DCIT, CIR-11, KOLKATA, Kolkata V. M/S. CRI Limited, Kolkata

ITA 1942/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1719 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 17-10-2014
• Court: TRIBUNAL
• Assessee Lawyers: S K AGARWAL FCA LD
• Section: 143(3); 142(1); 115JB

Judgement Text

1 ITA NO. 1942/K/14 M/S. CRI LTD IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA BEFORE: SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 1942/KOL/2014 ASSESSMENT YEAR: 2009-10 D.C.I.T, CIR-11, KOL VS. M/S. CRI LTD PAN: AABCC 3552F [ APPELLANT] [ RESPONDENT ] FOR THE APPELLANT : NONE FOR THE RESPONDENT : SHRI S.K AGARWAL, FCA, LD.AR DATE OF HEARING : 29-05-2017 DATE OF PRONOUNCEMENT : 29-05-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DAT ED 14-07-2014 OF CIT(A),I, KOLKATA FOR THE ASSESSMENT YEAR 2009-1 0. 2. NONE APPEARED ON BEHALF OF THE REVENUE. THERE WA S NO PETITION FOR ADJOURNMENT EITHER. HENCE, WE PROCEED TO DISPOSE OF F THIS APPEAL EX-PARTE QUO THE REVENUE 3. THE ONLY ISSUE IN THIS APPEAL THAT IS TO BE DECI DED IS WHETHER THE CIT-A IS JUSTIFIED IN ALLOWING MAT CREDIT BEFORE LE VY OF SURCHARGE AND EDUCATION CESS, IN THE FACTS AND CIRCUMSTANCES OF T HE CASE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND ENGAGED IN MANUFACTURING OF BALLPEN TIPS. THE ASSES SEE FILED ITS RETURN DECLARING TOTAL INCOME OF RS. 2,54,98,745/-. NOTIC ES U/S 143(3) AND 142(1) WERE ISSUED. IN RESPONSE TO WHICH, THE AR OF THE ASSESSEE APPEARED TO PROSECUTE ITS CASE. THE AO DETERMINED T HE TAX ON NORMAL PROVISIONS AT RS.50,99,749/- AND FOUND TAX AS PER S ECTION 115JB OF THE ACT 2 ITA NO. 1942/K/14 M/S. CRI LTD IS LESS THAN THE NORMAL PROVISIONS OF THE ACT. ACCO RDINGLY, THE MAT CREDIT HAS BEEN GIVEN AFTER LEVY OF SURCHARGE AND EDUCATIO N CESS VIDE HIS ORDER DT. 30-12-2011 PASSED U/S. 143(3) OF THE ACT 5. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT-A AND CONTENDED THAT THE AO WAS WRONG IN CHARGING SURCHAR GE ON THE GROSS TAX (BEFORE MAT CREDIT) INSTEAD OF NET TAX. THE ASSESSE E HAS PLACED RELIANCE ON THE PROPOSITION OF LAW IN THE ORDER IN THE CASE OF UNIVERSAL MEDICARE P.LTD OF THE CO-ORDINATE BENCH, ITAT MUMBAI. THE CI T-A CONSIDERING THE FACTS OF THE CASE WITH THAT OF THE FACTS IN THE CA SE OF UNIVERSAL MEDICARE ( SUPRA) OF MUMBAI TRIBUNAL ALLOWED THE MAT CREDIT BEFORE C HARGING OF SURCHARGE AND EDUCATION CESS. RELEVANT FINDING OF T HE CIT-A IS REPRODUCED HEREIN BELOW:- 5. THE LD AR HAS SUBMITTED THAT THE SCHEME FOR THE COMPUTATION OF TAX AS PRESCRIBED BY THE ITR-6 FOR THE RELEVANT ASSESSMENT YEAR 2009-10 CLEA RLY SHOWS THE CHRONOLOGY: COMPUTE THE GROSS TAX PAYABLE (COLUMN 3), THEN REDUCE MAT CREDI T U/S 115JAA (COLUMN 4) TO DETERMINE THE TAX PAYABLE AFTER CREDIT U/S 115JAA (COLUMN 5); AND THEN, ADD SURCHARGE (COLUMN 6) AND EDUCATION CESS (COLUMN 7) TO DETERMINE THE GROSS TA X LIABILITY (COLUMN 8). THE LD AR ALSO PLACED RELIANCE IN THE CASE OF UNIVERSAL MEDICARE (P) LTD VS ACIT IN ITA NO. 839/MUM/2012 WHEREIN IDENTICAL ISSUE WAS DECIDED BY THE HON'BLE BENCH OF THE ITAT, MUMNBAI. IN THAT CASE, THE HON'BLE TRIBUNAL HAS HELD AS UNDER: GROUND NO. 6 RELATE TO LEVYING SURCHARGE AND EDUCAT IONAL CESS BEFORE ADJUSTING MAT CREDIT. IT IS PERTINENT TO MENTION THAT THIS ISSUE HAS NOT BEEN D ISCUSSED IN THE ASSESSMENT ORDER. HOWEVER, THE SAME HAS BEEN RAISED BEFORE THE LD CIT(A). THE CLAIM OF THE ASSESSEE IS THAT MAT CREDIT SHOULD FIRST BE REDUCED FROM THE TAX PAYABLE AND TH EREAFTER ON THE RESIDUAL AMOUNT THE SURCHARGE AND EDUCATIONAL CESS BE LEVIED. IT IS REL EVANT TO NOTE THAT IN THE INCOME TAX RETURN FORM-ITR-6, COLUMN NO. 4, THE ASSESSEE IS REQUIRED TO FILL THE CREDIT U/S 115JAA OF TAX PAID IN EARLIER YEARS AND AFTER WHICH ON THE BALANCE TAX PA YABLE, THE ASSESSEE HAS TO FILL THE SURCHARGE AND EDUCATIONAL CESS AT COLUMN NO. 8 AND 10 FOR THE PURPOSE OF ARRIVING AT THE GROSS TAX LIABILITY. ALSO, THE ITAT IN THE CASE OF RICHA GLOB AL EXPORTS (P) LTD V ACIT IN ITA NO. 2303/DEL!2012 HAS HELD THERE IS NO NEED TO GIVE SEP ARATE CREDIT OF EDUCATION CESS AND SURCHARGE WHILE GIVING CREDIT OF MAT. WHAT IS REQUI RED IS THAT IN THE YEAR WHEN SUCH CREDIT IS GIVEN, EDUCATION CESS AND SURCHARGE SHOULD BE COMPU TED AFTER GIVING CREDIT OF MAT TO THE TAX COMPUTED ON THE ASSESSED INCOME IN THE SAME WAY AS 'IN THE CASE OF INTEREST UNDER SECTIONS 2348 AND 234C. THE NATURE OF MAT IS LIKE PRE- PAID TAXES AND, THEREFORE, IT SHOULD BE TREATED ALIKE FOR THE PURPOSES OF COMPUTING EDUCATION CESS AND SURCHARGE ALSO. IN VIEW OF THAT MATTER, WE FIND MERITS IN THE CONTE NTION OF THE ASSESSEE THAT MAT CREDIT SHOULD FIRST BE REDUCED FROM THE TAX PAYABLE AND THEREAFTE R ON THE RESIDUAL AMOUNT THE SURCHARGE AND EDUCATIONAL CESS BE LEVIED. WE ORDER AND DIRECT ACC ORDINGLY. GROUND NO. 6 IS ALLOWED. 6'. I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESS EE AND ALSO THE MATERIAL PLACED ON RECORD. I FIND MERIT IN THE SUBMISSION THAT MAT CREDIT HAS TO BE FIRST ALLOWED BEFORE CHARGING THE SURCHARGE AND EDUCATION CESS. THE CONTENTION OF THE ASSESSEE IS IN LINE WITH THE SCHEME FOR THE COMPUTATION OF TAX AS PRESCRIBED BY THE ITR-6 FOR T HE RELEVANT ASSESSMENT YEAR. THE ISSUE IS ALSO COVERED DIRECTLY BY THE DECISION OF THE HON'BL E ITAT, MUMBAI IN THE CASE OF UNIVERSAL. MEDICARE (P) LTD VS ACIT IN ITA NO. 839/MUM/2012 (S UPRA). ACCORDINGLY, THE AO IS DIRECTED TO FOLLOW THE COLUMNS OF THE ITR-6 FOR THE RELEVANT AS SESSMENT YEAR; AND, CHARGE THE SURCHARGE AND EDUCATION CESS AFTER ALLOWING THE MAT CREDIT. G ROUND NO 2 IS ALLOWED. 3 ITA NO. 1942/K/14 M/S. CRI LTD 6. FROM THE ABOVE, WE FIND THAT THE LD.CIT-A HAS FO LLOWED THE PROPOSITION OF LAW LAID DOWN BY THE MUMBAI BENCH OF ITAT ON THIS ISSUE. HENCE, WE FIND NO INFIRMITY IN HIS ORDER. 7. IN VIEW OF THE ABOVE, WE HOLD THAT MAT CREDIT SH ALL BE REDUCED FIRST FROM THE TAX PAYABLE AND ADD SURCHARGE AND EDUCATIO N CESS THEREAFTER. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE CIT-A . THE GROUND RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-05-2017 SD/- SD/- J.SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29-05-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT THE DCIT, CIR-11 P-7 CHOWRINGHEE SQ,KOL -69. 2 RESPONDENT M/S. CRI LIMITED 333 GARIA MAIN ROAD, MAHAMAYATALA, NEAR CHILD SCHOOL, KOL-84. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA