M/s. DRESDNER KLEINWORT WASSERSTEIN SECURITIES (I) P. LTD. (IN LIQUIDATION), MUMBAI V. ACIT - 4(1), MUMBAI

ITA 273/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7489 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 25-02-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 10-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MOHANTY
• Assessee Lawyers: SANJEEV SHAH
• Keywords: TDS; Set aside; Liquidation
• Section: 143(3); 234B; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI D. MANMOHAN, HONBLE VICE PRESIDENT AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO.273/MUM/2007 ASSESSMENT YEAR: 2005-2006 DRESDNER KLEINWORT WASSERSTEIN SECURITIES (I) PVT. LTD. (IN LIQUIDATION) C/O. HEMANT SETHI, ADVOCATE 302 SATNAM BLDG., 3A, SION WEST, MUMBAI 400 022. PAN : AAACI1403J VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX 4(1), 6 TH FLR., AAYAKAR BHAVAN, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJEEV SHAH RESPONDENT BY : SHRI S.K. MOHANTY O R D E R PER D. MANMOHAN, V.P. THIS APPEAL, FILED AT THE INSTANCE OF THE ASSESSEE COMPANY, IS DIRECTED AGAINST THE ORDER DATED 09.10.2006 OF THE LEARNED C IT[A]-IV, MUMBAI AND IT PERTAINS TO ASSESSMENT YEAR 2001-2002. ONLY GRO UND URGED BY THE ASSESSEE READS AS UNDER: THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV ERRED I N LAW AND ON FACTS IN UPHOLDING THE ACTION OF THE ASS ISTANT COMMISSIONER OF INCOME-TAX-4(1) THEREBY NOT CONSIDE RING MAT CREDIT IN THE CALCULATION OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. THE APPELLANT THEREFORE, PRAYS THAT MAT CREDIT BE CONSIDERED WHILE CALCULATING THE INTEREST UNDER SEC TION 234B AND 234C OF THE ACT. 2. AT THE TIME OF HEARING, LEARNED COUNSEL SUBMITTE D THAT THE ISSUE STANDS SQUARELY COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JINDAL EXPORTS LTD. (179 TAXMAN 391 ) WHEREIN IT WAS HELD THAT MAT BE GIVEN CREDIT TO ARRIVE AT NET TAX PAYAB LE ON WHICH INTEREST HAS TO BE CALCULATED U/S.234B AND 234C OF THE ACT. ITA NO.273/MUM/2007 A.Y.: 2005-2006 2 3. WE HAVE ALSO HEARD THE LEARNED D.R. IN THIS REGA RD AND CAREFULLY PERUSED THE RECORD. IN THIS CASE, THE ASSESSMENT WAS COMPLETED ON 31.03.2004 AND TAX DEMAND OF RS.1,09,02,124/- (INCL UDING INTEREST U/S.234B AND 234C) WAS RAISED. WHILE WORKING OUT INTEREST U/S.234B AND 234C, MAT CREDIT WAS FIRST SET OFF AGAINST THE TOTA L TAX OF THE YEAR AND INTEREST WAS CHARGED ON THE BALANCE TAX. SUBSEQ UENTLY, THE ASSESSING OFFICER SOUGHT TO CHARGE INTEREST BEFORE SET OFF OF MAT CREDIT AND THUS ISSUED A NOTICE U/S.154 OF THE ACT. THOUGH THE ASSESSEE CONTENDED THAT, BEARING IN MIND INTENTION OF LEGISLATURE, MAT CREDIT HAS TO BE TREATED AT PAR WITH ADVANCE TAX/T.D.S., THE ASSESSING OFFICER WAS OF TH E OPINION THAT THE LANGUAGE OF THE SECTION DOES NOT PERMIT TREATING TH E MAT CREDIT ON PAR WITH ADVANCE TAX/T.D.S. HE ACCORDINGLY PASSED ORDER U/S.154 OF THE ACT TO RECOMPUTE INTEREST CHARGEABLE U/S.234B AND 234C OF THE ACT. THE LEARNED CIT[A] UPHELD THE ORDER OF THE ASSESSING OFFICER ON THE GROUND THAT THE SAID PROVISION WAS AMENDED WITH EFFECT FROM 01.04.2007 W HICH IMPLIES THAT FOR THE PRIOR PERIOD, MAT CREDIT SHOULD NOT BE ADJUSTED AGAINST TAX PAYABLE BY THE ASSESSEE FOR THE PURPOSE OF CALCULATION OF INTE REST U/S.234B AND 234C OF THE ACT. WE HAVE NOTICED THAT THE HONBLE DELHI HIGH COURT IN THE CASE JINDAL EXPORTS LTD., CONSIDERED THIS ISSUE IN A GRE AT DETAIL WHEREIN THE COURT TOOK NOTE OF THE AMENDED PROVISIONS AS WELL AS INTE NTION OF THE LEGISLATURE VIS-A-VIS CHARGE OF INTEREST U/S.234B AND 234C AND CONCLUDED AS UNDER: 55. THIS DISCUSSION LEADS US TO THE CONCLUSION THA T INTEREST U/S.234B AND 234C IS TO BE CHARGED AFTER T HE TAX CREDIT (MAT CREDIT) AVAILABLE U/S.115JAA IS SET OFF AGAINST TAX PAYABLE ON THE TOTAL INCOME OF THE YEAR IN QUESTION . THIS BEING THE POSITION AND RIVAL STANDS TAKEN BY THE REVENUE AND THE RESPONDENTS AS WELL AS THE DECISIONS OF BENCHES OF THE TRIBUNAL IN PHILLIPS INDIA LTDS.S CASE (SUPRA) AND CHEMPLAS T SANMAR LTD.S CASE (SUPRA) DO INDICATE THAT THE TRIBUNAL W AS CORRECT IN LAW IN HOLDING THAT RECTIFICATION COULD NOT BE MADE BY THE ASSESSING OFFICER U/S.154 OF THE INCOME-TAX ACT, 19 61 AS THE ISSUE REGARDING CHARGING G OF INTEREST U/S.234B OF THE ACT WITHOUT GIVING SET OFF OF MAT CREDIT AVAILABLE TO T HE ASSESSEE WAS HIGHLY DEBATABLE. 4. THE LEARNED D.R. COULD NOT PLACE BEFORE US ANY D ECISION OF A SUPERIOR FORUM IN SUPPORT OF THE STAND TAKEN BY THE REVENUE. UNDER THESE CIRCUMSTANCES, BY RESPECTFULLY FOLLOWING THE DECISI ON OF THE HONBLE DELHI ITA NO.273/MUM/2007 A.Y.: 2005-2006 3 HIGH COURT, WE HOLD THAT ORIGINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3) OF THE ACT DOES NOT CONTAIN ANY MISTAKE APPARENT FROM RECORD SINCE ISSUE CONCERNING SET OFF OF MAT CREDIT FROM THE TAX PAYABLE IS HIGHLY DEBATABLE. WE, THEREFORE, SET ASIDE THE OR DER OF THE LEARNED CIT[A] AS WELL AS ORDER PASSED BY THE ASSESSING OFFICER U/S.1 54 OF THE ACT AND ALLOW THE APPEAL FILED BY THE ASSESSEE. PRONOUNCED ACCORDINGLY, ON THIS THE 9 TH MARCH, 2010. SD/- (RAJENDRA SINGH) (ACCOUNTANT MEMBER) SD/- (D. MANMOHAN) (VICE PRESIDENT) MUMBAI, DATED 9 TH MARCH, 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-IV, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-IV, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH H, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.273/MUM/2007 A.Y.: 2005-2006 4 DATE INITIALS 1. DRAFT DICTATED ON 02.03.10 PS 2. DRAFT PLACED BEFORE AUTHOR 03.03.10 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/VP 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/V P 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER