ASST CIT LTU, MUMBAI V. ACC LTD, MUMBAI

ITA 2253/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87963 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: BASANT KASAT; ALPESH T DHAROD
• Section: 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 2253/MUM/2013 (ASSESSMENT YEAR: 2007-08) ACIT, LARGE TAX PAYER UNIT VS. M/S. ACC LIMITED CENTRE-1, 28TH FLOOR, WORLD TRADE CENTRE, CUFFE PARADE MUMBAI 400005 121, M.K. ROAD MUMBAI 400020 PAN - AAACT1507C APPELLANT RESPONDENT APPELLANT BY: MS. S. PADMAJA RESPONDENT BY: S/SHRI BASANT KASAT & ALPESH T. DHAROD DATE OF HEARING: 31.12.2014 DATE OF PRONOUNCEMENT: 16.01.2015 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A)-24, MUMBAI AND IT PERTAINS TO AY 2007-08. 2. THE ONLY GROUND URGED BY THE REVENUE READS AS UNDER : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED ALLOWING INTEREST U/S. 244A OF THE I.T. ACT, 1961 ON THE REFUND WITHOUT EXCLUDING MAT CREDIT COMPONEN T. HON'BLE KERALA HIGH COURT IN CIT VS. METROLLA STEELS LTD. ( 195 TAXMAN 319) HELD IN FAVOUR TO THE INCOME TAX DEPARTMENT. 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. THE ASSESSEE IS ENTITLED TO INTEREST UNDER SECTION 244A OF THE ACT ON THE TAX REFUNDABLE. THE MODE OF COMPUTATION OF TAX IS THE S UBJECT MATTER OF DISPUTE. ASSESSEE COMPUTED ITS TAX LIABILITY AND REFUND DUE AS UNDER: - PARTICULARS AMOUNTS ( ` `` ` ) AMOUNTS ( ` `` ` ) TAX LIABILITY ON TOTAL INCOME 3,11,74,74,822 LESS: SET OFF OF MAT CREDIT 9,30,88,851 3,02,43,85,971 ITA NO. 2253/MUM/2013 M/S. ACC LIMITED 2 ADD: SURCHARGE @10% 30,24,38,597 EDUCATION CESS @2% 6,65,36,491 3,39,33,61,060 LESS: UNILATERAL RELIEF FOR TAXES PAID IN SAUDI ARABIA 1,46,35,309 TDS 9,20,91,548 ADVANCE TAX 4,13,00,00,000 4,23,67,26,857 TAX REFUNDABLE 84,33,65,797 ACCORDING TO THE ASSESSEE MAT CREDIT IS THE FIRST A MOUNT TO BE SET OFF AGAINST TAX PAYABLE AND THEREAFTER TDS, ADVANCE TAX, ETC. H AS TO BE ADJUSTED AND THE BALANCE TAX REFUNDABLE SHOULD BE TAKEN INTO CONSIDE RATION FOR THE PURPOSE OF WORKING OUT THE INTEREST PAYABLE TO THE ASSESSEE. I N THIS REGARD THE ASSESSEE RELIED UPON THE DECISION OF THE ITAT JODHPUR IN THE CASE OF P.I. INDUSTRIES LTD. 104 TTJ 502 AND ALSO THE DECISION OF THE HON'B LE BOMBAY HIGH COURT IN THE CASE OF APAR INDUSTRIES LTD. 323 ITR 411. BASED ON THE VIEW TAKEN BY THE JURISDICTIONAL HIGH COURT THE CIT(A) DIRECTED THE A O TO COMPUTE INTEREST PAYABLE TO THE ASSESSEE UNDER SECTION 244A OF THE A CT. THE REVENUE IS AGGRIEVED BY THE VIEW TAKEN BY THE CIT(A) MAINLY ON ACCOUNT OF THE FACT THAT THE HON'BLE KERALA HIGH COURT, IN THE CASE OF METRO LLA STEELS LTD. (195 TAXMAN 319), OBSERVED THAT REFUND SHOULD BE GRANTED UNDER SECTION 244A AFTER REDUCING MAT CREDIT GIVEN FROM REFUND AMOUNT. THE HON'BLE KERALA HIGH COURT HAS TAKEN INTO CONSIDERATION THE PLAIN LANGUA GE OF SECTION 115JA OF THE ACT AND IN PARTICULAR THE FIRST PROVISO, WHICH READ S AS UNDER: - PROVIDED THAT NO INTEREST SHALL BE PAYABLE ON THE TAX CREDIT ALLOWED UNDER SUB-SECTION (1) THE VIEW OF THE HON'BLE KERALA HIGH COURT IS THAT T HE PROVISO EXPRESSLY BARS GRANT OF INTEREST ON TAX CREDIT REFUND AND AS A NAT URAL COROLLARY THE ASSESSEE IS ENTITLED TO INTEREST ONLY ON THE BALANCE REFUND. 4. THE LEARNED D.R. REFERRED TO THE EXPLANATORY NOTES ATTACHED TO THE FINANCE ACT, 2006 WHEREIN FOR THE FIRST TIME THE LE GISLATURE THOUGHT IT FIT TO GIVE BENEFIT OF MAT CREDIT ALSO AND THEY HAVE ALSO MADE IT CLEAR THAT THE ABOVE AMENDMENT WILL TAKE EFFECT FROM 01.04.2007. I N THE OPINION OF THE LEARNED COMMISSIONER D.R. THE ASSESSEE, FOR THE YEA R UNDER CONSIDERATION, IS NOT ELIGIBLE FOR THE BENEFIT SINCE THE PROVISO T O SECTION 115JAA PRIOR TO ITA NO. 2253/MUM/2013 M/S. ACC LIMITED 3 01.04.2007 RESTRICTS BENEFIT TO TAX CREDIT ALLOWED UNDER SUB-SECTION (1) ONLY WHICH EXCLUDES MAT CREDIT. 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE AMENDMENT IS ONLY CLARIFICATORY IN NATURE AND IT ANYWAY APPLIES TO AY 2007-08. EVEN OTHERWISE THE ISSUE STANDS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT AND THUS THE LEARNED CIT( A) IS JUSTIFIED IN DIRECTING THE AO TO GRANT INTEREST ON TAX REFUNDABLE AFTER TA KING INTO CONSIDERATION THE MAT CREDIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY P ERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE HON'BLE JURIS DICTIONAL HIGH COURT (SUPRA) WE ARE OF THE VIEW THAT THE ASSESSEE IS ENT ITLED TO INTEREST ON THE NET TAX REFUNDABLE. SINCE THE VIEW TAKEN BY THE LEARNED CIT(A) IS IN CONSONANCE WITH THE VIEW TAKEN BY THE HON'BLE BOMBAY HIGH COUR T AND ALSO THE CLARIFICATION ISSUED IN CIRCULAR NO. 14 OF 2006, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) AND THUS THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JANUARY, 2015. SD/- SD/- ( D. KARUNAKARA RAO ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 16 TH JANUARY, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 24, MUMBAI 4. THE CIT LTU, MUMBAI CITY 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.