M/S. KADIMI TOOLS MANUFACTURING CO. PVT. LTD.,GURGAON vs. DCIT, NEW DELHI

The present appeal is filed by the assessee against the order dated 29.7.2016 passed by the learned Assessing Officer (“Ld. AO”) pursuance to the directions of the Dispute Resolution Panel -2 (DRP), New Delhi.

Brief facts of the case are that the assessee company is engaged in the business of manufacturing and selling of thread rolling dies under joint venture with Precision Cast Parts Corporation, USA. For the year under consideration, the assessee filed its return of income on 22.11.2016 declaring total income of Rs.12,16,37,580/- under normal provisions of the Income-tax Act, 1961(“the Act”) and Rs.12,18,13,376/- under MAT. Assessee paid the tax under normal provisions of the Act, but claimed tax credit for the taxes paid under MAT for earlier years.

In view of the international transaction of the assessee with the Associated Enterprises (AE), determination of ALP was referred to the learned TPO, who enhanced the income of the assessee by Rs.1,76,173/- and accordingly draft assessment order dated 26.2.2016 was passed.

Aggrieved by the draft assessment, assessee filed objections before the ld. DRP and the ld. DRP by direction dated 6.6.2016 deleted the TP adjustment of Rs.1,76,173/-. Final assessment order was passed accepting the return of income by the assessee.However, ld. AO while computing alleged demand of Rs.7,58,760/- in ITNS, did not give correct MAT credit to the extent of of Rs.1,50,93,197/-.

Assessee, therefore, preferred this appeal challenging the computation of demand at Rs.7,58,760/- as per notice of demand issued u/s 156 of the Act.

We have heard the counsel on both sides. It is clear from the submissions that the only issue involved in this appeal is MAT credit claimed by the assessee at Rs. 1,50,93,197/-, being the difference between the gross tax liability including surcharge and cess as per the normal provisions and tax under MAT provisions. The assessee claimed the MAT as per the formula embedded in the statutory income tax return form whereas MAT allowed to the assessee as per order u/s 143(3) read with section 144C was Rs.1,39,55,799/-, which is the difference between the base tax as per normal and MAT provisions due to which the tax demand including interest has been determined at Rs.7,58,760/-

It is submitted by the learned AR that the assessee filed the application u/s 154 of the Act on 10.8.2016 and 31.8.2016 and the same was pending.

Learned DR, however, submitted that the said application of the assessee filed u/s 154 of the Act was allowed by the Ld. AO, which resulted in refund of some amount to the assessee, which was proposed to be adjusted towards the tax for the next year. Assessee is not disputing the submissions made by the learned DR across the bar, and submits that in that event, no dispute survives for adjudication in this appeal and the appeal has become infructuous.Recording the same, we find that the the appeal has become infructuous and the same is liable to be dismissed.