DCIT 10(2), MUMBAI V. GODREJ OIL PALM LTD ( NOW MERGED WITH GODREJ AGROVET LTD), MUMBAI

ITA 5098/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87996 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 06-01-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 08-07-2013
• Court: TRIBUNAL
• Department Lawyers: SURCHARGE
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.5098/MUM/2013 ASSESSMENT YEAR: - 2011-12 DY. COMMISSIONER OF INCOME TAX, ROOM NO. 432, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS.` M/S GODREJ OIL PALM LTD (NOW MERGED WITH GODREJ AGROVET LTD.) GATE NO. 2 PIROJSHANGAR EASTERN |EXPRESS HIGHWAY VIKHROLI EAST, MUMBAI - 400079 APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 23.4.2013 OF CIT(A) FOR THE A.Y. 2011-12. THE REVENUE HAS RAISED FOLLOWING GROUNDS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT MAT CREDIT HAS TO BE DEDUCTED FROM THE TAX PAYABLE AND SURCHARGE AND EDUCATION CESS TO BE CALCULATED THERE ON. 2. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET WE NOTE THAT AN I DENTICAL ISSUE HAS BEEN CONSIDERED AND BY THIS TRIBUNAL IN THE CASE OF WYETH LIMITED VS. ACIT IN ITA NO. 6682/MUM/2011 VIDE ORDER DATED 9-01-2015 IN PARA 4 AND 5 AS UND ER:- REVENUE BY SHRI R. N. DSOUZA ASSESSEE BY SHRI SHRI AKRAM KHAN, SHRI TAHER KHOKHAWALA DATE OF HEARING 06.01.2015 DATE OF PRONOUNCEMENT 14.01.2015 ITA NO.5098/MUM/2013 ASSESSMENT YEAR: - 2011-12 2 | P A G E 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE AUTHORITIES BELOW HELD THA T THE MAT CREDIT IS ALLOWABLE AGAINST THE TAX LIABILITY INCLUSIVE OF SURCHARGE AN D CESS AND NOT THE TAX PAYABLE BEFORE THE SURCHARGE AND CESS. THE ASSESSEE HAS REL IED UPON THE JUDGMENT OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VACMENT INDIA (349 ITR 304) WHEREIN THE HONBLE HIGH COURT WHILE CONSIDERING TH E QUESTION OF SURCHARGE AND EDUCATION CESS ON TAX PAYABLE HAS BEEN CALCULATED B EFORE ALLOWING THE CREDIT OF MAT U/S 115JAA HELD IN PARA 5 TO 7 AS UNDER:- 5. THE ONLY QUESTION WHICH IS RAISED PERTAINS TO T HE COMPUTATION OF TAX IN ACCORDANCE WITH THE MODALITIES WHICH ARE PRE SCRIBED IN THE RELEVANT FORM, ITR-6. IN SO FAR AS IS MATERIAL, THE RELEVANT ENTRIES IN THE FORM (PART B-TTI) ARE AS FOLLOWS: 3. GROSS TAX PAYABLE (ENTER HIGHER OF 2C AND 1) 4. CREDIT UNDER SECTION 115JAA OF TAX PAID IN EARLI ER YEARS (IF 2C IS MORE THAN 1) (7 OF SCHEDULE MATC) 5. TAX PAYABLE AFTER CREDIT UNDER SECTION 115JAA [3 -4] 6. SURCHARGE ON 5 7 EDUCATION CESS, INCLUDING SECONDARY AND HIGHER ED UCATION CESS ON (5+6) 8. GROSS TAX LIABILITY (5+6+7) 6 THE AFORESAID ENTRIES LEAVE NO MANNER OF AMBIGUIT Y IN REGARD TO THE METHOD OF COMPUTATION OF TAX LIABILITY. ENTRY 3 REQ UIRES COMPUTATION OF THE GROSS TAX PAYABLE. UNDER ENTRY 4, CREDIT IS REQ UIRED TO BE GIVEN UNDER SECTION 115JAA OF THE ACT OF THE TAX PAID IN EARLIE R YEARS. ENTRY 5 REQUIRES A COMPUTATION OF THE TAX PAYABLE AFTER CREDIT UNDER SECTION 115JAA OF THE ACT. THE MATTER IS PLACED BEYOND DOUBT BY THE PAREN THESIS, WHICH INDICATES THAT TAX PAYABLE UNDER ENTRY 5 IS TO BE 'ARRIVED AT BY DEDUCTING THE CREDIT UNDER SECTION 115JAA OF THE ACT (UNDER ENTRY 3) FRO M THE GROSS TAX PAYABLE (UNDER ENTRY 4). THE SURCHARGE 'IS COMPUTED ON THE AMOUNT REFLECTED IN ENTRY 5. 7 THE TRIBUNAL HAS NOTED THAT FROM THE NEXT ASSESSM ENT YEAR, THE ASSESSMENT YEAR 2012-13, THE POSITIORI WAS MATERIAL LY ALTERED BUT, IN THE PRESENT CASE, SINCE THE DISPUTE RELATED TO THE ASSE SSMENT YEAR 2011-12, THE METHOD OF COMPUTATION, AS DIRECTED BY THE COMMISSIO NER {APPEALS) WAS PLAINLY IN ACCORDANCE WITH THE METHODOLOGY AS PROVI DED IN ITR-6. 'THE TRIBUNAL IN CONFIRMING THE ORDER OF THE COMMISSIONE R (APPEALS) HAS, HENCE, NOT COMMITTED ANY ERROR. THE APPEAL-WILL NOT GIVE RISE' TO ANY SUBSTANTIAL QUESTION OF LAW AND IS, ACCORDINGLY, DI SMISSED. ITA NO.5098/MUM/2013 ASSESSMENT YEAR: - 2011-12 3 | P A G E 5. THUS IT IS CLEAR THAT THE HONBLE HIGH COURT HAS TAKEN INTO ACCOUNT THE ORDER OF ENTRIES IN THE FORM ITR-6 FOR THE A.Y. 201 1-12 IN THE SAID CASE AND HELD THAT AS PER FORM ITR-6, THE MAT CREDIT HAS TO BE GI VEN AGAINST THE GROSS TAX PAYABLE EXCLUSIVE OF SURCHARGE /CESS AND ONLY AFTER THE MAT CREDIT TAX LIABILITY, THE SURCHARGE AND CESS HAS TO BE CALCULATED FOR THE PURPOSE OF WORKING OUT THE GRAND TAX LIABILITY. WE ALSO FIND MERIT AND SUBSTAN CE IN THE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT IF THE MAT CREDIT I S TAKEN INTO ACCOUNT WITHOUT INCLUDING THE SURCHARGE AND EDUCATION CESS THEN THE SURCHARGE AND EDUCATION CESS ON THE TAX LIABILITY HAS TO BE CALCULATED 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 AND EDUCATION CESS. THEREFO RE, THE MAT AS WELL AS NORMAL TAX BEFORE ALLOWING THE MAT CREDIT HAS TO BE TAKEN ON PARITY EITHER EXCLUSION OF SURCHARGE AND EDUCATION CESS OR INCLUSIVE OF SURCHA RGE AND EDUCATION CESS OR INCLUSIVE OF SURCHARGE AND EDUCATION CESS. ACCORDIN GLY WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO ALLOW THE MAT CREDIT AGAINST THE TAX LIABILITY PAYABLE BEFORE SURCHARGE AND EDUCATION CESS OR ALTERNATIVELY THE AMOUNT OF MAT CREDIT SHOULD ALSO BE INCLUSIVE OF SURCHARGE AND EDUCATION CESS AND THEN ALLOW THE CREDIT AGAINST TH E TAX PAYABLE INCLUSIVE OF SURCHARGE AND EDUCATION CESS. 3. FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) QUA THIS ISSUE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUCNED IN THE OPEN COURT ON THIS 14 TH DAY OF JANUARY 2015. SD/- SD/- (B.R. BASKARAN) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 14.01.2015 SKS SR. P.S,