Asstt.Commissioner of Income Tax, Circle-7, Nagpur V. M/s. Ferro Alloys Corpn.Ltd., Bandara

ITA 147/NAG/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3933 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 27-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILING BHUSARI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.147/NAG/2011 ASSESSMENT YEAR: 2008-2009 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-7, 5 TH FLOOR, ROOM NO.521, MECL BUILDING, SEMINARY HILLS, NAGPUR. VS M/S. FERRO ALLOYS CORPORATION LTD., SHREERAM BHAVAN, MAIN ROAD, TUMSAR, DISTT-BHANDARA. PAN: AAACF 1999 A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DR. MILING BHUSARI, CIT-DR & MR. PRAKASH MANE, JCIT RESPONDENT BY : SHRI K.P. DEWANI DATE OF HEARING: 13.3.2013 DATE OF ORDER : 05.04.2013 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 27.10.2011 IS A GAINST THE ORDER OF CIT (A)-II, NAGPUR DATED 3.8.2011 FOR THE ASSESSMENT YE AR 2008-2009. 2. IN THIS APPEAL, REVENUE RAISED THE ONLY EFFECTIVE GROUND WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) ERRED IN HOLDING THAT MAT CREDIT U/S 115-JAA SHOULD BE GRANTED BEFORE LEVY OF SURCHARGE AND EDUCATION CESS . 3. BRIEFLY STATED, THE ISSUE UNDER CONSIDERATION IS WITH REGARD TO THE MANNER OF ALLOWING MAT CREDIT U/S 115-JAA OF THE ACT, QUA THE LEVY OF SURCHARGE AND EDUCATION-CESS. THE CASE OF THE ASSESSEE IS THAT T HE MAT CREDIT HAS TO BE GRANTED FROM THE TAX COMPUTED ON TOTAL INCOME BEFORE LEVYIN G SURCHARGE AND EDUCATION-CESS. IN THIS REGARD, ASSESSEE RELIED ON THE PROVISIONS OF SECTION 115-JAA(2) OF THE ACT. THE CASE OF THE REVENUE IS SUCH CREDIT SHOULD BE GI VEN AFTER LEVYING SURCHARGE AND EDUCATION-CESS ON THE TAX COMPUTED ON THE TOTAL INC OME. IN THIS REGARD, DURING THE PROCEEDINGS BEFORE US, LD COUNSEL BROUGHT TO OUR NO TICE, THE CONTENTS OF PARA 5 AND MENTIONED THAT THE PLAIN READING OF SUB-SECTION (2) OF SECTION 115-JAA VINDICATES THE 2 STAND OF THE ASSESSEE. FURTHER, TO SUPPORT THE ABO VE LINE OF COMPUTATION, LD COUNSEL BROUGHT TO OUR NOTICE THE CONTENTS OF THE RETURN OF INCOME RELATING TO PART-B, TTI WITH THE COMPUTATION OF TAX LIABILITY ON TOTAL INCOME, WHERE THE SL NO.1 TO SL.NO. 10 OF PART-B, TTI IS TO BE LEVIED ON ONLY ONE ITEM NO.7, RELATING TO BALANCE OF TAX PAYABLE AND THE BALANCE IS WORKED OUT AFTER REDUCING THE REBATE U/S 88E OUT OF TAX PAYABLE AFTER CREDIT U/S 115-JAA. THE CONTE NTS OF THE SAID PART-B, TTI ARE READ AS UNDER: 1. TAX PAYABLE ON DEEMED TOTAL INCOME UNDER SECTIO N 115-JB (7 OF SCHEDULE MAT) 2. TAX PAYABLE ON TOTAL INCOME IN ITEM 11 OF PART-B -TI A. TAX AT NORMAL RATES 2A B. TAX AT SPECIAL RATES (11 OF SCHEDULE-SI) 2B C. TAX PAYPABLE ON TOTAL INCOME IN ITEM 11 OF PART -B, TI (2A+2B) 2C 3. GROSS TAX PAYABLE (ENTER HIGHER OF 2C AND 1) 3 4. CREDIT UNDER SECTION 115JAA OF TAX PAID IN EARLI ER YEARS (IF 1 IS MORE THAN 2C) 4 5. TAX PAYABLE AFTER CREDIT UNDER SECTION 115JAA [3 -4] 5 6. REBATE UNDER SECTION 88E (4 OF SCHEDULE-STTR) 6 7. BALANCE TAX PAYABLE (5-6) 7 8. SURCHARGE ON 7 8 9. EDUCATION CESS, INCLUDING SECONDARY AND HIGH EDU CATION CESS ON (7+8) 9 10. GROSS TAX LIABILITY (7+8+9) 10 4. FURTHER, HE ALSO BROUGHT OUR ATTENTION TO THE INTIMATION ISSUED BY THE DEPARTMENT U/S 143(1) OF THE ACT, WHICH AGAIN PROVI DES CONSEQUENCE OF COMPUTATIONAL STEPS IN THE FOLLOWING ORDER. TAX ON TOTAL INCOME @ 30% RS. 17,44,09,638/- LESS: MAT CREDIT U/S 115JAA RS. 3,08,65,271/- TAX PAYABLE (AS PER COLUMN IV THE INTIMATION) RS. 14,35,44,367 /- SURCHARGE @ 10% RS. 1,43,54,437/- EDUCATION CESS @ 3% RS. 47,36,964/- TOTAL TAX PAYABLE RS. 16,44,87,308/- 5. ON PERUSAL OF THE ABOVE, FURTHER, WE HAVE EXAMIN ED THE CONTENTS OF PARA 5 WHICH IS REPRODUCED HERE UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PROVISIONS OF SECTION 115JAA OF THE IT ACT. IT IS SEEN THAT MAT CREDIT S HOULD BE GRANTED BEFORE LEVY OF SURCHARGE AND EDUCATION CESS. SECTION 115JAA(2) READS AS FOLLOWS: THE TAX CREDIT TO BE ALLOWED UNDER SUB-SECTION (1) SHALL BE THE DIFFERENCE OF THE TAX PAID FOR ANY ASSESSMENT YEAR UNDER SUB-SECT ION (1) OF SECTION 115JA AND THE AMOUNT OF TAX PAYABLE BY THE ASSESSEE ON HI S TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE OTHER PROVISIONS OF THIS ACT . 3 HENCE, IT IS CLEAR THAT THE CREDIT IS TO BE ALLOWED OUT OF TAX PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF THE IT ACT, 1961 AND SURCHARGE HAS TO BE CALCULATED ON THE BALANCE TAX PAYABLE IF ANY AS PER RELEVANT FIANCE ACT OF A PARTICULAR YEAR. EVEN IN THE ITR FORM, COLUMN 8 OF THE FORM PROVIDES THAT SURCHARGE HAS TO BE CALCULATED AFTER REDUCING TAX C REDIT U/S 115JAA OF IT ACT, 1961. THEREFORE, THE ADDITIONS MADE BY THE AO IS H EREBY DIRECTED TO BE DELETED TO THE EXTENT THAT FIRST THE SET OFF OF TAX PAID HAS TO BE GIVEN AS PER SCHEME OF THINGS UNDER THE ACT AND RELEVANT ITR FOR M BEFORE LEVYING SURCHARGE AND EDUCATION CESS. 6. THE COMBINED READING OF ALL THE THREE EXTRACTS A BOVE, WE FIND THAT THE SAID CONCLUSIONS ARRIVED AT BY THE CIT (A) ARE IN ORDER AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND RAISED BY THE RE VENUE IS DISMISSED . 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF APRIL, 2013. SD/- SD/- (R.K. GUPTA) (D. KARUNAKAR A RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 05.4.2013 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR NAGPUR, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI