WMS Gaming Solutions India Pvt. Ltd.., Pune V. Assistant Commissioner of Income-tax,

ITA 153/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7729 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-08-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 05-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAMOD N JADHAV
• Keywords: Deemed to accrue or arise in india
• Section: 143(3); 115JB; 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 153/PUN/2015 / ASSESSMENT YEAR 2012-13 WMS GAMING SOLUTIONS INDIA PRIVATE LIMITED, COMMERCE ZONE, BUILDING NO.1, LEVEL 4 & 5, OFFICE NO.402 & 501, SAMRAT ASHOK PATH, OFF AIRPORT ROAD, YERAWADA, PUNE 411 006 PAN : AAACW9659R . / APPELLANT V/S ACIT , CPC, BANGALORE (JURISDICTIONAL ASSESSING OFFICER), WARD-12(4), PARPTIKAR SADAN ANNEX. BUILDING, KARVE ROAD, PUNE 411004 . / RESPONDENT ASSESSEE BY : SHRI PRAMOD N. JADHAV REVENUE BY : SHRI AJAY MODI, JCIT / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-I, PUNE, DATED 01-10-2014 FOR THE ASSESSMENT YEAR 2012-13. 2. THE ISSUE RAISED IN THE GROUNDS OF THE ASSESSEE RELATES TO GRANT OF MAT CREDIT UTILIZATION INCLUDING THE SURCHARGE AND EDUC ATIONAL CESS COMPUTED UNDER THE NORMAL PROVISIONS OF THE INCOME TAX ACT, 1961. / DATE OF HEARING :09.08.2017 / DATE OF PRONOUNCEMENT: 18.08.2017 2 ITA NO.153/PUN/2015 WMS GAMING SOLUTIONS INDIA PVT. LTD., 3. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS A COMPANY ENGAGED IN THE BUSINESS OF PROVIDING SOFTWARE SOLUTION. IT FI LED ITS RETURN OF INCOME ON 29-11- 2012 DISCLOSING TAXABLE INCOME OF RS.2,90,05,050/- AND CLAIMING A REFUND OF RS.7,32,940/-. ASSESSEE CLAIMED MAT CREDIT INCLUDI NG SURCHARGE AND EDUCATIONAL CESS. AO DID NOT ALLOW THE SAME. 4. LD. COUNSEL FOR THE ASSESSEE NARRATING THE FACTS OF THE CASE SUBMITTED THAT IN THE ASSESSMENT PROCEEDINGS, THE AO DID NOT GIVE MAT CREDIT TOWARDS SURCHARGE AND EDUCATIONAL CESS COMPUTED UNDER THE NORMAL PROV ISIONS OF THE ACT. CIT(A) CONFIRMED THE SAME RELYING ON THE ORDER OF DELHI BE NCH OF THE TRIBUNAL IN THE CASE OF RICHA GLOBAL EXPORTS PVT. LTD VS. ACIT REPORTED IN 25 TAXMANN.COM 1. THE CONTENTS OF PARA NO.3.2.3 ARE RELEVANT. HOWEVER, R ELYING ON THE ORDER OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DAR AL-HANDASA H CONSULTANTS VS. ACIT IN ITA NO.151/PUN/2015 ORDER DATED 30-11-2016, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PUNE BENCH IN THE ABOVE CASE HAS AN OCCASION TO DECIDE AN IDENTICAL ISSUE TO THE PRESENT CASE UNDER CONSIDERA TION, VIDE GROUND NO.3 OF THE SAID APPEAL. 5. WE HEARD BOTH THE SIDES. WE HAVE ALSO GONE THRO UGH THE ORDER OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DAR AL-HA NDASAH CONSULTANTS WHICH WAS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THE TRIBUNAL VIDE DISCUSSION GIVEN IN PARA NOS. 10 TO 12 HAS DECIDED AN IDENTICAL ISSUE AND DIRECTED THE AO TO GRANT MAT CREDIT INCLUDING SURCHARGE AND EDUCATIONAL CESS. FOR THE SAKE OF COMPLETENESS, THE CONTENTS OF RELEVANT ARE EXTRACTED AS UNDER : 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE RECORD. THE SHORT ISSUE WHICH ARISES BEFORE US IS IN RELATION TO COMP UTATION OF TAXES AS PER NORMAL PROVISIONS OF THE ACT AND THE ALLOWANCE OF MAT CRED IT. THE ASSESSEE WAS FOUND TO BE ELIGIBLE FOR PAYMENT OF TAXES UNDER NORMAL PROVI SIONS OF THE ACT SINCE THE TAXES AS PER MAT PROVISIONS WERE ON LOWER SIDE. THE ASSES SEE CLAIMED THAT MAT CREDIT OF RS.1,48,62,655/- SHOULD BE ALLOWED TO THE ASSESS EE AND THE ASSESSING OFFICER ON THE OTHER HAND, WHILE PROCESSING THE RETURN OF I NCOME UNDER SECTION 143(1) OF 3 ITA NO.153/PUN/2015 WMS GAMING SOLUTIONS INDIA PVT. LTD., THE ACT ALLOWED MAT CREDIT AT NIL AND THEREAFTER UN DER SECTION 154 OF THE ACT TO THE EXTENT OF RS.1,37,42,631/- I.E. WITHOUT SURCHAR GE AND EDUCATION CESS. THE CIT(A) WAS OF THE VIEW THAT MAT PAYABLE UNDER SECTI ON 115JAA OF THE ACT WAS ONLY INCOME TAX AND IT DOES NOT INCLUDE SURCHARGE O R EDUCATION CESS. IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY DELHI BENCH OF TRIBUNAL IN RICHA GLOBAL EXPORTS PVT. LTD. VS. ACIT (SUPRA). SI MILAR ISSUE OF ALLOWANCE OF TAX CREDIT FOR TAX PAID ON DEEMED INCOME I.E. COMPUTATI ON OF ELIGIBLE MAT CREDIT AROSE BEFORE THE HYDERABAD BENCH OF TRIBUNAL IN VIRTUSA ( INDIA) (P) LTD. VS. DCIT (2016) 157 ITD 1160 (HYD). THE HYDERABAD BENCH OF TRIBUNAL HELD THAT THE TAX LIABILITIES FOR NORMAL PROVISIONS AS WELL AS MAT TO BE CALCULAT ED WITH SURCHARGE AND EDUCATION CESS AND THE ASSESSEE WAS ENTITLED TO TOT AL MAT CREDIT ADJUSTMENTS I.E. AGAINST TAXES AND SURCHARGE AND CESS. IN THIS REGAR D, REFERENCE WAS MADE TO SUB- SECTION (5) TO SECTION 115JAA OF THE ACT I.E. FOR S ETTING O FF IN RESPECT OF BROUGHT FORWARD TAX CREDIT AND IT WAS HELD THAT THE TERM US ED 'TAX' INCLUDED SURCHARGE AND IT WAS HELD AS UNDER:- '9.6 THE TAX LIABILITIES FOR NORMAL PROVISIONS AS W ELL AS MAT ARE CALCULATED WITH SURCHARGE AND CESS. THE MAT CREDIT IN ROW '7' ARE CALCULATED AUTOMATICALLY USING THE PRESCRIBED ALGORITHM, THIS IS NOTHING BUT BALANCING FIGURE I.E., THE DIFFERENCE BETWEEN TAX LIABILITY A S PER NORMAL PROVISIONS AND MAT PROVISIONS. BOTH THE ABOVE TAX LIABILITIES ARE CALCULATED WITH SURCHARGE AND CESS. THESE ARE THE STANDARD FORMAT, WHICH ARE EXPECTED TO BE FOLLOWED BY ALL THE ASSESSEES AND ALSO IMPORTANT TO NOTE THAT THE ABOVE FORMAT OF ITR 6 WAS AMENDED W.E.F. AY 2012 -13 BY CB DT. MOREOVER, THIS IS MORE RELEVANT FOR THE DEPARTMENT ALSO. THESE FOR MATS ARE REGULATED BY CBDT. ASSESSING OFFICER CANNOT OVERLOOK THESE FORMA TS AND (INTERPRET IT IN HIS OWN METHOD OF CALCULATING TAX CREDIT WHILE MAKI NG ASSESSMENT U/S 143(1) OF THE ACT.) PROCEED TO CALCULATE THE MAT CR EDIT TO COMPUTE ASSESSMENT U/S 143(1) APPLYING DIFFERENT METHODS WH EN THE PROPER AND CORRECT METHOD AS PROPOSED BY CBDT IN ITR-6. THE AS SESSING OFFICER IS EXPECTED TO FOLLOW THE ITR-6 FORMAT TO COMPLETE THE ASSESSMENT U/S 143(1) OR 143(3) OF THE ACT.' 11. THE HYDERABAD BENCH OF TRIBUNAL ALSO REFERRED TO THE FACTS AND ISSUE DECIDED IN RICHA GLOBAL EXPORTS PVT. LTD. VS. ACIT (SUPRA) AND HELD AS UNDER:- '9.5 LET US ALSO ANALYSE THE CASE LAW OF RICHA GLOB AL EXPORTS PVT. LTD. WHICH WAS APPLIED BY CIT(A), THE DELHI ITAT OPINED THAT SECTION 115JAA APPLIED ONLY TO INCOME TAX, NOT OF INCOME TA X AS INCREASED BY SURCHARGE AND EDUCATION CESS. WE ARE OF THE VIEW TH AT THE APEX COURT DECISION IN THE CASE OF K. SRINIVASAN (SUPRA) MAY N OT HAVE BEEN BROUGHT TO THE KNOWLEDGE OF THE ITAT, DELHI. MOREOVER, THE EXP LANATION 2 OF SECTION 115JB IS APPLICABLE TO CALCULATE TAX LIABILITY U/S 115JB AND THE SAME EXPLANATION SHOULD ALSO BE APPLIED FOR GIVING CREDI T U/S 115JAA. THE TAX LIABILITIES CALCULATED U/S 115JB BY APPLYING THE EX PLANATION 2, THE TAX LIABILITY SO COMPUTED ARE REMITTED BY THE ASSESSEE AND THEN THE SAME WAS CARRIED FORWARD FOR FUTURE MAT CREDIT. IN OUR VIEW, WHILE CALCULATING THE MAT CREDIT U/S 115JAA, THE SAME EXPLANATION '2' IN SECTION 115JB MUST BE APPLIED. 9.6 THE EARLIER JUDGMENTS IN THE CASES OF UNIVERSAL MEDICARE, VALMET INDIA AND WYETH LIMITED ARE DECIDED RELYING ON THE ITR - 6 AS APPLICABLE IN THOSE AYS. SIMILARLY, WE ALSO APPLY THE ITR 6 FORMAT AS AP PLICABLE TO AY 2012 -13 AS STATED ABOVE. ASSESSEE HAS RELIED ON THE ITR - 6 FORMAT TO ARRIVE AT THE TOTAL LIABILITY AS WELL AS THE MAT CREDIT CALCULATI ONS AND PAID TAX ACCORDINGLY. IN OUR VIEW, THE ASSESSEE HAD FOLLOWED THE PROCEDURE PROPERLY AND THE ASSESSING OFFICER HAD MADE THE CALCULATIONS APPLYING HIS OWN INTERPRETATION OR RELIED ON THE PROGRAMME, WE ARE N OT SURE WHETHER IT IS PROGRAMME HITCH OR THE INTERPRETATION OF ASSESSING OFFICER WAS NOT IN LINE 4 ITA NO.153/PUN/2015 WMS GAMING SOLUTIONS INDIA PVT. LTD., WITH THE CALCULATIONS PROPOSED IN ITR-6. THEREFORE, WE DELETE THE ADDITION MADE.' 12. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDEN TICAL TO THE ISSUE BEFORE THE HYDERABAD BENCH OF TRIBUNAL AND APPLYING THE SAME P ARITY OF REASONING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO MAT CREDIT UTILIZA TION OF RS.1.48 CRORES I.E. CREDIT INCLUDING SURCHARGE AND EDUCATION CESS. ACCORDINGLY , WE DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE REFUND IN THE HANDS OF AS SESSEE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 6. FROM THE ABOVE, IT IS EVIDENT THAT THE ISSUE RAI SED BY THE ASSESSEE IN THE PRESENT CASE IS EXACTLY IDENTICAL TO THE ONE ALREAD Y ADJUDICATED BY THE TRIBUNAL IN THE CASE OF DAR AL-HANDASAH CONSULTANTS (SUPRA). A CCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF AUGUST, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 18 TH AUGUST, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. THE CIT (A) - I , PU NE THE CIT-I, PUNE 5. % , , B BENCH PUNE; 6. / GUARD FILE.