M/s Super Smelters Ltd., Kolkata V. JCIT (OSD), CC-V, KOLKATA, Kolkata

ITSSA 87/KOL/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2833 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2014
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 115JB; 132

Judgement Text

I.T.(S.S.)A . NO. 87/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER I.T.(S.S.)A. NO. 87/KOL/ 2014 ASSESSMENT YEAR: 2007-2008 M/S. SUPER SMELTERS LIMITED,....................... .......................APPELLANT 39, SHAKESPEARE SARANI, 3 RD FLOOR, KOLKATA-700 017 [PAN: AAFCS 1116 F] -VS.- JOINT COMMISSIONER OF INCOME TAX (OSD),............ ...........RESPONDENT CENTRAL CIRCLE-V, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, E.M. BYE PASS, KOLKATA-700 107 APPEARANCES BY: SHRI A.K. TULSIYAN, A.R., FOR THE ASSESSEE SHRI NIRAJ KUMAR, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 28, 2016 DATE OF PRONOUNCING THE ORDER : DECEMBER 02, 2016 O R D E R PER SHRI P.M. JAGTAP, A.M .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I, KO LKATA DATED 20.03.2014 AND ITS GRIEVANCE AS IS PROJECTED IN THE SOLITARY GROUND RAISED THEREIN READS AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) HAS GROSSLY ERRED IN ALLOWING CRED IT OF MAT U/S 115JB OF THE INCOME TAX ACT, 1961 OF RS.1,58,049/- ONLY AS AGAINST THE CLAIM OF A SUM OF RS.11,34,890/- RESULTING IN NOT ALLOWING THE CREDIT OF SURCHARGE AND EDUCATION CESS OF RS.8,00,689/- AND RS.1,76,152/- RESPECTIVELY. THE CREDIT OF THE SAME NEED TO BE ALLOWED. I.T.(S.S.)A . NO. 87/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 5 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF PRODUCTION OF IRON & STEEL AND ALLI ED PRODUCTS. A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 06.03.2010, WHICH WAS CONCLUDED ON 03.05.2010. IN THE ASSESSMENT COMPLETED FOR THE YEAR UNDER CONSIDERATI ON IN PURSUANCE OF THE SAID ACTION UNDER SECTION 153A/143(3) OF THE AC T VIDE AN ORDER DATED 30.12.2011, THE TOTAL INCOME OF THE ASSESSEE AS PER THE REGULAR PROVISIONS OF THE ACT WAS DETERMINED BY THE ASSESSING OFFICER AT RS.78,48,844/-. SINCE THE TAX PAYABLE ON BOOK PROFIT CALCULATED AS PER THE PROVISIONS OF SECTION 115JB WAS MORE THAN THE TAX PAYABLE BY THE ASSESSEE ON THE INCOME AS COMPUTED AS PER THE REGULAR PROVISIONS OF THE ACT, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER A SSESSING THE INCOME OF THE ASSESSEE ON THE BASIS OF BOOK PROFIT. IN THE ASSESSMENT SO COMPLETED, MAT CREDIT OF ONLY RS.1,58,049/- WAS ALL OWED TO BE CARRIED FORWARD BY THE ASSESSING OFFICER, WHICH REPRESENTED TAX ONLY AND NOT THE SURCHARGE AND EDUCATION CESS PAID BY THE ASSESSEE. THE ASSESSEE, THEREFORE, FILED AN APPEAL BEFORE THE LD. CIT(APPEA LS) CLAIMING CARRY FORWARD OF MAT CREDIT ON ACCOUNT OF SURCHARGE OF RS .8,00,689/- AND EDUCATION CESS OF RS.1,76,152/-. 3. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE AS SESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEA LS) DID NOT FIND MERIT IN THE CLAIM OF THE ASSESSEE FOR THE FOLLOWING REAS ONS GIVEN IN PARAGRAPH NO. 3 OF HIS IMPUGNED ORDER:- 3. IN GROUND NO 1, THE ASSESSEE HAS CONTENDED THAT THE AO HAS ERRED IN NOT ALLOWING THE CARRY FORWARD OF MAT CREDIT ALONG WITH SURCHARGE AND EDUCATION CESS. IN THE IMP UGNED ASSESSMENT ORDER, THE AO DETERMINED THE REGULAR INC OME TAX PAYABLE AT RS. 78,48,844/-. THE TAX ON THE BOOK PRO FIT WAS HOWEVER DETERMINED AT RS.80,06,893/-. THE AO THUS A LLOWED CARRY FORWARD OF MAT CREDIT AT RS.1,58,049/-. THE CONTENTION OF THE ASSESSEE IS THAT THE CARRY FORWAR D OF MAT CREDIT SHOULD ALSO INCLUDE THE SURCHARGE AND EDUCAT ION CESS. THE RELIANCE WAS PLACED ON EXPLANATION 2 TO SECTION 115JB. I DO NOT FIND MERIT IN THE SUBMISSION OF THE ASSESSEE . THE EXPLANATION 2 IS CONFINED TO CLAUSE (A) OF EXPLANAT ION 1 WHICH CANNOT BE EXTENDED TO THE OTHER PROVISIONS OF THE ACT. I.T.(S.S.)A . NO. 87/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 5 SECTION 115JAA(2A) CLEARLY STATES THAT THE TAX CRED IT TO BE ALLOWED UNDER SUB-SECTION (1A) SHALL BE THE DIFFERE NCE OF THE TAX PAID U/S. 115JB(1) AND THE AMOUNT OF TAX PAYABL E ON THE TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE OTHER PROVISIONS OF THE ACT. I AM THEREFORE NOT IMPRESSED WITH THE ARGUMENT THAT SURCHARGE AND EDUCATION CESS SHOULD H AVE BEEN INCLUDED WHILE ALLOWING THE MAT CREDIT. I AM O F THE OPINION THAT THE AO HAS CORRECTLY ALLOWED THE CARRY FORWARD OF MAT CREDIT AT RS.L,58,049/-. GROUND NO. 1 IS DIS MISSED. IN GROUND NO 2, THE ASSESSEE HAS CONTENDED THAT THE AO WAS NOT JUSTIFIED IN ALLOWING TDS CREDIT OF RS.16,72,271/- AGAINST THE CLAIM OF RS.55,03,110/-. I FIND THAT THE ISSUE HAS NOT BEEN DISCUSSED IN THE ASSESSMENT ORDER. THE AO IS D IRECTED TO VERIFY THE CONTENTIONS OF THE ASSESSEE AND ALLOW TDS CREDIT IN .ACCORDANCE WITH THE PROVISIONS OF LAW. G ROUND NO. 2 IS DECIDED ACCORDINGLY. GROUND NO 3 RELATES TO TH E CHARGING OF INTEREST U/S. 234C WHICH IS CONSEQUENTI AL. GROUND NO. 4 IS GENERAL IN NATURE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN SUPPORT O F THE ASSESSEES CLAIM FOR MAT CREDIT ON ACCOUNT OF SURCHARGE AND EDUCATIO N CESS, THE LD. COUNSEL FOR THE ASSESSEE HAS CITED VARIOUS JUDICIAL PRONOUNCEMENTS. IN ONE OF THE CASES SO CITED, NAMELY WYETH LIMITED VS .- ACIT (ITA NO. 7682/MUM./2011 DATED 09.01.2015), A SIMILAR ISSUE H AD COME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF THIS T RIBUNAL AT MUMBAI AND THE SAME WAS DECIDED BY THE TRIBUNAL VIDE PARAG RAPH NO. 5 OF ITS ORDER WHICH READS AS UNDER:- '5. THUS IT IS CLEAR THAT THE HON'BLE HIGH COURT HA S TAKEN INTO ACCOUNT THE ORDER OF ENTRIES IN THE FORM ITR-6 FOR THE A.Y. 2011-12 IN THE SAID CASE AND HELD THAT AS PER FORM ITR-6, THE MAT CREDIT HAS TO BE GIVEN AGAINST THE GROSS TAX PAYABLE EXCLUSIVE OF SURCHARGE / CESS AND ONLY AFTER THE MAT CREDIT TAX LIABILITY, THE SURCHARGE A ND 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 IS TAKEN INTO ACCOUNT WITHOUT INCLUDING THE SURCHARGE AND EDUCATION CESS THEN THE SURCHARGE AND EDUCATION CESS ON THE TAX LIABILITY HAS TO BE CALCU LATED I.T.(S.S.)A . NO. 87/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 5 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 AN D EDUCATION CESS . 5. THE DELHI BENCH OF THIS TRIBUNAL ALSO HAD AN OCC ASION TO CONSIDER A SIMILAR ISSUE IN THE CASE OF AMQ AGRO INDIA PVT. LI MITED VS.- ACIT AND WHILE DECIDING THE SAME IN FAVOUR OF THE ASSESSEE V IDE ITS ORDER DATED 29.04.2016 PASSED IN ITA NO. 666/DEL./2014, IT WAS HELD BY THE TRIBUNAL THAT AS PER THE PROVISIONS CONTAINED IN EXPLANATION (2) UNDER SECTION 115JB, THE ASSESSEE IS ENTITLED TO MAT CREDIT ON AC COUNT OF SURCHARGE AS WELL AS EDUCATION CESS, WHICH WAS UNDISPUTEDLY PAID BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.- K. SRINIVASA N [83 ITR 346 (SC), WHEREIN IT WAS HELD BY THE HONBLE APEX COURT THAT THE TERM INCOME-TAX AS EMPLOYED IN SECTION 2 INCLUDES SURCHARGE AND ADD ITIONAL SURCHARGE WHENEVER PROVIDED. THE LD. D.R., ON THE OTHER HAND, HAS NOT BROUGHT TO OUR NOTICE ANY JUDICIAL PRONOUNCEMENT WHEREIN A DIF FERENT VIEW ON THIS ISSUE HAS BEEN EXPRESSED. WE, THEREFORE, RESPECTFUL LY FOLLOW THE JUDICIAL PRONOUNCEMENTS CITED BY THE LD. COUNSEL FOR THE ASS ESSEE AS DISCUSSED ABOVE AND DIRECT THE ASSESSING OFFICER TO ALLOW THE MAT CREDIT ON ACCOUNT OF SURCHARGE AND EDUCATION CESS PAID BY THE ASSESSE E. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 02, 2016. SD/- SD/- (N.V. VASUDEVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 2 ND DAY OF DECEMBER, 2016 COPIES TO : (1) M/S. SUPER SMELTERS LIMITED, 39, SHAKESPEARE SARANI, 3 RD FLOOR, KOLKATA-700 017 (2) JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE-V, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, E.M. BYE PASS, KOLKATA-700 107 I.T.(S.S.)A . NO. 87/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 5 OF 5 (3) COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I , KOLKATA (4) COMMISSIONER OF INCOME TAX- , KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.