Appeal Details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 2035 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
9 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-03-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
05-03-2020
Assessment Year
2015-2016
Appeal Filed On
04-06-2019
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 887/CHD/2019 / ASSESSMENT YEAR : 2015-16 M/S STEEL STRIPS WHEELS LTD., SCO 49-50, SECTOR 26, CHANDIGARH THE DCIT (CPC), BANGLORE JURISDICTIONAL ASSESSING OFFICER, ACIT, CENTRAL CIRCLE-II, CHANDIGARH ./PAN NO: AACCS3003L / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI ASHWANI KUMAR, CA ' ! / REVENUE BY : SHRI RAJESH DHANESHTHA, ADDL CI T # $ % /DATE OF HEARING : 05.03.2020 &'() % / DATE OF PRONOUNCEMENT : 18.03.2020 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 6.3.2019 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, GURGAON [HEREINAFTER REFERRED TO AS CIT (A)]. 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED BY THE LD. CIT(APPEALS) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(APPEALS) HAS ERRED ON LAW AND FACTS IN IGNORING THE METHODOLOGY ADOPTED BY CPC W.R.T. COMPUTATION OF MAT CREDIT IN VARIATION TO THAT PROVIDED IN SECTION 115JAA AND 115JB OF THE ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 2 INCOME TAX ACT AS WELL AS FORM ITR 6 AS PRESCRIBED BY CBDT. 3. THAT THE LD. CIT(APPEALS) HAS ERRED ON LAW AND FACTS IN CONFIRMING THE COMPUTATION OF ELIGIBLE MAT CREDIT AT RS.3,08,43,650/- WITHOUT INCLUDING SURCHARGE AND EDUCATION CESS WHILE ARRIVING AT THE AMOUNT OF TOTAL TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE INCOME TAX ACT AS WELL AS U/S 115JB OF THE ACT, WHEREAS THE ELIGIBLE MAT CREDIT ADJUSTMENT SHOULD HAVE BEEN COMPUTED AT RS.3,49,45,854/- BY INCLUDING THE SURCHARGE AND EDUCATION CESS. 4. WITHOUT PREJUDICE TO THE GROUND NO.L ABOVE, THE LD. CIT(APPEALS) HAS ERRED ON LAW AND FACTS IN ALLOWING THE CALCULATION OF TAX LIABILITY OF RS. 1,57,59,564/- ON ACCOUNT OF SURCHARGE AND EDUCATION CESS ON THE TAX PAYABLE BEFORE ALLOWING THE MAT CREDIT U/S 115JAA WHEREAS THE SAME SHOULD HAVE BEEN ALLOWED TO BE CALCULATED AT RS.L,16,57,358/-AFTER GRANTING THE MAT CREDIT. 5. THAT THE INTEREST OF RS.10,82,592/- U/S 234B AND RS.2,07,163/- U/S 234C HAS BEEN WRONGLY CHARGED, WHEREAS THE ASSESSE IS NOT LIABLE TO PAY ADDITIONAL INTEREST U/S 234B & 234C. THEREFORE, ADDITIONAL INTEREST U/S 234B & 234C MAY PLEASE BE DELETED. 6. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER AND AMEND ANY OF THE ABOVE GROUNDS OF APPEAL BEFORE THE SAME IS HEARD OR DISPOSED OF. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED VIDE AFORESAID GROUNDS IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL DATED 11.10.2018 IN THE C ASE OF DCIT LUDHIANA VS M/S AARTI STEELS LTD., IN ITA NO.16 19/CHD/2017, ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 3 WHEREIN, THE IDENTICAL ISSUE WAS RAISED AND THE TRI BUNAL AFTER DELIBERATING THE ISSUE AND ANALYZING THE PROVISIONS OF SECTION 115JA AND 2(43) OF THE ACT READ WITH RELEVANT CLAUSES OF THE FINANCE ACT HAS HELD THAT THE MAT CREDIT ALLOWABLE TO THE ASSESSEE IS IN CLUSIVE OF SURCHARGE AND CESS. THE RELEVANT PART OF THE ORDER OF THE TR IBUNAL DATED 11.10.2018 IN DCIT LUDHIANA VS M/S AARTI STEELS LTD. (SUPRA) IS REPRODUCED AS UNDER:- 5. AGGRIEVED BY THE SAME, THE REVENUE HAS COME IN APPEAL BEFORE US RAISING THE FOLLOWING GROUND:- WHETHER UPON THEFACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) S JUSTIFIED INLAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE MAT CREDIT INCLUDING SURCHARGE &EDU.CESS AGAINST THE TAX LIABILITY DETERMINED BY THE REVENUE? 6. DURING THE COURSE OF HEARING, BEFORE US, THE LD. DR POINTED OUT THAT THE APPEAL OF THE REVENUE FOR THE PRECEDING YEAR I.E. 2015-16 HAD BEEN ALLOWED BY THE ITAT AND THE ISSUE HAD CONSEQUENTLY BEEN DECIDED AGAINS T THE ASSESSEE. COPY OF THE ORDER PASSED IN ITA NO. 1523/CHD/2017 DT.24.04.18 WAS PLACED BEFORE US. IT WAS POINTED OUT FROM THE SAID ORDER THAT THE ITAT HAD DECIDED THE ISSUE AGAINST THE ASSESSEE FOLLOWING TH E DECISION OF ITAT, DELHI IN THE CASE OF M/S RICHA GLOBAL EXPORT PVT LTD IN ITA NO. 2303/2012 DATED 31.8.2012 .OUR ATTENTION WAS DRAWN TO THE FINDINGS OF THE ITAT AT PARA 15 TO 18 OF THE ORDER AS UNDER:- 15. WE HAVE GONE THROUGH THE ISSUE BEFORE US AND A LSO PERUSED THE CASE LAWS RELIED BY THE ASSESSEE AND WHICH HAVE BEEN ARGUED AS WRONGLY APPLIED TO THE INSTANT CASE BY THE LD. D R. IN THE CASE OF VARDHMAN TEXTILES LTD. IN ITA NO. 06 /CHD/2015, THE LD. DR ARGUED THAT IT DEALS WITH THE ORDER OF T HE ENTRY AND ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 4 HENCE NOT APPLICABLE TO THE PRESENT CASE. WE FIND T HAT THE GROUND TAKEN IN THAT CASE PERTAINS TO THE METHODOLOGY TO B E ADOPTED WHILE ALLOWING CREDIT OF MAT. THE COORDINATE BENCH OF ITA T IN PARA 11 OF THE ABOVE MENTIONED ORDER EXAMINED THE ISSUE WHE THER ADJUSTMENT ON ACCOUNT OF MAT CREDIT IS TO BE MADE A GAINST THE TAX DETERMINED UNDER THE NORMAL PROVISIONS OF THE INCOM E TAX ACT,1961, BEFORE LEVYING SURCHARGE AND EDUCATION CE SS OR OTHERWISE. IT WAS FOUND TO BE BASED ON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF DCIT VS. VACMEN T INDIA LTD. 369 ITR 304 WHEREIN THE HONBLE HIGH COURT AFTER GO ING THROUGH THE RELEVANT ENTRIES IN THE FORM ITR-6 AND BASED O N THE SEQUENCE OF GROSS TAX PAYABLE, CREDIT UNDER 115JAA, SURCHARG E, EDUCATION CESS AND THEN THE GROSS TAX LIABILITY HELD THAT THE RE WAS NO AMBIGUITY WITH REGARD TO COMPUTATION OF TAX LIABILI TY. THE MAIN ISSUE DEALT IN THAT CASE WAS WHETHER ADJUSTMENT CAN BE RECTIFIED UNDER SECTION 154 OR NOT AND THE TRIBUNAL HELD THAT THE PROCEEDINGS UNDER SECTION 154 IN THAT CASE WERE NOT LEGALLY VALID. SIMILARLY THE JUDGMENTS IN THE CASE OF DCIT VS. VAC MET INDIA PVT. LTD. ITA NO. 93/AGRA/2014. AND DCIT VS. GODREJ OIL PALM LTD. ITA NO. IN ITA NO. 5098/MUM/2013 DEALT WITH THE ISS UE WHETHER SURCHARGE AND EDUCATION CESS SHOULD BE LEVIED AFTER GIVING MAT CREDIT OR NOT WHICH IS ALSO NOT THE ISSUE BEFORE US IN THE INSTANT CASE. 16. WITH REGARD TO THE CASE OF M/S RICHA GLOBAL EXP ORT PRIVATE LTD. ITA NO. 2303/2012, WE FIND THAT THE CASE DEALS WITH WHETHER THE AMOUNT OF MAT CREDIT UNDER SECTION 115JA WOULD INCLUDE SURCHARGE AND CESS ON THE TAX PAYABLE ON THE BOOK P ROFITS WHICH IS THE SIMILAR GROUND IN THE PRESENT APPEAL. 17. THE COORDINATE BENCH OF ITAT DELHI IN ITS JUDGM ENT DT. 31/08/2012 HELD AS UNDER: WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FOR UNDERSTANDING THE AMOUNT OF TAX CREDIT AVAILABLE U/ S 115JAA FIRST OF ALL, IT IS NECESSARY TO UNDERSTAND THE MEA NING OF INCOME TAX AS CONTEMPLATED BY SECTION 115JB OF THE ACT. SECTION 115JBREADS AS UNDER:- 'SPECIAL PROVISION FOR PAYMENT OF TAX BY CERTAIN CO MPANIES. 115JB. (1) NOTWITHSTANDING ANYTHING CONTAINED IN AN Y OTHER PROVISION OF THIS ACT, WHERE IN THE CASE OF AN ASSE SSEE, BEING ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 5 A COMPANY, THE INCOME-TAX, PAYABLE ON THE TOTAL INC OME AS 6 ITA NO2303/DEL/2012 COMPUTED UNDER THIS ACT IN RESP ECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2010, IS LESS THAN FIFTEEN PER CENT OF ITS BOOK PROFIT, SUCH BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AN D THE TAX PAYABLE BY THE ASSESSEE ON SUCH TOTAL INCOME SHALL BE THE AMOUNT OF INCOME-TAX AT THE RATE OF FIFTEEN PER CEN T. (2) EVERY ASSESSEE, BEING A COMPANY, SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE ITS PROFIT AND LOSS ACCOUN T FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVI SIONS OF PARTS II AND III OF SCHEDULE VI TO THE COMPANIES AC T, 1956 (1 OF 1956)}' THE ABOVE SECTION CLEARLY TALKS THAT SUCH BOOK PROF IT SHALL BE DEEMED TO BE TOTAL INCOME OF THE ASSESSEE AND TAX P AYABLE BY THE ASSESSEE ON SUCH TOTAL INCOME SHALL BE THE AMOU NT OF INCOME TAX AT SPECIFIED RATE OF TAX WHICH WAS 15% F OR THE RELEVANT YEAR UNDER CONSIDERATION. THE SECTION DOES NOT TALK ABOUT THE INCOME TAX AS INCREASED BY SURCHARGE & ED UCATION TAX. IT TALKS ABOUT ONLY INCOME TAX. WHEREVER STATU TE HAS REQUIRED INCOME TAX TO INCLUDE SURCHARGE AND EDUCAT ION TAX, IT HAS SPECIFICALLY DONE IT LIKE IN EXPLANATION 2 T O SECTION 115JB. SIMILARLY FORM 29B WHICH IS FILED ALONG WITH RETURN OF INCOME WHERE MAT IS APPLICABLE AT POINT 14 IT ST ATES THAT THE AMOUNT OF INCOME TAX PAYABLE BY THE COMPANY WOU LD BE 15% OF COL. 12 I.E. BOOK PROFITS, IT DOES NOT STATE SURCHARGE OR EDUCATION CESS. THEREFORE, IT EMERGES THAT MAT P AYABLE U/S 115JB IS ONLY INCOME TAX AND DOES NOT INCLUDE S URCHARGE OR EDUCATION CESS. THEREFORE, IF ONLY INCOME TAX IS PAID UNDER THE PROVISIONS OF SECTION 115JB IT IS NATURAL THAT TAX CREDIT U/S 115JAA WILL ONLY BE OF INCOME TAX AND NO T OF SURCHARGE AND EDUCATION CESS. THIS POINT IS FURTHER CLARIFIED BY INTIMATION U/S 143(1) SENT TO ASSESSEE WHEREIN T AX PAYABLE U/S 115JB HAS BEEN CALCULATED AS ONLY INCOME TAX 7 ITA NO2303/DEL/2012 AND NO SURCHARGE OR EDUCATION CESS HAS BEEN INCLUDED IN THE AMOUNT OF INCOME TAX. 8. THE SUBMISSION OF LD AR THAT TAX INCLUDES SURCHA RGE AND EDUCATION CESS AS PER EXPLANATION 2 OF SECTION 115J B IS CORRECT TO THE EXTENT THAT EXPLANATION 2 WAS INSERT ED TO CLARIFY THE MEANING OF TAX AS CONTEMPLATED IN CLAUS E (A) OF ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 6 EXPLANATION (1) WITH RESPECT TO CALCULATION OF BOOK PROFIT WHICH IS READ AS UNDER:- 'EXPLANATION-1 FOR THE PURPOSE OF THIS SECTION BOOK PROFIT MEANS THE NET PROFIT AS SHOWN IN THE P&L ACCOUNT FO R THE RELEVANT PREVIOUS YEAR PREPARED UNDER SUB SECTION ( 2) AS INCREASED BY :- A) THE AMOUNT OF INCOME TAX PAID OR PAYABLE AND THE PROVISIONS THEREOF: B) XXXXX C) XXXXX D) XXXXX E) XXXXX F) XXXXX THE ABOVE EXPLANATION 1 CLARIFIES THAT EXP LANATION 2 TO SECTION 115JB WAS INSERTED TO DEFINE THE MEANING OF TAX (WHICH OF COURSE INCLUDES EDUCATION TAX AND SURCHAR GE) FOR THE PURPOSE OF CALCULATING BOOK PROFITS LIABLE TO T AX U/S 115JB AND IT CANNOT BE EXTENDED TO SECTIONS 115JB OR SECTION 115JAA OF THE ACT. IN VIEW OF THE ABOVE PROVISIONS, WE ARE OF THE CONS IDERED OPINION THAT TAX CREDIT U/S 115JAA WAS RIGHTLY GIVE N AND WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD CIT(A). 18. SINCE WE FIND THE FACTS AND CIRCUMSTANCES OF TH E CASE AND THE GROUNDS BEFORE US TO BE ADJUDICATED ARE SQUARELY C OVERED BY THE JUDGMENT BY THE COORDINATE BENCH, THE APPEAL OF THE REVENUE IS HEREBY ALLOWED 7. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTENDED THAT THE ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN A NUMBER OF DECISIONS AS UNDER: 1 . VIRTUSA (INDIA) PVT LTD VS. DCIT (2016) 3 TMI 245 (HYD) DATED 4.3.2016 2 WYETH LTD VS. ACIT,ITA NO. 6682/2011 ASSESSMENT YEAR 2007-08 DATED 9.1.2015 (MUMBAI) 3 AMQ AGRO INDIA PVT LTD VS. ACIT (2016) 5 TMI 485 (DELHI) DATED 29.4.2016 4 GARWARE WALL ROPES LTD V ADDL. CIT AND VICE VERSA 92016) 8 TMI 906 (MUM) DATED 13.7.2016 5 DCIT VS. VACMET INDIA LTD ITA NO.94/2014 ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 7 A.Y. 2011-12 (AGRA) DATED 22.5.2014 6 ACIT V DIVIS LABORATORIES LTD, ITA NO. 596/2017 A.Y. 2011-2 (HYD) DATED 29.11.2017 7 DCIT VS. GODREJ OIL PALM LTD ITA NO. 5098/2013 A.Y. 2011-12 (MUMBAI) DATED 14.1.2015 8 DCIT VS. SAINT GOBAINGYPROC INDIA LTD ITA NO. 2122/2015 A.Y. 2013-14 (CHENNAI) DATED 3.2.2016 9 VALUE SOURCE TECHNOLOGIES PVT LTD VS. DCIT ITA NO.449/2016 A.Y. 2011-12 (CHENNAI) DATED 19.5.2016 1 0 VARDHMAN TEXTILES LTD VS. ACIT ITA NO.6/2015, A.Y. 2010-11 & 7/2015 A.Y. 2009- 10 (CHD) DATED 12.7.2016 8. LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE DECISION RENDERED IN THE CASE OF M/S RICHA GLOBAL EXPORT PVT. LTD HAD BEEN CONSIDERED IN THE AFORESAID DECISIONS WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE AND THEREFORE, THE RATIO LAI D DOWN IN THE SAID DECISIONS WOULD APPLY IN THE PRESENT CASE ALSO. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. AS POINTED OUT ABOVE TO US, THE SOLE ISSUE BEFORE US IS WHETHER THE MAT CREDIT ALLOWABLE TO TH E ASSESSEE AS PER THE PROVISIONS OF SECTION 115JAA OF THE ACT, INCLUDES BESIDES THE BASIC SPECIFIED RATE OF TAX, SURCHARGE AND CESS ALSO. THE RELEVANT SECTION, THEREFORE, FOR THE PURPOSE OF ADJUDICATING THE ISSU E BEFORE US, IS SECTION 115JAA AND MORE SPECIFICALLY SUB SECTION (1A) AND (2A), SINCE THEY RELATE TO CRE DIT OF TAXES PAID EARLIER U/S 115JB OF THE ACT, WHICH IS THE FACT IN THE PRESENT CASE, WHILE SUB-SECTION (1) & (2) RELATE TO CREDIT OF TAXES PAID U/S 115JA OF THE ACT. THE PROVISIONS OF SECTION 115JAA (1A) AND (2A) ARE REPRODUCED HEREIN UNDER FOR CLARITY : TAX CREDIT IN RESPECT OF TAX PAID ON DEEMED INCOME RELATING TO CERTAIN COMPANIES. ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 8 115JAA. (1A) WHERE ANY AMOUNT OF TAX IS PAID UNDER SUB-SECTION (1) OF SECTION 115JB BY AN ASSESSEE, BEING A COMPAN Y FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF AP RIL, 2006 AND ANY SUBSEQUENT ASSESSMENT YEAR, THEN, CRED IT IN RESPECT OF TAX SO PAID SHALL BE ALLOWED TO HIM IN A CCORDANCE WITH THE PROVISIONS OF THIS SECTION.] . . . (2A) THE TAX CREDIT TO BE ALLOWED UNDER SUB-SECTIO N (1A) SHALL BE THE DIFFERENCE OF THE TAX PAID FOR ANY ASS ESSMENT YEAR UNDER SUB-SECTION (1) OF SECTION 115JB AND THE AMOUNT OF TAX PAYABLE BY THE ASSESSEE ON HIS TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE OTHER PROVISIONS OF THIS ACT: 10. AS PER THE ABOVE, SUB SECTION (1A) ALLOWS CREDI T OF TAXES PAID UNDER THE DEEMING PROVISIONS OF SECTION 115JB.THE QUANTUM OF TAX CREDIT SO ALLOWED IS SET OUT IN SUB-SECTION (2A) WHICH STATES THE SA ME TO BE THE DIFFERENCE OF THE TAX PAID U/S 115JB AND THE TAX PAYABLE AS PER NORMAL PROVISIONS I.E. CREDI T TO THE EXTENT OF EXCESS/SURPLUS TAX PAID UNDER THE SPECIAL PROVISIONS OF SECTION 115JB OF THE ACT AS COMPARED TO THE NORMAL TAX PAYABLE BY THE ASSESSEE IS ALLOWED. NOW, FOR THE PURPOSE OF DETERMINING THE MAT CREDIT ALLOWABLE TO THE ASSESSEE AS PER SUB SECTION (2A) OF SECTION 115JAA OF THE ACT, IT IS IMPORTANT TO DETERMINE TWO THINGS TAX PAID U/S 115JB OF THE ACT AND TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT. TAX HAS BEEN DEFINED UNDER SECTION 2(43) OF THE ACT AS UNDER : 2.IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRE S:- . . ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 9 . ][( 43 ) TAX IN RELATION TO THE ASSESSMENT YEAR COMMENCI NG ON THE 1ST DAY OF APRIL, 1965, AND ANY SUBSEQUENT ASSE SSMENT YEAR MEANS INCOME-TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT, AND IN RELATION TO ANY OTHER ASSESSMENT YEAR INCOME -TAX AND SUPER-TAX CHARGEABLE UNDER THE PROVISIONS OF THIS A CT PRIOR TO THE AFORESAID DATE [AND IN RELATION TO THE ASSESSMENT Y EAR COMMENCING ON THE 1ST DAY OF APRIL, 2006, AND ANY S UBSEQUENT ASSESSMENT YEAR INCLUDES THE FRINGE BENEFIT TAX PAY ABLE UNDER SECTION 115WA];] 11. THUS TAX MEANS THE INCOME TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT. THE RATE OF INCOME TAX CHAR GED /CHARGEABLE EACH YEAR IS PROVIDED IN THE FINANCE AC T OF EACH YEAR,WHICH IS AN ACT GIVING EFFECT TO THE FINANCIAL PROPOSALS OF THE CENTRAL GOVERNMENT FOR EACH YEAR. ,SINCE IN THE PRESENT CASE, CREDIT IS BEING CLAIMED OF TAXES PAI D U/S 115JB RELATING TO A.Y 2006-07 & 2007-08 , FINANCE A CT 2006 & 2007 NEED TO BE REFERRED TO ,FOR DETERMININ G THE TAX PAYABLE U/S 115JB OF THE ACT. CHAPTER II OF THE FI NANCE ACT OUTLINES THE RATE OF TAX APPLICABLE FOR THE RELEVA NT YEARS. CLAUSE (3) OF THE SAME PROVIDES THAT TAX RATE FOR T HE PURPOSE OF SECTION 115JB ARE THAT SPECIFIED IN THE SECTION. THE SAID CLAUSE IS REPRODUCED HEREUNDER: (3) IN CASES TO WHICH THE PROVISIONS OF CHAPTER XI I OR CHAPTER XII- A OR CHAPTER XII-H OR SECTION 115JB OR SUB-SECTION (1A) OF SECTION 161 OR SECTION 164 OR SECTION 164A OR SECTION 167B OF THE INCOME- TAX ACT APPLY, THE TAX CHARGEABLE SHALL BE DETERMIN ED AS PROVIDED IN THAT CHAPTER OR THAT SECTION, AND WITH REFERENCE TO THE RATES IMPOSED BY SUB-SECTION (1) OR THE RATES AS SPECIFIE D IN THAT CHAPTER OR SECTION, AS THE CASE MAY BE TAX RATE SPECIFIED U/S 115JB OF THE ACT, IS AS UN DER:- SPECIAL PROVISION FOR PAYMENT OF TAX BY CERTAIN COMPANIES. 115JB. (1) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, WHERE IN THE CASE OF A N ASSESSEE, BEING A COMPANY, THE INCOME-TAX, PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THIS ACT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMME NCING ON OR AFTER THE 1ST DAY OF APRIL, 2007, IS LESS THA N TEN PER CENT OF ITS BOOK PROFIT, SUCH BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND THE TAX PAY ABLE BY ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 10 THE ASSESSEE ON SUCH TOTAL INCOME SHALL BE THE AMOU NT OF INCOME-TAX AT THE RATE OF TEN PER CENT. THUS THE SPECIFIED RATE OF TAX U/S 115JB OF THE AC T IS 10% OF THE BOOK PROFITS. THE SECOND PROVISO TO CLAUSE 3 OF THE FINANCE ACT, STATES THAT THE AMOUNT OF INCOME TAX SO COMPUTED SH ALL BE INCREASED BY A SURCHARGE.THE SAID PROVISO IS REPROD UCED HEREUNDER: PROVIDED FURTHER THAT IN RESPECT OF ANY INCOME CHARGEABLE TO TAX UNDER SECTIONS 115A, 115AB, 115AC , 115ACA, 115AD, 115B, 115BB, 115BBA, 115E AND 115JB OR FRINGE BENEFITS CHARGEABLE TO TAX UNDER SECTION 115WA OF THE INCOME-TAX ACT, THE AMOUNT OF INCOME-TAX COMPUT ED UNDER THIS SUBSECTION SHALL BE INCREASED BY A SURCH ARGE FOR PURPOSES OF THE UNION, CALCULATED,- CLAUSE 11 OF THE FINANCE ACT FURTHER INCREASES THE TAX BY AN EDUCATION CESS. THE SAID CLAUSE IS REPRODUCED HEREU NDER: (11) THE AMOUNT OF INCOME-TAX AS SPECIFIED IN SUB- SECTIONS (1) TO (10) AND AS INCREASED BY A SURCHARG E FOR PURPOSES OF THE UNION CALCULATED IN THE MANNER PROVIDED THEREIN, SHALL BE FURTHER INCREASED BY AN ADDITIONAL SURCHARGE FOR PURPOSES OF THE UNION, TO BE CALLED THE 'EDUCATION CESS ON INCOME-TAX', SO AS TO FULFILL THE COMMITMENT OF THE GOVERNMENT TO PROVIDE AND FINANCE UNIVERSALISED QUALITY BASIC EDUCATION, CALCULATED AT THE RATE OF TWO PER CENT, OF SUCH INC OME- TAX AND SURCHARGE. THEREFORE THE INCOME TAX LEVIED U/S 115JB AS SPECIF IED BY THE FINANCE ACT, IS THE TAX RATE AS SPECIFIED IN THE SECTION INCREASED BY SURCHARGE & EDUCATION CESS. IT IS PERTINENT TO NOTE THAT THE FINANCE ACT SPECIFIES TH AT SURCHARGE AND CESS INCREASE THE TAX LEVIED. IT FOLLOWS THEREFORE THAT SURCHARGE AND CESS ARE PART OF TAX LEVIED. AND IT CAN THEREFORE SAFELY BE CONCLUDE D THAT TAXES PAID U/S 115JB INCLUDE SURCHARGE AND CES S ALONGWITH THE BASIC RATE OF TAX SPECIFIED IN THE SE CTION. ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 11 WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE AP EX COURT IN THE CASE OF CIT VS K. SRINIVASAN 83 ITR 34 6 (SC) HOLDING THAT TAXES WOULD INCLUDE SURCHARGE AND CESS. THE RELEVANT FINDINGS OF THE APEX COURT AT PA RA OF THE ORDER IS AS UNDER: THE ABOVE LEGISLATIVE HISTORY OF THE FINANCE ACTS, AS ALSO THE PRACTICE, WOULD APPEAR TO INDICATE THAT THE TER M 'INCOME- TAX' AS EMPLOYED IN S. 2 INCLUDES SURCHARGE AS ALSO THE SPECIAL AND THE ADDITIONAL SURCHARGE WHENEVER PROVI DED WHICH ARE ALSO SURCHARGES WITHIN THE MEANING OF ART . 271 OF THE CONSTITUTION. THE PHRASEOLOGY EMPLOYED IN THE F INANCE ACTS OF 1940 AND 1941 SHOWED THAT ONLY THE RATES OF INCOME-TAX AND SUPER- TAX WERE TO BE INCREASED BY A SURCHARGE FOR THE PURPOSE OF THE CENTRAL GOVERNMENT . IN THE FINANCE ACT OF 1958, THE LANGUAGE USED SHOWED THAT INCOME-TAX WHICH WAS TO BE CHARGED WAS TO BE INCREA SED BY A SURCHARGE FOR THE PURPOSES OF THE UNION. THE W ORD 'SURCHARGE' HAS THUS BEEN USED TO EITHER INCREASE T HE RATES OF INCOME-TAX AND SUPER-TAX OR TO INCREASE THESE TA XES. THE SCHEME OF THE FINANCE ACT OF 1971 APPEARS TO LEAVE NO ROOM FOR DOUBT THAT THE TERM 'INCOME-TAX' AS USED IN S. 2 INCLUDES SURCHARGE. 8. ACCORDING TO ART. 271, NOTWITHSTANDING ANYTHING IN ARTS. 269 AND 270, PARLIAMENT MAY AT ANY TIME INCREASE AN Y OF THE DUTIES OR TAXES REFERRED TO IN THOSE ARTICLES B Y A SURCHARGE FOR THE PURPOSES OF THE UNION AND THE WHO LE PROCEEDS OF ANY SUCH SURCHARGE SHALL FORM PART OF T HE CONSOLIDATED FUND OF INDIA. ART. 270 PROVIDES FOR T AXES LEVIED AND COLLECTED BY THE UNION AND DISTRIBUTED B ETWEEN THE UNION AND THE STATES. CLAUSE (1) SAYS THAT TAXE S ON INCOME OTHER THAN AGRICULTURAL INCOME SHALL BE LEVI ED AND COLLECTED BY THE GOVERNMENT OF INDIA AND DISTRIBUTE D BETWEEN THE UNION AND THE STATES IN THE MANNER PROV IDED IN CL. (2). ART. 269 DEALS WITH TAXES LEVIED AND CO LLECTED BY THE UNION BUT ASSIGNED TO THE STATES. THE PROVISION S OF ART. 268 WHICH IS THE FIRST ONE UNDER THE HEADING 'DISTR IBUTION OF REVENUE BETWEEN THE UNION AND THE STATES' RELATE TO DUTIES LEVIED BY THE UNION BUT COLLECTED AND APPROPRIATED BY THE STATES. THUS, THESE ARTICLES DEAL WITH THE LEVY, CO LLECTION AND DISTRIBUTION OF THE PROCEEDS OF THE TAXES AND D UTIES MENTIONED THEREIN BETWEEN THE UNION AND THE STATES. THE LEGISLATIVE POWER OF PARLIAMENT TO LEVY TAXES AND D UTIES IS ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 12 CONTAINED IN ARTS. 245 AND 246(1) READ WITH THE REL EVANT ENTRIES IN LIST I OF THE SEVENTH SCHEDULE. 9. AS MENTIONED BEFORE, THE LEGISLATIVE ENTRY 82 IN L IST I RELATES TO TAXES ON INCOME OTHER THAN AGRICULTURAL INCOME; INCOME-TAX, SUPER-TAX AND SURCHARGE WOULD ALL FALL UNDER THIS ENTRY. IT IS EXERCISE OF THE LEGISLATIVE POWER CONFERRED BY THAT ENTRY THAT THE UNION PARLIAMENT ENACTS THE PRO VISION IN THE FINANCE ACT EACH YEAR RELATING TO THEM. IT IS T HAT ACT WHICH AUTHORISES THESE TAXES TO BE CHARGED AND PRES CRIBES THE RATES AT WHICH THEY CAN BE CHARGED. SEC. 4 OF T HE ACT SIMPLY PROVIDES THAT WHERE ANY CENTRAL ACT ENACTS T HAT INCOME-TAX SHALL BE CHARGED FOR ANY ASSESSMENT YEAR AT ANY RATE OR RATES INCOME-TAX AT THAT RATE OR THOSE RATES SHALL BE CHARGED IN ACCORDANCE THERETO AND SUBJECT TO THE PROVISIONS OF THE ACT. SEC. 95, WHICH WAS OMITTED B Y THE FINANCE ACT OF 1965, CONTAINED SIMILAR PROVISION WI TH REGARD TO SUPER-TAX. ALTHOUGH UNDER THE ACT S. 4 IS THE CHARGING SECTION YET INCOME-TAX CAN BE CHARGED ONLY WHERE THE CENTRAL ACT WHICH, IN THE PRESENT CASE, WILL BE THE FINANCE ACT, ENACTS THAT INCOME- TAX SHALL BE CHARG ED FOR ANY ASSESSMENT YEAR AT THE RATE OR RATES SPECIFIED THEREIN. THE DISTINCTION MADE BY THE HIGH COURT THAT THE SUR CHARGES ARE LEVIED ONLY UNDER THE FINANCE ACT AND INCOME- T AX UNDER THE ACT MAY NOT HOLD GOOD IF THE ABOVE VIEW W HICH HAS BEEN PRESSED ON BEHALF OF THE REVENUE WERE TO B E ACCEPTED. IN OUR JUDGMENT IT IS UNNECESSARY TO EXPR ESS ANY OPINION IN THE MATTER BECAUSE THE ESSENTIAL POINT F OR DETERMINATION IS WHETHER SURCHARGE IS AN ADDITIONAL MODE OR RATE FOR CHARGING INCOME-TAX. 10. THE MEANING OF THE WORD 'SURCHARGE' AS GIVEN IN TH E WEBSTER'S NEW INTERNATIONAL DICTIONARY INCLUDES, AM ONG OTHERS, 'TO CHARGE (ONE) TOO MUCH OR IN ADDITION... '; ALSO 'ADDITIONAL TAX'. THUS, THE MEANING OF SURCHARGE IS TO CHARGE IN ADDITION OR TO SUBJECT TO AN ADDITIONAL O R EXTRA CHARGE. IF THAT MEANING IS APPLIED TO S. 2 OF THE F INANCE ACT, 1963, IT WOULD LEAD TO THE RESULT THAT INCOME-TAX A ND SUPER- TAX WERE TO BE CHARGED IN FOUR DIFFERENT WAYS OR AT FOUR DIFFERENT RATES WHICH MAY BE DESCRIBED AS : (I) THE BASIC CHARGE OR RATE (IN PART I OF THE FIRST SCHEDULE); ( II) SURCHARGE; (III) SPECIAL SURCHARGE; AND (IV) ADDITIONAL SURCHA RGE CALCULATED IN THE MANNER PROVIDED IN THE SCHEDULE. READ IN ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 13 THIS WAY, THE ADDITIONAL CHARGES FORM A PART OF THE INCOME- TAX AND SUPER-TAX. IT IS POSSIBLE TO ARGUE, AND THA T ARGUMENT HAS BEEN COMMENDED ON BEHALF OF THE REVENU E, THAT THE WORD 'SURCHARGE' HAS BEEN USED IN ART. 271 FOR THE PURPOSE OF SEPARATING IT FROM THE BASIC CHARGE OF A TAX OR DUTY FOR THE PURPOSE OF DISTRIBUTING THE PROCEEDS O F THE SAME BETWEEN THE UNION AND THE STATES. THE PROCEEDS OF THE SURCHARGE ARE EXCLUSIVELY ASSIGNED TO THE UNION . EVEN IN THE FINANCE ACT ITSELF IT IS EXPRESSLY STATED THAT THE SURCHARGE IS MEANT FOR THE PURPOSE OF THE UNIO 12. WE SHALL NOW REFER TO EXPLANATION 2 TO SECTION 115JB WHICH READS AS UNDER:- EXPLANATION 2 TO SECTION 115JB EXPLANATION 2.FOR THE PURPOSES OF CLAUSE (A) OF EX PLANATION 1, THE AMOUNT OF INCOME-TAX SHALL INCLUDE (I) ANY TAX ON DISTRIBUTED PROFITS UNDER SECTION 1 15-O OR ON DISTRIBUTED INCOME UNDER SECTION 115R ; (II) ANY INTEREST CHARGED UNDER THIS ACT; (III) SURCHARGE, IF ANY, AS LEVIED BY THE CENTRAL A CTS FROM TIME TO TIME; (IV) EDUCATION CESS ON INCOME-TAX, IF ANY, AS LEVIE D BY THE CENTRAL ACTS FROM TIME TO TIME; AND (V) SECONDARY AND HIGHER EDUCATION CESS ON INCOME- TAX, IF ANY, AS LEVIED BY THE CENTRAL ACTS FROM TIME TO TIM E . A BARE PERUSAL OF THE ABOVE WOULD REVEAL THAT THE S AID EXPLANATION ALSO CORROBORATES WHAT HAS BEEN STATED BY US ABOVE AND WHAT HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF K SRINIVASAN (SUPRA) T HAT TAXES PAID INCLUDE SURCHARGE AND CESS. AS A NATURAL COROLLARY, TAX PAID UNDER THE NORMAL PROVISIONS WOULD ALSO INCLUDE SURCHARGE AND CESS. THUS, WHAT FOLLOWS FROM THE AFORESAID DISCUSSION IS THAT TAX CREDIT TO BE COMPUTED WOULD BE AFTER INCLUSION OF SURCHARGE AND CESS FOR BOTH THE TAX P AID ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 14 U/S 115JB OF THE ACT AND TAX PAYABLE AS PER NORMAL PROVISIONS OF THE ACT. 13. WE SHALL NOW BE DEALING WITH THE QUESTION OF POINT AT WHICH CREDIT OF MAT TO BE GIVEN .SECTION115JAA(4 ) OF THE ACT DEALS WITH THE SAME STATING AS UNDER:- 115JAA. (1) (4) THE TAX CREDIT SHALL BE ALLOWED SET-OFF IN A YE AR WHEN TAX BECOMES PAYABLE ON THE TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT OTHER THAN SECTION 115JA OR SECTION 115JB, AS THE C ASE MAY BE. AS IS CLEAR FROM THE ABOVE TAX CREDIT IS TO BE ALLOWED WHEN TAX BECOMES PAYABLE. DERIVING FROM THE DEFINITION OF TAX PAYABLE AS TO INCLUDE SURCHARGE A ND CESS, WHAT IS ARRIVED AT IS THAT TAXES PAYABLE UNDE R THE NORMAL PROVISIONS INCLUDING SURCHARGE AND CESS IS T O BE FIRST CALCULATED AND THE CREDIT OF MAT,INCLUDING SURCHARGE AND CESS IS TO BE ALLOWED. IN VIEW OF THE ABOVE, AFTER ANALYZING THE PROVISIONS OF SECTION 115JAA, 115JB AND 2(43) OF TH E ACT, READ ALONGWITH THE RELEVANT CLAUSES OF THE FIN ANCE ACT, WE HAVE NO HESITATION IN HOLDING THAT THE MAT CREDIT ALLOWABLE TO THE ASSESSEE IS INCLUSIVE OF SURCHARGE AND CESS. ON THE SAME ANALOGY, THE COORDINATE BENCH OF THE ITAT HAS HELD THAT MAT CREDIT WILL INCLUDE SURCHARG E AND CESS ,IN ITS DECISION IN THE CASE OF VIRTUSA (I NDIA) PVT.LTD(SUPRA).THE FINDINGS IN THE SAID CASE ARE AS UNDER: CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND MATERIAL FACTS ON THE RECORD. THE PROVISIONS OF SECTION 115JB IN BRIEF ARE: EVERY ASSESSMENT YEAR, TWO PARALLEL COMPUTATIONS ARE CONTEMPLATED. ONE COMPUTATION OF TOTAL INCOME IN ACCORDANCE WITH THE NORMAL PROVISIONS OF THE I.T. ACT AND ANOTHER IS THE ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 15 COMPUTATION OF BOOK PROFIT AS STIPULATED U/S 115JB. IF THE INCOME TAX PAYABLE ON THE TOTAL INCOME IS LESS THAN 18.5% OF THE BOOK PROFIT COMPUTED U/S 115JB, THEN THE BOOK PROFIT SO COMPUTED SHALL BE DEEMED TO BE THE TOTAL INCOME, THEN THE BOOK PROFIT SO COMPUTED SHALL BE DEEMED TO BE THE TOTAL INCOME AND THE COMPANY SHALL PAY TAX @ 18.5% THEREON. THE AMOUNT SO PAID AS THE MAT SHALL BE AVAILABLE TO THE CREDIT OF THE COMPANY TO BE SET OFF AS CONTEMPLATED U/S 115JAA WITHIN A PERIOD OF 10 AYS. SURCHARGE AT 5% SHALL BE LEVIED IF BOOK PROFIT EXCEEDS 1 CRORE. EDUCATION CESS @ 3% SHALL BE ADDED ON THE AGGREGATE OF INCOME TAX AND SURCHARGE. AT THE SAME TIME, SECTION 115JAA PROVIDES THAT WHERE ANY AMOUNT OF TAX IS PAID UNDER SECTION 115JB(L) BY A COMPANY FOR ANY ASSESSMENT YEAR, CREDIT IN RESPECT OF THE TAXES SO PAID FOR SUCH ASSESSMENT YEAR SHALL BE ALLOWED ON THE DIFFERENCE OF THE TAX PAID UNDER SECTION 115JB AND THE AMOUNT OF TAX 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 PAYABLE ON THE TOT AL INCOME UNDER NORMAL PROVISIONS OF THE ACT. 9.1 THE AMOUNT OF TAX CREDIT SO DETERMINED SHALL BE ALLOWED TO BE CARRIED FORWARD AND SET OFF IN A YEAR WHEN THE TAX BECOMES PAYABLE ON THE TOTAL INCOME COMPUTED UNDER THE REGULAR PROVISIONS. HOWEVER, NO CARRY FORWARD SHALL BE ALLOWED BEYOND THE TENTH ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE ASSESSMENT YEAR IN WHICH THE TAX CREDIT BECOMES ALLOWABLE. THE SET OFF IN RESPECT OF THE BROUGHT FORWARD TAX CREDIT SHALL BE ALLOWED FOR ANY ASSESSMENT YEAR TO THE EXTENT OF THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME AND THE TAX WHICH WOULD HAVE BEEN PAYABLE UNDER SECTION 115JB FOR THAT ASSESSMENT YEAR. ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 16 9.2 IN OTHER WORDS, MAT CREDIT WILL BE ALLOWED ONLY IN THAT PREVIOUS YEAR IN WHICH TAX PAYABLE ON THE TOTAL INC OME AS PER NORMAL PROVISIONS OF THE INCOME TAX ACT IS MORE THAN TAX PAYABLE UNDER SECTION 115JB AND IT SHALL BE ALLOWED TO THE EXTENT OF THE FOLLOWING: TAX PAYABLE ON TOTAL INCOME UNDER THE NORMAL PROVIS IONS OF THE ACT TAX PAYABLE UNDER SECTION 115JB = MAT CRE DIT TO BE ALLOWED. 9.3 ON CAREFUL READING, THE SUB-SECTION 2A, THE TAX CREDIT TO BE ALLOWED SHALL BE THE DIFFERENCE OF TAX PAID FOR ANY AY UNDER SUB-SECTION (1) OF 115JB AND THE AMOUNT OF TA X PAYABLE ON HIS TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE OTHER PROVISIONS OF THIS ACT. THE IMPORTANT WOR D USED IS TAX PAID AND AS PER THE HONBLE APEX COURT DECISION IN THE CASE OF K. SRINIVASAN (SUPRA), THE TERM TAX INCLU DES SURCHARGE. 9.4 IT IS ALSO IMPORTANT TO EVALUATE SUB-SECTION (5 ) OF SECTION 115JAA. SET OFF IN RESPECT OF BROUGHT FORWARD TAX CREDIT SHALL BE ALLOWED FOR ANY AY TO THE EXTENT OF DIFFER ENCE BETWEEN TAX ON HIS TOTAL INCOME AND THE TAX WHICH W OULD HAVE BEEN PAYABLE U/S 115JB, AS THE CASE MAY BE FOR THAT AY. ON CAREFUL READING, THE TERM USED ARE TAX NOT I NCOME TAX OR ANY OTHER TERM. NEEDLESS TO SAY THE TERM TAX INCLUDES SURCHARGE. THE SAID VIEW HAS BEEN REITERATED IN VARIOUS DECI SIONS OF THE ITAT AS CITED BY THE LD.COUNSEL FOR THE ASSE SSEE BEFORE US. AS FOR THE DECISION RENDERED IN THE CA SE OF THE ASSESSEE IN THE EARLIER YEAR BY THE ITAT, WE FI ND THAT THE SAID DECISION WAS RENDERED ON THE BASIS OF THE DECISION IN THE CASE OF M/S RICHA GLOBAL EXPORT PVT LTD.(SUPRA). THE SAID DECISION HAS BEEN DEALT WITH AND DISTINGUISHED IN THE CASE OF VIRTUSA (SUPRA) AS UND ER: LET US ALSO ANALYSE THE CASE LAW OF RICHA GLOBAL E XPORTS PVT. LTD. WHICH WAS APPLIED BY CIT(A), THE DELHI IT AT OPINED THAT SECTION 115JAA APPLIED ONLY TO INCOME T AX, NOT OF INCOME TAX AS INCREASED BY SURCHARGE AND EDUCATI ON CESS. WE ARE OF THE VIEW THAT THE APEX COURT DECISI ON IN THE CASE OF K. SRINIVASAN (SUPRA) MAY NOT HAVE BEEN BRO UGHT TO ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 17 THE KNOWLEDGE OF THE ITAT, DELHI. MOREOVER, THE EXP LANATION 2 OF SECTION 115JB IS APPLICABLE TO CALCULATE TAX L IABILITY U/S 115JB AND THE SAME EXPLANATION SHOULD ALSO BE APPLI ED FOR GIVING CREDIT U/S 115JAA. THE TAX LIABILITIES CALCU LATED 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 MAT CREDIT. IN OUR V IEW, WHILE CALCULATING THE MAT CREDIT U/S 115JAA, THE SA ME EXPLANATION 2 IN SECTION 115JB MUST BE APPLIED. THEREFORE, THE SAID DECISION WILL NOT APPLY TO THE CASE OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 14. SINCE THE FACTS AND ISSUE INVOLVED IN THE REMAINING TWO APPEALS IN ITA NOS.1524 & 1525/CHD/2017 ARE IDENTICAL TO THAT HAS BEEN DECIDE D BY US IN ITA NO. 1619/CHD/2017, THE DECISION RENDER ED THEREIN WILL APPLY MUTATIS-MUTANDIS TO THE SAID TW O APPEALS AND ALSO FOLLOWING WHICH, WE DISMISS THE APPEALS OF THE REVENUE. 15. IN EFFECT, ALL THE THREE APPEALS OF THE REVENUE ARE DISMISSED. 4. IN VIEW OF THIS, THIS APPEAL OF THE ASSESSEE IS ALLOWED HOLDING THAT THE MAT CREDIT ALLOWABLE TO THE ASSESSEE WILL INCL UDE SURPLUS AND CESS. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.3.2020. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 18.3.2020 .. '+ ,-.- / COPY OF THE ORDER FORWARDED TO : ITA NO. 887-CHD-2019 M/S STEEL STRIPS WHEELS LTD., CHANDIGARH 18 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , %2 , 34516 / DR, ITAT, CHANDIGARH 6. 157$ / GUARD FILE
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