DCIT, Cir-1(1), Kolkata, Kolkata V. M/s. Kilburn Engineering Ltd., Kolkata

ITA 898/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7016 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 28-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T VARKEY J M
• Section: 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI ABY T VARKEY, JM & SHRI M.BALAGANESH, AM ITA NO.898/KOL/2017 ( ASSESSMENT YEAR :2011-12 ) DCIT, CIRCLE-1(1), KOLKATA P-7, CHOWRINGHEE SQUARE R.NO.20, 7 TH FLOOR, KOLKATA 700 069 VS. M/S. KILBURN ENGINEERING LTD., 4, MANGOE LANE, SURENDRA MOHAN GHOSH SARANI KOLKATA 700 001 PAN/GIR NO.AABCK3421H (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI SHANKAR HALDER ASSESSEE BY SHRI ANSUL AGRAWAL DATE OF HEARING 04/04/2019 DATE OF PRONOUNCEMENT 26/04/2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO.898/KOL/2017 FOR A.Y.2011-12 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS)-17, KOLKATA IN APPEAL NO.238/CIT(A)-17/KOL/15-16 DATED 28/10/2016 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.1 43(3)OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATE D 25/03/2014 BY THE LD. DY. COMMISSIONER OF INCOME TAX, CIRCLE -6, KOLKATA (HEREINAFTER REFERRED TO AS LD. AO). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE SET OFF OF MAT CREDIT OF ITA NO.898/KOL/2017 M/S. KILLBURN ENGINEERING LTD., 2 RS.11,65,63,798/- U/S.115JAA OF THE ACT BROUGHT FOR WARD FROM EARLIER YEARS AGAINST TAX ON TOTAL INCOME INCLUDING SURCHAR GE AND EDUCATIONAL CESS IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT TH E LD. CIT(A) HAD GRANTED RELIEF TO THE ASSESSEE BY OBSERVING AS UNDE R:- GROUND NO. 4; ADDITION OF SURCHARGE AND EDUCATION CESS TO TAX LIABILITY UNDER NORMAL PROVISIONS BEFORE ALLOWING MINIMUM ALTERNATE TAX CREDIT OF RS. 16563798/- U/S. 115JAA OF THE ACT : THE ASSESSEE IN HIS SUBMISSIONS HAS STATED AS UNDER : AS PER PROVISIONS OF INCOME TAX ACT AND INCOME TAX RETURN SURCHARGE AND CESS TO BE CALCULATED ONLY AFTER MAT CREDIT. MA T CREDIT ALLOWED TO THE ASSESSEE ONLY TAX PART AND NOT SURCHARGE AND CE SS. ' THE INCOME TAX RETURN AS PROVIDED BY INCOME TAX D EPARTMENT ITSELF CALCULATES TAX LIABILITY APPLY SURCHARGE AND CESS O N DIFFERENCE BETWEEN INCOME TAX UNDER NORMAL PROVISIONS AND 115JB (REFER PART B-TTI OF IT R-6 FILED FOR F YEAR 2011-12). THUS THE APPELLANT SUBMITS THAT THE AO HAS ERRED IN COMPUTING TAX LIABILITY AS PER PROVISI ONS OF THE ACT.. DECISION: THE ISSUE IS COVERED BY THE DECISION OF T HE HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF COMMISSIONER OF I NCOME-TAX V. VACMENT INDIA 12015] 55 TAXMANU.COM 314 WHEREIN IT HAS BEEN HELD AS UNDER: '3. IN THE PRESENT CASE, THE ASSESSEE FILED AN APPE AL BEFORE THE COMMISSIONER (APPEALS) AGAINST AN ORDER THAT WAS PA SSED UNDER SECTION 143 (I) READ WITH SECTION 154 OF THE ACT BY THE ACIT-CENTRALIZED & PROCESSING CENTRE (CPC), BANGALORE, BY WHICH A DE MAND OF RS. 10,92,766.00 WAS RAISED ON THE ASSESSEE. THE FOLLOW ING GROUNDS OF APPEAL WERE RAISED BEFORE THE COMMISSIONER (APPEALS ): ' I. BECAUSE THE RECTIFICATION APPLICATION FILED UN DER SECTION 154 OF THE I.T ACT BEFORE CPC,BANGALORE HAS BEEN WRONGLY AND I LLEGALLY REJECTED. 2.BECAUSE SURCHARGE AND EDUCATION CESS ON THE TAX P AYABLE HAS BEEN CALCULATED BEFORE ALLOWING CREDIT OF TAX PAID IN TH E EARLIER YEARS UNDER SECTION 115JAA WHICH IS APPARENTLY WRONG AND HENCE, ACIT (CPC) HAS ERRED ON FACTS AND AS WELL AS ON LAW IN REJECTING T HE APPLICATION FILED UNDER SECTION 154 OF THE IT. ACT. ITA NO.898/KOL/2017 M/S. KILLBURN ENGINEERING LTD., 3 3. BECAUSE WITHOUT PREJUDICE TO THE ABOVEMENTIONED GROUNDS, IF THE CREDIT OF TAX PAID UNDER SECTION 115JAA IS TO BE AL LOWED AFTER CHARGING SURCHARGE AND EDUCATION CESS, THEN THE CREDIT WHICH HAS BEEN ALLOWED' OF THE TAXES PAID IN THE EARLIER YEAR SHOULD ALSO B E INCLUSIVE OF SURCHARGE AND EDUCATION CESS.' 4. THE COMMISSIONER (APPEALS) ALLOWED THE APPEAL FI LED BY THE ASSESSEE BY AN ORDER DATED 18 OCTOBER 2013 AND DIRECTED THE ASSESSING OFFICER TO COMPUTE THE GROSS TAX LIABILITY ON THE ASSESSEE IN ACCORDANCE WITH THE METHOD OF COMPUTATION PROVIDED IN ITR-6 FOR THE ASS ESSMENT YEAR 2011- 12. THE TRIBUNAL HAS DISMISSED THE APPEAL FILED BY THE REVENUE BY ITS ORDER DATED 22 MAY 2014. 5. THE ONLY QUESTION WHICH IS RAISED PERTAINS TO TH E COMPUTATION OF TAX IN ACCORDANCE WITH THE MODALITIES WHICH ARE PRESCRI BED IN THE RELEVANT FORM, ITR-6. INSOFAR AS IS MATERIAL, THE RELEVANT E NTRIES M OK FORM (PART B-TTI) ARE AS FOLLOWS: 3 GROSS TAX PAYABLE (ENTER HIGHER OF 2C AND I) 3 4 CREDIT UNDER SECTION 115JAA OF TAX PAID IN EARLIER YEARS (IF 2C IS MORE THAN (1)(7 OF SCHEDULE MATC) 4 5 TAX PAYABLE AFTER CREDIT UNDER SECTION 1 15JAA [(3-4)] 5 6 SURCHARGE ON 5 6 7 EDUCATION CESS, INCLUDING SECONDARY AND HIGHER EDUCATION CESS ON (5+6) 7 8 GROSS TAX LIABILITY (5+6+7) 8 6. THE AFORESAID ENTRIES LEAVE NO MANNER OF AMBIGUI TY 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 115JAA OF THE ACT OF THE TAX PAID IN EARLIER YEARS. ENTRY 5 R EQUIRES A COMPUTATION OF THE TAX PAYABLE AFTER CREDIT UNDER SECTION 11SJA A OF THE ACT, THE MATTER IS PLACED BEYOND DOUBT BY THE PARENTHESIS, W HICH INDICATES THAT TAX PAYABLE UNDER ENTRY 5 IS TO BE ARRIVED AT BY DE DUCTING THE CREDIT UNDER SECTION I15JAA OF THE ACT (UNDER ENTRY 3) FRO M THE GROSS TAX PAYABLE ENTRY 4). THE SURCHARGE IS COMPUTED ON THE AMOUNT REFLECTED IN ENTRY 5.' RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HO N'BLE HIGH COURT OF ALLAHABAD, I HEREBY DIRECT THE AO TO MAKE THE TAX C ALCULATION IN THE ITA NO.898/KOL/2017 M/S. KILLBURN ENGINEERING LTD., 4 MANNER ABOVE AS DIRECTED BY THE HON'BLE COURT. THIS GROUND OF APPEAL OF THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL P URPOSES. 4. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT T HE LD. CIT(A) HAD GRANTED RELIEF TO THE ASSESSEE BY PLACING RELIANCE ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT SUPRA WHICH HAS BEEN R EPRODUCED HEREINABOVE. THE MAIN QUESTION RAISED BEFORE THE HO NBLE HIGH COURT BY THE REVENUE WAS AS UNDER:- 'WHETHER THE HONBLE ITAT HAS ERRED IN LAW AS WELL AS IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN ALLOWING THE CALCULATI ON OF TAX IN VIOLATION OF THE PROVISIONS OF THE RELEVANT FINANCE ACT WHICH PRESCR IBE CALCULATION OF TAX AS INCLUSIVE OF CESS AND SURCHARGE.' 5.1. THIS QUESTION HAS BEEN DULY ANSWERED BY THE HO NBLE HIGH COURT ABOVE WHICH HAD BEEN DULY FOLLOWED BY THE LD. CIT(A ) AND ACCORDINGLY, THE LD. AO WAS DIRECTED TO RECOMPUTE THE TAX CREDIT U/S.115JAA OF THE ACT BY THE LD. CIT(A). WE FIND NO INFIRMITY IN THE SAID ACTION OF THE LD. CIT(A). ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DI SMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26/04 /2019 SD/ - ( ABY T VARKEY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 26/04/2019 KARUNA SR.PS ITA NO.898/KOL/2017 M/S. KILLBURN ENGINEERING LTD., 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, KOLKATA 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//