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Facts
The assessee filed a revised return showing a loss, but the AO showed returned income as zero and later assessed a lower loss after reducing MAT credit. The AO also increased the book profit by the amount of MAT credit.
Held
The tribunal noted that the assessee failed to provide complete details to the lower authorities. However, considering the interest of justice, the matter was set aside and restored to the Assessing Officer for de novo adjudication and verification of MAT credit treatment.
Key Issues
Whether MAT credit is to be allowed as a deduction from total income and its impact on book profit calculation.
Sections Cited
147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI TR SENTHIL KUMAR
PER DR.BRR KUMAR, VICE-PRESIDENT:
This appeal is filed by the Assessee against the appellate order dated 07.03.2024 passed by the Commissioner of Income Tax (Appeals)/National faceless Appeal Centre, Delhi, relating to the Assessment year 2018-19.
The assessee has raised the following grounds of appeal:
a.) The learned A.O. has erred in showing returned income as Zero (First Page of Order), though assessee has filed revised Return of income showing loss at Rs. (- )1,62,09,031. In as much as, in computation of assessed income the A.O. has shown return loss at Rs. (-)1,62,09,031. b.) The learned A.O. has erred in reducing the return loss by MAT Credit of Rs. 1,29,09,468 (F.Y. 2016-17 Rs. 65,82,448 Plus F.Y. 2017-18 Rs. 63,27,020) on the ground that MAT Credit should not be allowable as deduction from total income under normal provision of the Act and assessing the loss at Rs. (-)32,99,563. In as much as, MAT Credit of earlier years was accounted in Books of Accounts by Crediting the same to Profit and Loss A/c. and Debiting to MAT Credit A/c. in Balance Sheet. MAT Credit corresponds to excess MAT that was paid and it cannot be considered as income. c.) The learned A.O. has erred in increasing the Book Profit to the extent of MAT Credit of earlier years Rs. 1,29,09,468(F.Y. 2016-17 Rs. 65,82,448 Plus F.Y. 2017-18 Rs. 63,27,020) on the ground that MAT Credit should not be allowable as deduction as, the MAT Credit of earlier years is result of excess MAT pa id and it is not income. To account for the MAT Credit available to assessee, Book entry was passed by crediting Profit and Loss A/c. and Debiting MAT Credit in Balance Sheet.
On perusal of the records, it is observed that the assessee was afforded sufficient opportunities to furnish details, clarifications, and explanations in support of the issues raised; however, the assessee failed to provide complete and satisfactory details before the lower authorities. The Ld. CIT(A), therefore, based on the material available on record, upheld the action of the Assessing Officer. Before us, the Ld. Counsel for the assessee submitted that, given an opportunity, the assessee would produce all necessary documents, books of accounts, and explanations to substantiate its claim and clarify the accounting treatment of MAT Credit. Considering the above facts and in the interest of substantial justice, we are of the view that the matter requires proper verification at the end of the Jurisdictional Assessing Officer. Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the matter to the file of the Jurisdictional Assessing Officer for de novo adjudication and necessary verification of the issues involved. The Assessing Officer shall verify all relevant details, including books of accounts, bank statements, computation statements, and supporting evidences furnished by the assessee, and decide the issue afresh in accordance with law. The assessee is also directed to extend full cooperation and furnish all requisite information without seeking any unnecessary adjournments.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 13.11.2025.