M/s.Tricon Infotech Pvt. Ltd., Bangalore V. Asst. Commissioner of Income Tax, Bangalore

ITA 1304/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7536 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R N PARBAT
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B E NGAL U R U BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 1304 / BANG/20 16 (ASSESSMENT YEAR: 20 12 - 13) M/S.TRIC ON INFOTECH PVT. LTD. NO.5, AVS COMPOUND, 80 FT. ROAD, 4 TH BLOCK, KORAMANGALA, BENGALURU. PAN:AAACT 5424 G VS. APPELLANT ASST. COMMISSIONER OF INCOME - TAX, CPC, BENGALURU. RESPONDENT APPELLANT BY : SHRI SANDEEP C, CA RESPONDENT BY : SHRI R.N.PARBAT, CIT(DR) DAT E OF HEARING : 25/09/2017 DATE OF PRONOUNCEMENT : 28 /09/2017 O R D E R PER I NTURI RAMA RAO, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) - 7 [ CIT(A) FOR SHORT ] , BANGALORE, D ATED 16/05/2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ASSESSEE RAISED THE FOLLOWING THE GROUNDS OF APPEAL AND ADDITIONAL GROUND: ITA NO . 1304 /BANG/201 6 PAGE 2 OF 5 3. BRIEFLY FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF T HE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF DEVELOPMENT AND EXPORT OF SOFTW A RE . RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 WAS FILED ON 29/09/2012 DECLARING TOTAL INCOME OF RS.2,48,72,280/ - . TAX PAYABLE UNDER NORMAL PROVISIONS WAS MOR E THAN TAX PAYABLE U/S 115JB OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. THE ASSESSEE HAD CARRIED FORWARD MAT CREDIT OF RS.34,70,424/ - FROM EARLIER YEARS. THEREFORE, THE ASSESSEE CLAIMED MAT CREDIT UTILIZATION FOR THE YE AR OF RS.30,19,380/ - . IN THE INTIMATION ISSUED UNDER THE PROVISIONS OF SECTION 143(1), MAT CREDIT OF RS.27,91.847/ - WAS ALLOWED. THE DIFFERENCE OF MAT CLAIMED AND ALLOWED BY THE ASSESSING OFFICER [AO] IS AS UNDER: ITA NO . 1304 /BANG/201 6 PAGE 3 OF 5 THUS, THERE WAS SHORT CREDIT OF RS.2,2 7,533/ - . 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE CIT(A) WHO, VIDE IMPUGNED ORDER, AFTER PLACING RELIANCE ON THE DECISION OF THE MUMBAI BENCH OF TRIBUNAL IN THE CASE OF CLASSIC SHARES & STOCK BROKING SERVICES LTD. , IN ITA NO.5869/MUM/2007 CONFIRMED THE METHOD OF WORKING OUT MAT CREDIT UTILIZATION AS DONE BY THE AO AND DISMISSED THE APPEAL. 5. BEING AGGRIEVED, THE ASSESSEE IS BEFORE US IN THE PRESENT APPEAL. LEARNED AR OF THE ASSESSEE VEHEMENTLY CONTENDED THAT THE AMOUNT OF MAT CREDIT UTILIZATION SHOULD BE ARRIVED AT AFTER INCLUDING SURCHARGE AND EDUCATION CESS WHILE COMPUTING DIFFERENCE BETWEEN TAX LIABILITY UNDER NORMAL PROVISIONS AND TAX LIABILITY UNDER PROVISIONS OF SECTION 115JB OF THE ACT. IN THIS CONNECTION, HE RELIED ON THE DEC ISION OF THE HON BLE APEX COURT IN THE CASE OF CIT VS. K.SRINIVASAN ( 83 IR 346 ) AND CO - ORDINATE BENCH DECISION OF MUMBAI BENCH IN THE CASE OF DCIT VS. GODREJ PALM OIL LTD. IN ITA NO.5098/BANG/2013 DATED 14/01/2015, DECISION OF HYDERABAD BENCH OF TRIBUNAL IN THE CASE OF ITA NO . 1304 /BANG/201 6 PAGE 4 OF 5 M/S.VIRTUSA (INDIA) PVT. LTD. VS. DCIT IN ITA NO.146/HYD/2015 DATED 04/03/2016. ON THE OTHER HAND, LEARNED CIT(DR) VEHEMENTLY CONTESTED THAT IN ACCORDANCE WITH FORM ITR 6, MAT CREDIT UTILIZATION SHOULD BE ALLOWED BEFORE CALCULATING SURCHARG E AND CESS. IN THIS REGARD, HE PLACED RELIANCE ON THE FORM OF RETURN OF INCOME WHEREIN MAT CREDIT UTILIZATION WAS ALLOWED BEFORE SURCHARGE AND CESS. 6. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT APPEAL, THE ONLY ISS UE IS WHETHER MAT CREDIT UTILIZATION SHOULD BE DIFFERENCE BETWEEN AMOUNT OF TAX LIABILITY INCLUSIVE OF SURCHARGE AND CESS OR EXCLUSIVE OF SURCHARGE AND CESS. THERE IS NO DISPUTE AS TO THE AMOUNT AVAILABLE ON MAT CREDIT. THE DISPUTE IS ONLY WITH REGARD TO MAT CREDIT UTILIZATION AMOUNT. IN VIEW OF LAW LAID DOWN BY THE HON BLE APEX COURT IN THE CASE OF K.SRINIVASAN (SUPRA) THAT TAX INCLUDES SURCHARGE AND CESS , T HE RIGHT COURSE WOULD BE TO CALCULATE DIFFERENCE BETWEEN TAX LIABILITY UNDER NORMAL PROVISIONS A ND SEC.115JB INCLUSIVE OF SURCHARGE AND CESS . IT MAY BE NOTED THAT THE FORM PRESCRIBED UNDER RESPECTIVE RULES CANNOT OVERRIDE THE LAW OF THE LAND AND SUBSTANTIVE PROVISIONS OF THE ACT. THEREFORE, IN OUR CONSIDERED OPINION, MAT CREDIT UTILIZATION SHOULD B E THE DIFFERENCE BETWEEN TAX LIABILITY INCLUSIVE OF SURCHARGE AND CESS UNDER NORMAL PROVISIONS AND THE TAX LIABILITY U/S 115JB INCLUSIVE OF SURCHARGE. THEREFORE, THE CONTENTIONS RAISED BY THE ASSESSEE ARE ACCEPTABLE. ITA NO . 1304 /BANG/201 6 PAGE 5 OF 5 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER, 201 7 SD/ - SD/ - (VIJAY PAL RAO) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : B EN GAL URU D A T E D : 28 /0 9 /2017 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE