Sayaji Industries Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-4(1)(1), Ahmedabad

ITA 2137/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4372 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 16-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S. SHUKLA
• Keywords: TDS; Set aside
• Section: 115JB; 143(1); 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER SAYAJI INDUSTRIES LTD. MAIZE PRODUCTS, AMBAWADI, P.O. KATHWADA, AHMEDABAD-382430 PAN: AADCS0861R (APPELLANT) VS THE DY. CIT, CIRCLE- 4, PRATYAKSHKAR BHAVAN, PANJRAPOLE, AHMEDABAD-380015 (RESPONDENT) REVENUE BY: SHRI S. S. SHUKLA, SR. D.R. ASSESSEE BY: SHRI APARNA PARELKAR, A.R. DATE OF HEARING : 24-03-2021 DATE OF PRONOUNCEMENT : 13-05-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2015-16, ARISES FRO M ORDER OF THE CIT(A)-8, AHMEDABAD DATED 03-08-2018, IN PROCEEDIN GS UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE SOLITARY GROUND OF THE APPEAL OF THE ASSESSE E IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ALLOWA NCE OF MAT CREDIT U/S. ITA NO. 2137/AHD/2018 ASSESSMENT YEAR 2015-16 I.T.A NO. 2137/AHD/2018 A.Y. 2015-16 PAGE NO. SAYAJI INDUSTRIES LTD. VS. DY. CIT 2 115JAA (2A) EXCLUSIVE ON SURCHARGE AND EDUCATION CE SS, RESULTING IN SHORT CREDIT OF RS. 1,90,167/- 3. THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RET URN OF INCOME ON 29 TH SEPTEMBER, 2015 AND THE RETURN OF INCOME WAS PROCES SED U/S. 143(1) OF THE ACT BY THE CPC, BANGALORE ON 26 TH SEPTEMBER, 2016. 4. AGAINST THE ORDER U/S. 143(1), THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) STATING THAT IT HAS CLAIMED MAT CREDIT O F RS. 16,20,001/- U/S. 115JAA OF THE ACT IN THE RETURN OF INCOME. HOWEVER , WHILE PROCESSING THE RETUNE OF INCOME U/S. 143(1) THE MAT CREDIT OF ONLY RS. 14,29,834/- WAS ALLOWED. THE ASSESSING OFFICER IN ITS APPEAL BEFO RE THE LD. CIT(A) HAS MENTIONED THAT THE ASSESSING OFFICER IN THE INTIMAT ION U/S. 143(1) OF THE ACT HAS ALLOWED MAT CREDIT EXCLUDING SURCHARGE AND EDUC ATION CESS THEREBY IT HAS BEEN GRANTED SHORT CREDIT BY RS. 1,90,167/-. T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AFTER REFERRIN G JUDGMENT OF DELHI ITAT IN THE CASE OF RICHA GLOBAL EXPORTS PVT. LTD. VS. A CIT (2012) 54 SOT 185/225 TAXMANN.COM 01 (DEL). 5. DURING THE COURSE OF APPELLATE PROCEEDINGS[ BEFO RE US THE LD. COUNSEL HAS PLACED RELIANCE ON THE DECISION OF HONBLE SUPR EME COURT IN THE CIT VS. SHRINIVASAN 83 ITR 346 STATING THAT THE TERM TAX I NCLUDE SURCHARGE. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF HYDERABAD ITAT IN THE CASE OF VIRTUSA (INDIA) (P.) LTD. 67 TAXMANN.COM 65 CONTENDING THAT THE DECISION OF RICHA GLOBAL RENDERED IN 2010-11 WAS DI STINGUISHED IN THIS CASE AND HELD THAT MAT CREDIT SHOULD BE COMPUTED INCLUSI VE OF SURCHARGE AND I.T.A NO. 2137/AHD/2018 A.Y. 2015-16 PAGE NO. SAYAJI INDUSTRIES LTD. VS. DY. CIT 3 CESS IN VIEW OF ITR 6 FORMAT. THE LD. COUNSEL HAS ALSO SUBMITTED THAT FORMAT OF ASSESSMENT YEAR 2012-13 WAS AMENDED BY CB DT AND AS PER THE AMENDED FORMAT BOOK PROFIT INCLUDING SURCHARGE AND EDUCATION CESS IS AUTOMATICALLY PICKED UP BY THE UTILITY FROM SCHEDUL E PART B-TTI. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITY. 6. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. IN THE RETURN OF INCOME THE ASSESSEE HAS CLAIMED MAT CREDIT OF RS . 16,20,001/- U/S. 115JAA OF THE ACT. THE RETURN OF INCOME FILED WAS PROCESSED BY CPC AND AS PER THE INTIMATION U/S. 143(1) OF THE ACT THE AS SESSEE HAS BEEN GIVEN CREDIT OF ONLY RS. 14,29,834/- EXCLUDING OF SURCHARGE AND EDUCATION CESS RESULTING IN SHORT CREDIT OF RS. 1,90,167/- WHILE ALLOWING MA T CREDIT U/S. 115JAA(2A) OF THE ACT. IN THE EARLIER YEARS, THE A SSESSEE HAS PAID TAX ON BOOK PROFIT U/S. 115JB OF THE ACT AND SECTION 115JA A OF THE ACT PROVIDES THAT WHERE ANY AMOUNT OF TAX IS PAID U/S. 115JB(1) BY ASSESSEE FOR ANY ASSESSMENT YEAR, CREDIT IN RESPECT OF THE TAXES SO PAID SHALL BE ALLOWED ON THE DIFFERENCE OF THE TAX PAID U/S. 115JB AND THE AMOUN T OF TAX PAYABLE BY THE ASSESSEE COMPANY ON ITS TOTAL INCOME COMPUTED IN AC CORDANCE WITH THE PROVISION OF ACT. THE ASSESSEE HAS REFERRED THE CA SE OF CIT VS. K. SRINIVISAN 83 ITR 346 (SC) WHEREIN HONBLE SUPREME COURT HELD THAT THE TERM TAX INCLUDES SURCHARGE. THE CO-ORDINATE BENCH OF THE IT AT HYDERABAD IN THE CASE OF VIRTUSA (INDIA) (P.) LTD. VS. DY. CIT CIR-1 7(2) HYDERABAD (2016) 67 TAXMANN.COM 65 (HYDERABAD-TRIB) HELD THAT THE SECT ION 115JAA PROVIDES THAT WHERE ANY AMOUNT OF TAX IS PAID U/S. 115JB(1) BY A COMPANY FOR ANY ASSESSMENT YEAR CREDIT IN RESPECT OF THE TAXES SO P AID FOR SUCH ASSESSMENT I.T.A NO. 2137/AHD/2018 A.Y. 2015-16 PAGE NO. SAYAJI INDUSTRIES LTD. VS. DY. CIT 4 YEAR SHALL BE ALLOWED ON THE DIFFERENCE OF THE TAXE S PAID U/S. 115JB AND THE AMOUNT OF TAXE PAYABLE BY THE COMPANY ON ITS TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE OTHER PROVISIONS OF THE ACT. IN OTHER WORDS, MAT CREDIT SHALL BE COMPUTED AS UNDER:- MAT CREDIT AVAILABLE = TAX PAID U/S 115JB- TAX PAYA BLE ON THE TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT. IN THIS CASE, THE ITAT HYDERABAD HAS ALSO DISTINGUI SHED THE DECISION OF ITAT DELHI IN THE CASE OF RICHA GLOBAL (P) LTD. VS. ACIT (2012) 54 SOT 185/25 TAXMANN.COM AT THE DELHI. THE RELEVANT PAR T OF THE DECISION IS REPRODUCED AS UNDER:- 9.6A LET US ALSO ANALYSE THE CASE LAW OF RICHA GLO BAL EXPORTS (P.) LTD. ASSTT. CIT [2012]. 54...SOT 185/25 TAXMANN. COM L (DELHI) WHICH WAS APPLIED BY CIT{A), THE DELHI ITAT OPINED THAT SECTION 115JA.A APPLIED ONLY TO INCOME TAX, NOT OF INCOME TAX AS INCREASED BY SURCHARGE AND EDUCATION CESS. WE ARE OF THE VIEW THAT THE APEX CO URT DECISION IN THE CASE OF K. SRINIVASAN (SUPRA) MAY NOT HAVE BEEN BROUGHT TO THE KNOWLEDGE OF THE ITAT, -DELHI. MOREOVER, THE EXPLANATION 2 OF SECTION 115JB IS APPLICABLE TO CAL CULATE 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 EXPLANATION 2, THE TAX LIABIL ITY SO COMPUTED ARE REMITTED BY THE ASSESSEE AND THEN THE SAME WAS CARRIED FORWARD FOR FUTURE MA T CREDIT. IN OUR VIEW, WHILE CALCULATING THE MAT CREDIT U/S 115JAA, THE SAME EXPLANATION '2' IN SECTION 115JB MUST BE APPLIED. WE HAVE ALSO GONE THROUGH THE DECISION OF ITAT IN T HE CASE OF CONSOLIDATED SECURITIES PVT. LTD. VS. ACIT (2018) 98 TAXMANN.COM 418 (DEL) WHEREIN IT IS HELD MAT TAX CREDIT AVAILABLE FROM EARLIER YEARS , INCLUSIVE OF SURCHARGE AND EDUCATION CESS ETC IS TO BE REDUCED FROM AMOUNT OF TAX DETERMINED ON TOTAL INCOME OF CURRENT YEAR AFTER ADDED SURCHARGE AND EDUCATION CESS. IN THE CASE OF NICE BOMBAY TRANSPORT PVT. LTD. VS. ACI T (2019) 103 TAXMANN.COM 338 (DEL-TRI) HAS HELD THAT MAT CREDIT INCLUSIVE OF SURCHARGE AND EDUCATION CESS TO BE ALLOWED AS TAX CREDIT. TH E RELEVANT PART OF THE DECISION IS REPRODUCED AS UNDER:- 18. NOW COMING TO [HE DISALLOWANCE OF THE MAT CRED IT IN RESPECT OF SURCHARGE AND CESS TO TUNE OF RS. 1089399/-, ASSESSEE PLACED RELIANCE OF THE T RIBUNAL'S DECISION REPORTED IN THE CASE OF CONSOLIDATED SECURITIES LTD V. ASSTT. C1T [2018J 96 TAXMANN,COMA18/L72 ITD 163 (DELHI - TRIB.) I.T.A NO. 2137/AHD/2018 A.Y. 2015-16 PAGE NO. SAYAJI INDUSTRIES LTD. VS. DY. CIT 5 WHEREIN, IT WAS HELD THAT THE AMOUNT OF THE MAT TAX CREDIT, INCLUSIVE OF SURCHARGE AND EDUCATION CESS ETC., IF ANY, SHOULD BE REDUCED FROM THE AMOUN T OF TAX DETERMINED ON THE TOTAL INCOME AFTER ADDING SURCHARGE AND EDUCATION CESS, ETC., AND ONLY THE RESULTANT AMOUNT PAYABLE WILL SUFFER INTEREST UNDER THE RELEVANT PROVISIONS OF THE ACT. IN THE AFORESAID DECISION, VIDE PARAGRAPH NO. 8 & 9 IT WAS HELD AS UNDER: '8. A CAREFUL CIRCUMSPECTION OF THE ABOVE PROVISION DECIPHERS CERTAIN THINGS. FIRST IS THAT THE AMOUNT OF ADVANCE TAX AND TDS ETC. RANK PARI PA SSU WITH THE AMOUNT OF MAT TAX CREDIT AVAILABLE U/S. 115JAA. SECONDLY, THE AMOUNT OF TAX PAYABLE FOR THE YEAR IS DETERMINED AFTER REDUCING THE AMOUNT OF ADVANCE TAX , TDS AND MAT CREDIT. THIRDLY, THE RESULTANT AMOUNT ARRIVED AT ALTER MAKING SUCH DEDUC TIONS IS THE AMOUNT OF TAX, WHICH THE ASSESSEE IS LIABLE TO PAY. FOURTHLY, THE AMOUNT OF INTEREST PAYABLE UNDER ANY PROVISION OF THIS ACT IS CALCULATED ON THE RESULTANT AMOUNT. THI S SHOWS THAT THE AMOUNT OF INTEREST UNDER THE ACT IS LIABLE TO BE PAID ON THE AMOUNT OF TAX PAYABLE DETERMINED AFTER DEDUCTING, INTER ALIA, THE AMOUNT OF MAT TAX CREDIT . 9. WE, THEREFORE, HOLD THAT THE AMOUNT OF THE MAT T AX CREDIT, 'INCLUSIVE OF SURCHARGE AND EDUCATION CESS ETC., IF ANY, SHOULD BE REDUCED FROM THE AMOUNT OF TAX DETERMINED ON THE TOTAL INCOME AFTER ADDING SURCHARGE AND EDUCATION C ESS, ETC. ONLY THE RESULTANT AMOUNT PAYABLE WILL SUFFER INTEREST UNDER THE RELEVANT PRO VISIONS OF THE ACT. SINCE THE AMOUNT OF MAT TAX CREDIT IS UNCERTAIN, WE SET ASIDE THE IMPUG NED ORDER AND REMIT THE MATTER TO THE FILE OF THE LD. AO FOR ASCERTAINING THE CORRECT AMO UNT OF MAT TAX CREDIT AVAILABLE WITH THE ASSESSEE INCLUSIVE OF SURCHARGE AND EDUCATION C ESS . . . IF ANY, AND THEN ALLOW TAX CREDIT AS INDICATED ABOVE. NEEDLESS TO SAY, THE ASS ESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF HEARING IN THIS REGARD.' THE AFORESAID DECISION IS APPLICABLE TO THE FACTS O F THE PRESENT CASE ON ALL FOURS AND BY RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE LD. AO FOR ASCERTAINING THE CORRECT AMOUNT OF MAT TAX CRED IT AVAILABLE TO THE ASSESSEE INCLUDING OF SURCHARGE/CESS AND THEN ALLOW TAX CREDIT AS INDICAT ED IN THE DECISION OF THE CONSOLIDATED SECURITIES LTD. (SUPRA). IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF S REI INFRASTRUCTURE FINANCE LTD. VS. DCIT, CIRCLE-11(2), KOLKATA (2016) 72 TAXMANN.COM 239 (CALCUTTA) HAS HELD THAT MAT CREDIT U/S. 115JA HAD TO BE ALLOWED BEFORE MAKING ADDITION OF SURCHARGE AND CESS AND MAT CREDI T U/S. 115JA BROUGHT FORWARD FROM EARLIER YEARS IS TO BE SET OFF AGAINST TAX ON TOTAL INCOME AFTER TAKING INTO ACCOUNT AMOUNT OF SURCHARGE AND CESS. I TAT KOLKATA IN THE CASE OF BHAGWATI OXYGAN LTD. VS. ACIT (2017) 88 TAXMANN. COM 28 (KOLKATA- TRIB) HELD THAT PAYMENT OF ENTIRE TAX INCLUDING SUR CHARGE AND CESS ELIGIBLE FOR MAT CREDIT U/S. 115JB OF THE ACT. IT IS ALSO OBSERVED THAT ASSESSEE HAS NOT DEBITED SURCHARGE AND CESS IN THE PROFIT AND LO SS ACCOUNT. IN THE LIGHT OF THE ABOVE FACTS AND FINDINGS OF THE VARIOUS JUDICIA L PRONOUNCEMENTS AS CITED I.T.A NO. 2137/AHD/2018 A.Y. 2015-16 PAGE NO. SAYAJI INDUSTRIES LTD. VS. DY. CIT 6 SUPRA IN THIS ORDER, WE CONSIDER THAT LD. CIT(A) IS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF MAT CREDIT OF THE ASSESSEE PERTAINING TO THE SURCHARGE AND CESS WHICH WAS ALREADY PAID BY THE ASSESSEE AS PART OF B OOK PROFIT U/S. 115JB(A) OF THE ACT. ACCORDINGLY, THIS APPEAL OF THE ASSES SEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-05-2021 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT A CCOUNTANT MEMBER AHMEDABAD : DATED 13/05/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,