DCIT, CHENNAI V. Saint Gobain Gyproc India Limited, CHENNAI

ITA 2122/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8091 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-01-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 05-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B LAKSHMINARAYANAN IRS
• Section: 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , #'$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.2122/MDS/2015. # % &% / ASSESSMENT YEAR : 2013-2014 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1) CHENNAI VS. M/S. SAINT GOBAIN GYPROC INDIA LIMITED, SIGAPI ACHI BUILDING, LEVEL 7, 18/3, RUKMINI LAKSHMIPATHI ROAD, EGMORE, CHENNAI 600 008. [PAN AAACI 0687E ] ( / APPELLANT) ( /RESPONDENT) '( ) * / APPELLANT BY : SHRI. B. LAKSHMINARAYANAN, IRS, JCIT. +,'( ) * /RESPONDENT BY : SHRI. S.P. CHIDAMBARAM, ADVOCATE ! ) - / DATE OF HEARING : 13-01-2016 ./& ) - / DATE OF PRONOUNCEMENT : 03-02-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-3, THAN E IN APPEAL NO. 648-THN/14-15, DATED 25.08.2015 FOR THE ASSESSMENT YEAR 2013-2014 PASSED U/S. 143(1) AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). ITA NO.2122/MDS/2015. :- 2 -: 2. THE REVENUE HAS RAISED ONLY ONE SUBSTANTIVE GROUND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN D IRECTING THE ASSESSING OFFICER TO ALLOW MAT CREDIT U/S.115JAA OF THE ACT AND ALSO THAT THE SURCHARGE AND EDUCATION CESS INCLUDED IN THE MAT CREDIT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY FILED RETURN OF INCOME ELECTRONICALLY ON 29.11.2013 ADMITTING TOTAL INCOME OF =53,27,57,210/- UNDER THE NORMAL PROVISIO NS OF COMPUTATION OF INCOME AND UNDER PROVISIONS OF SEC.115JB OF TH E ACT =55,30,38,040/-. SINCE, THE TAX LIABILITY UNDER NO RMAL PROVISIONS WAS HIGHER THAN SEC.115JB AND CALCULATED TAX =17,28,53, 077/- AND CLAIMED SET OFF OF MAT CREDIT OF =6,22,02,608/- INCLUDING SURCHARGE AND EDUCATION CESS OF EARLIER ASSESSMENT YEARS CALCULAT ED U/S.115JAA OF THE ACT. AS PER THE RETURN OF INCOME A REFUND OF = 6,96,410/- WAS DUE TO THE ASSESSEE. FURTHER, THE ASSESSEE HAS A CARRI ED FORWARDED MAT CREDIT OF =8,40,50,931/- PERTAINING TO ASSESSMENT Y EARS 2011-12 AND 2012-13. SUBSEQUENT TO FILING OF RETURN OF INCOME, THE CASE WAS PROCESSED U/S.143(1) OF THE ACT BY THE LD. ACIT (CP C) BANGALORE BY ORDER DATED 01.08.2014. AS PER THE INTIMATION/ORDE R DEMAND OF =39,79,464/- WAS RAISED. THE CPC OFFICER HAS CALCUL ATED TAX LIABILITY UNDER NORMAL PROVISIONS AND AGAINST MAT CREDIT OF = 6,22,02,608/- CLAIMED. THE CPC HAS ALLOWED CREDIT TO THE EXTENT OF =5,75,15,126/- ITA NO.2122/MDS/2015. :- 3 -: WERE CREDIT WAS GRANTED ONLY FOR THE TAX AMOUNT EXC LUDING THE SURCHARGE AND EDUCATION CESS OF MAT CREDIT. AGGRIEV ED, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AGAINST THE ORDER OF 143(1) ALLEGING THAT THE ACIT (CPC) HAS ERRED IN MAKING ADJUSTMENT OF TAX LIABILITY IN RESPECT OF SET OFF O F MAT CREDIT U/S.143(1) AND ALSO MAT CREDIT SHOULD BE SET OFF AGAINST TAX P AYABLE UNDER NORMAL PROVISIONS BEFORE INCLUDING SURCHARGE AND ED UCATIONAL CESS. FURTHER, CARRIED FORWARD MAT CREDIT FOR THE ASSESSM ENT YEAR 2011-12 AND 2012-13 HAS NOT BEEN ALLOWED. MAT CREDIT SHALL BE SET OFF AGAINST FUTURE TAX LIABILITY OF THE ASSESSEE COMPANY. 4. IN THE APPELLATE PROCEEDINGS, THE COMMISSIONER OF I NCOME TAX (APPEALS) CONSIDERED THE FACTS AND THE LD. AUTH ORISED REPRESENTATIVE MADE GROUNDWISE SUBMISSIONS AND ALSO RELIED ON THE JUDICIAL DECISIONS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE OF DISPUTE RELIED ON THE ORDER OF ITAT, M UMBAI BENCH IN THE CASE OF UNIVERSAL MEDICARE P. LTD VS ACIT(LTU) IN ITA NO.839/MUM/2012, DATED. 24.07.2013. REFERRED AT PAGE NO.13 OF COMMISSIONER OF INCOME TAX (APPEALS) ORDER AS UNDER :- IN VIEW OF THAT MATTER, WE FIND MERITS IN THE CON TENTION OF THE ASSESSEE THAT MAT CREDIT SHOULD FIRST BE REDUCE D FROM THE TAX PAYABLE AND THEREAFTER ON THE RESIDUAL AMOU NT THE SURCHARGE AND EDUCATIONAL CESS BE LEVIED. THEREF ORE, THE ITA NO.2122/MDS/2015. :- 4 -: ASSESSING OFFICER IS DIRECTED TO ALLOW MAT CREDIT T O THE APPELLANT . FURTHER, THE COMMISSIONER OF INCOME TAX (APPEALS) D IRECTED THE ASSESSING OFFICER TO ALLOW SETOFF OF MAT CREDIT AND ALLOWED THE GROUNDS OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE COM MISSIONER OF INCOME TAX (APPEALS), THE DEPARTMENT HAS ASSAILED A N APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ARG UED THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIREC TING THE ASSESSING OFFICER TO ALLOW MAT CREDIT UNDER SECTION 115JAA AN D ALSO FURTHER ERRED THAT THE SURCHARGE AND EDUCATION CESS BE PAR T OF MAT CREDIT FOR SET OFF AND PRAYED FOR SET ASIDE OF THE COMMISSION ER OF INCOME TAX (APPEALS) ORDER. 6. CONTRA, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE PROVISIONS OF SEC.115JB UNDER THE ACT WERE MAT CRED IT WAS CONSIDERED SET OFF AGAINST TAX LIABILITY UNDER NORMAL PROVISI ONS ALSO INCLUDES ELEMENT OF SURCHARGE AND EDUCATION CESS. THE ASSES SING OFFICER HAS NO POWER TO MAKE SEGREGATION AND ALLOW TAX CREDIT. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONSIDERED THE GROUNDS, WRITTEN SUBMISSIONS AND JUDICIAL DECISIONS AND RELI ED ON THE FINDINGS OF THE MUMBAI BENCH OF THE TRIBUNAL AND GRANTED RELI EF AND PRAYED FOR DISMISSAL OF REVENUE APPEAL. ITA NO.2122/MDS/2015. :- 5 -: 7. WE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES PERUSED THE MATERIAL ON RECORD AND ALSO JUDICIAL DECISION C ITED. THE ASSESSEE COMPANY HAS CLAIMED MAT CREDIT SET OFF AGAINST INCO ME TAX ON NORMAL PROVISIONS WHICH IS ALLOWABLE AND SUCH MAT CREDIT C AN BE CARRIED FORWARD ALSO. UNDER THE PROVISIONS OF SEC. 115JB TA X COMPONENTS ALSO INCLUDES SURCHARGE AND EDUCATION CESS. THE LD. AUT HORISED REPRESENTATIVE REITERATED HIS SUBMISSIONS MADE BEFO RE THE APPELLATE PROCEEDINGS WERE RELIEF WAS GRANTED. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE ASSES SING OFFICER AND ARGUED TO SET ASIDE THE APPEAL. IN REPLY, THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE DECISION OF ITAT, MUMB AI BENCH WYETH LIMITED VS. ACIT IN ITA NO.6682/MUM/2011, DATED 09. 01.2015 WHICH HAS ENDORSED THE PROVISIONS OF ALLOWING MAT CREDIT OBSERVED AT PAGE 4 IN PARA 5 AS UNDER:- 5. THUS IT IS CLEAR THAT THE HONBLE HIGH COURT H AS TAKEN INTO ACCOUNT THE ORDER OF ENTRIES IN THE FORM ITR-6 FOR THE A.Y. 2011-12 IN THE SAID CASE AND HELD THAT AS PER FORM ITR-6, THE MAT CREDIT HAS TO BE GIVEN AGAINST THE G ROSS TAX PAYABLE EXCLUSIVE OF SURCHARGE /CESS AND ONLY A FTER THE MAT CREDIT TAX LIABILITY, THE SURCHARGE AND CES S HAS TO BE CALCULATED FOR THE PURPOSE OF WORKING OUT THE GR AND TAX LIABILITY. WE ALSO FIND MERIT AND SUBSTANCE IN THE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT IF THE MAT CREDIT IS TAKEN INTO ACCOUNT WITHOUT INCLUDING THE SURCHARGE AND EDUCATION CESS THEN THE SURCHARGE AND EDUCATION CESS ON THE TAX LIABILITY HAS TO BE CALCU LATED ONLY AFTER ALLOWING THE MAT CREDIT. ALTERNATIVELY, THE AMOUNT OF MAT CREDIT SHOULD ALSO INCLUDE SURCHARGE AND EDUCATION CESS FOR THE PURPOSE OF ALLOWING THE CRED IT AGAINST THE TAX LIABILITY INCLUSIVE OF SURCHARGE AN D EDUCATION CESS. THEREFORE, THE MAT AS WELL AS NORMA L TAX BEFORE ALLOWING THE MAT CREDIT HAS TO BE TAKEN ON ITA NO.2122/MDS/2015. :- 6 -: PARITY EITHER EXCLUSION OF SURCHARGE AND EDUCATION CESS OR INCLUSIVE OF SURCHARGE AND EDUCATION CESS OR INC LUSIVE OF SURCHARGE AND EDUCATION CESS. ACCORDINGLY WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DIRECT TH E ASSESSING OFFICER TO ALLOW THE MAT CREDIT AGAINST T HE TAX LIABILITY PAYABLE BEFORE SURCHARGE AND EDUCATION CE SS OR ALTERNATIVELY THE AMOUNT OF MAT CREDIT SHOULD ALSO BE INCLUSIVE OF SURCHARGE AND EDUCATION CESS AND THEN ALLOW THE CREDIT AGAINST THE TAX PAYABLE INCLUSIVE OF SUR CHARGE AND EDUCATION CESS. WE RESPECTFULLY FOLLOWING THE ABOVE DECISION, UPHE LD THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND DISMISS TH E REVENUE APPEAL. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.2122/MDS/2015 IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 3RD DAY OF FEB RUARY , 2016 AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 0 / DATED: 03.02.2016 KV 1 ) +#-23 43&- / COPY TO: 1. '( / APPELLANT 3. ! 5- () / CIT(A) 5. 3 89 +#-# / DR 2. +,'( / RESPONDENT 4. ! 5- / CIT 6. 9:% ; / GF