ACIT, CHENNAI V. M/s. Star gate Investments Private Ltd., CHENNAI

ITA 178/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5074 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 24-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 154; 15; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO S. 177 & 178 /CHNY/20 19 / ASSESSMENT YEAR S : 2015 - 16 & 2016 - 17 ASST. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE - 6(2), AAYAKA BHAVAN, NEW BLOCK, 7 TH FLOOR, 121, M.G. ROAD, CHENNAI 600 034. VS. M/S. STARGATE ENTERPRISES PVT LTD., 9, CATHEDRAL ROAD, GOPALAPURAM, CHENAI 600 086. [PAN: AAACS 9436 K ] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. SRIDHAR DORA, JCIT /RESPONDENT BY : MR. R. VIJAYARAGHAVAN, ADVOCATE / DATE OF HEARING : 13 .0 5 .2019 / DATE OF PRONOUNCEMENT : 17 .0 5 .2019 / O R D E R PER S. JAYARAMAN , ACCOUNTANT MEMBER : THE REVENUE HAS FILED THESE APPEALS AGAINST THE CONSOLIDATED ORDER OF THE LD CIT (A) - 15, CHENNAI IN ITA NO. 48/CIT(A) - 15/2017 - 18 AND ITA NO. 432/CIT(A) - 15/2016 - 17 FOR THE ASSESSMENT YEARS 2015 - 16 AND 2016 - 17 RESPECTIVELY. 2 2. WHILE PROCESSING THE RETURNS FILED BY THE ASSESSEE FOR THE AYS 2015 - 16 AND 2016 - 17, THE CENTRAL PROCESSING CENTRE (CPC) HAS NOT CONSIDERED THE ASSESSEE S CLAIM OF INCLUSION OF SURCHARGE AND EDUCATIONAL CESS WHILE ADJUSTING MAT CREDIT. THE RECTIFICATION APPLICATION FILED BY THE ASSESS EE BEFORE THE CPC WAS REJECTED AND THE ASSESSEE S RECTIFICATION APPLICATION U/S 154 OF THE ACT FILED BEFORE THE AO IS STILL PENDING. THEREFORE, THE ASSESSEE FILED THE APPEALS BEFORE THE CIT (A) AGAINST THE REJECTION OF ITS RECTIFICATION APPLICATION U/S 15 4 BY THE CPC. ASSESSEE PLEADED BEFORE THE LD. CIT (A) THAT ITS CLAIM OF INCLUSION OF SURCHARGE AND EDUCATIONAL CESS PAYABLE ON BASIC TAX SHOULD HAVE BEEN CONSIDERED WHILE ADJUSTING CREDIT U /S 115 JAA AND R E LIED ON THE DECISION OF THE ITAT IN THE CASE OF (I ) M/S. SAINT GOPAIN GYPROC INDIA LIMITED, (II) M/S. CHANGEPOND TECHNOLOGIES PRIVATE LIMITED AND THE DECISION OF THE CIT - V, CHENNAI IN THE CASE OF SANMAR SPECIALITY CHEMICALS LIMITED (GROUP COMPANY OF THE ASSESSEE). THE LD CIT (A) FOLLOWING THE ABOVE DECIS IONS DIRECTED THE AO TO INCLUDE SURCHARGE AND CESS PAYABLE ON BASIC TAX WHILE ADJUSTING CREDIT U/S 115JAA OF THE ACT FOR BOTH THE ASSESSMENT YEARS. 3. AGGRIEVED AGAINST THOSE ORDERS, THE REVENUE FILED THESE APPEALS WITH THE FOLLOWING GROUNDS: (1) THE ORDE R OF THE LD CIT (A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 3 (2) THE LD CIT (A) ERRED IN ALLOWING MAT CREDIT U/S 115JAA OF THE ACT AGAINST THE SURCHARGE AND THE CESS. (2.1.) THE LD CIT (A) FAILED TO APPRECIATE THAT TAX PAYABLE IS TO BE ARRIVED AT BY DEDUCTING MAT CREDIT U/S 115JAA OF THE ACT FROM GROSS TAX PAYABLE AND THAT SURCHARGE AND CESS ARE TO BE COMPUTED TAX PAYABLE . (2.2) THE LD CIT (A) FAILED TO APPRECIATE THAT SECTION 115JAA DOES NOT SPECIFY THE INCLUSION OF SURCHARGE AND CESS WHILE GIV ING MAT CREDIT. (2.3) THE LD CIT (A) OUGHT TO HAVE FOLLOWED THE DECISION OF THE DELHI BENCH OF THE HON'BLE TRIBUNAL IN THE CASE OF RICHA GLOBAL EXPORTS P LTD VS. ACIT (CPC) (25 TAXMANN.COM 1) TH A T SURCHARGE AND EDUCATION CESS DO NO FORM PART OF MAT CREDIT. (2.4) THE LD CIT (A) FAILED TO APPRECIATE THAT THE REVENUE HAS FILED AN APPEAL BEFORE THE HON'BLE MADRAS HIGH COURT AGAINST THE ORDER OF THE HON'BLE TRIBUNAL IN THE CASE OF DCIT VS . SAINT GOPAIN GYPROC LTD IN ITA NO. 2122/MDS/2015, WHICH IS STILL PENDING. (3) FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LD CIT (A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE LD DEPARTMENTAL REPRESENTATIVE PRESENTED THE CASE ON THE LINES O F THE GROUNDS OF APPEAL AND PLEADED THAT THE ORDERS OF THE CIT (A) BE SET - ASIDE AND THAT OF THE AO BE RESTORED. 5. PER CONTRA, THE LD AUTHORIZED REPRESENTATIVE OF ASSESSEE RELIED ON THE ORDERS OF THIS TRIBUNAL IN THE CASE OF DCIT VS. M/S. INFASTECH FASTERN ING TECHNOLOGIES INDIA PVT LTD (ITA NO.2794/CHNY/2017) DATED 31/05/2018 WHEREIN THIS TRIBUNAL HAS EXTRACTED THE HEAD NOTE IN THE CASE OF CIT VS. K. SRINIVASAN REPORTED IN 83 ITR 0346 (SC) , WHICH READS AS UNDER: - THE LEGISLATIVE HISTORY OF THE FINANCE ACTS, AS ALSO THE PRACTICE INDICATES THAT THE TERM INCOME - TAX AS EMPLOYED IN S. 2 INCLUDES SURCHARGE S ALSO 4 THE SPECIAL AND THE ADDITIONAL SURCHARGE WHENEVER PROVIDED WHICH ARE ALSO SURCHARGES WITHIN THE MEANING OF ART. 271 OF THE CONSTITUTION. AND DISMISSED THE REVENUE S APPEAL. 6. RELYING ON THE ABOVE DECISION OF THE TRIBUNAL, THE LD AUTHORISED REPRESENTATIVE OF ASSESSEE SUBMITTED THAT THE DECISION RENDERED BY THE LD CIT (A) DOES NOT REQUIRE ANY INTERFERENCE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND FIND NO MERIT IN THE SUBMISSIONS MADE BY THE LD DEPARTMENTAL REPRESENTATIVE. RESPECTFULLY FOLLOWING THE ORDER S OF THIS TRIBUNAL INCLUDING THE ORDER IN THE CASE OF M/S. INFRASTECH FASTENING TECHNOLOGIES INDIA PVT LTD (SUPRA) ON THIS ISSUE, THE CORRESPONDING GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, BOTH THE REVENUE S APPEALS ARE DISMISSED. ORDER PRONOUNCED ON 17 TH MAY, 2019, IN CHENNAI SD/ - SD/ - ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER / CHENNAI, / DATED:17 TH MAY, 2019. OKK 5 / COPY TO: 1. / APPELLANT 4. / CIT 2. / RESPONDENT 5. / DR 3. ( ) / CIT(A) 6. / GF