1, LUDHIANA IN THE CASE OF M/S VARDHMAN TEXTILES LTD. IN ORDER 388/IT/CIT(A)/LDH/2014-15 DATED 28.10.2015. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT(APPEALS) WHERE THE ONLY CONTENTION RAISED BY THE ASSESSEE WAS THAT THE MAT CREDIT ALLOWED BY THE ASS ESSING OFFICER OF RS.44,03,539/- SHOULD BE SET OFF AGAINST NORMAL TAX PAYABLE FOR THE IMPUGNED YEAR BEFORE INCLUDING SURCHARGE AND CESS THEREON. THE ASSESSEE CONTENDED THAT WHILE CALCULATING THE TAX FOR THE YEAR AGAINST WHIC H MAT CREDIT WAS SET OFF, SURCHARGE AND CESS HAVE BEEN IN CLUDED 3 WHILE THE MAT CREDIT BEING ALLOWED TO BE SET OFF AG AINST THE SAME DOES NOT INCLUDE SURCHARGE AND CESS. THE LD. COUNSEL FOR ASSESSEE IN SUPPORT OF ITS CONTENTION RELIED UP ON THE DECISION OF ITAT CHANDIGARH BENCH IN THE CASE OF M/ S VARDHMAN YARNS & THREADS LTD. VS. ACIT IN ITA NOS.6 & 7/CHD/2015 DATED 12.7.2016. THE LD.CIT(A) AGREED WI TH THE CONTENTION OF THE ASSESSEE AND DIRECTED THAT MAT CR EDIT IS TO BE ADJUSTED AGAINST NORMAL TAX PAYABLE BEFORE SU RCHARGE AND CESS. 6. AGAINST THE SAID ORDER OF THE CIT(A), THE REVEN UE HAS COME UP IN APPEAL BEFORE US. 7. DURING THE COURSE OF HEARING BEFORE US, LD. DR ARGUED THAT THE LD.CIT(APPEALS) HAD ERRED IN ALLOWING SET OFF OF MAT CREDIT AGAINST THE NORMAL TAX PAYABLE BEFORE C HARGING SURCHARGE AND EDUCATION CESS. LD.AR ON THE OTHER HA ND RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY GRIE VANCE OF THE REVENUE IN THE PRESENT APPEAL IS THAT MAT CREDI T OUGHT TO HAVE BEEN ALLOWED SET OFF AFTER INCLUDING SURCHA RGE AND CESS IN THE NORMAL TAX PAYABLE. 9. WE FIND THAT THE MAT CREDIT BEING ALLOWED SETOF F REPRESENTS ONLY THE BASIC TAX PAID AND DOES NOT INC LUDE SURCHARGE AND CESS. AS PER THE ORDER PASSED BY THE ASSESSING OFFICER U/S 154 THE ASSESSEE HAS BEEN ALL OWED MAT CREDIT REPRESENTING ONLY BASIC TAX PAID AMOUNT ING TO 4 RS.44,03,539/- WHILE THE SURCHARGE AND CESS OF RS.25,24,748/- HAVE NOT BEEN ALLOWED TO BE SET OFF AGAINST THE NORMAL TAX PAYABLE. THE ASSESSEE HAS NOT FILED AN APPEAL AGAINST THIS ORDER OF THE ASSESSING OFFICER WHICH HAS THUS ATTAINED FINALITY. THUS, UNDOUBTEDLY THE MAT CREDIT IS EXCLUSIVE OF SURCHARGE AND CESS. THE NORMAL TAX PAYABLE FOR THE YEAR AGAINST WHICH THE MAT CREDIT IS BEING SET OFF INCLUDES SURCHARGE AND CESS. 10. THE ITAT CHANDIGARH BENCH IN THE CASE OF M/S VARDHMAN YARNS & THREADS(SUPRA), IN IDENTICAL SET O F FACTS HAS HELD THAT MAT CREDIT IS TO BE ALLOWED AGAINST T AX PAYABLE BEFORE SURCHARGE AND CESS. THE ITAT CHANDIG ARH BENCH IN THE SAID CASE HAS RELIED UPON THE ORDER OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF DCIT VS . VACMENT INDIA LTD., 369 ITR 304 (ALL). THE REVENUE HAS NOT POINTED OUT ANY CONTRARY DECISION OF ANY HIGH COURT IN THIS REGARD BEFORE US. FURTHER NO DISTINGUISHING FACTS HAVE BEEN BROUGHT TO OUR NOTICE VIS--VIS THE DECISION OF THE ITAT CHANDIGARH BENCH IN THE CASE OF M/S VARDHMAN YARNS & THREADS LTD. (SUPRA). WE THEREFORE FIND NO INFIRMI TY IN THE ORDER OF THE LD.CIT(APPEALS) DIRECTING THE ASSESSIN G OFFICER TO ALLOW THIS MAT CREDIT FROM THE NORMAL TAX PAYABL E EXCLUDING SURCHARGE AND CESS. 11. IN VIEW OF THE SAME, WE UPHOLD THE ORDER OF TH E LD.CIT(APPEALS) , DIRECTING THE ASSESSING OFFICER T O ALLOW MAT CREDIT BEFORE CHARGING SURCHARGE AND CESS ON TH E TAX 5 LIABILITY PAYABLE. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD JUNE, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH