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Income Tax Appellate Tribunal, ‘C’ BENCH, BENGALURU
Before: SHRI VIJAY PAL RAO & SHRI INTURI RAMA RAO
Date of hearing : 25/09/2017 Date of pronouncement : 28/09/2017 O R D E R
Per INTURI RAMA RAO, AM :
This is an appeal filed by the assessee directed against the order of the Commissioner of Income-tax (Appeals)-7 [‘CIT(A) for short’], Bangalore, dated 16/05/2016 for the assessment year 2012-13.
The assessee raised the following the grounds of appeal and additional ground:
3. Briefly facts of the case are that the assessee is a private limited company duly incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of development and export of software. Return of income for the assessment year 2012-13 was filed on 29/09/2012 declaring total income of Rs.2,48,72,280/-. Tax payable under normal provisions was more than tax payable u/s 115JB of the Income- tax Act, 1961 [hereinafter referred to as 'the Act' for short]. The assessee had carried forward MAT credit of Rs.34,70,424/- from earlier years. Therefore, the assessee claimed MAT credit utilization for the year of Rs.30,19,380/-. In the intimation issued under the provisions of section 143(1), MAT credit of Rs.27,91.847/- was allowed. The difference of MAT claimed and allowed by the Assessing Officer [AO] is as under:
Thus, there was short credit of Rs.2,27,533/-.
Being aggrieved, an appeal was preferred before the CIT(A) who, vide impugned order, after placing reliance on the decision of the Mumbai bench of Tribunal in the case of Classic Shares & Stock Broking Services Ltd., in confirmed the method of working out MAT credit utilization as done by the AO and dismissed the appeal.
Being aggrieved, the assessee is before us in the present appeal. Learned AR of the assessee vehemently contended that the amount of MAT credit utilization should be arrived at after including surcharge and education cess while computing difference between tax liability under normal provisions and tax liability under provisions of section 115JB of the Act. In this connection, he relied on the decision of the Hon’ble Apex Court in the case of CIT vs. K.Srinivasan (83 IR 346) and co-ordinate bench decision of Mumbai bench in the case of DCIT vs. Godrej Palm Oil Ltd. in dated 14/01/2015, decision of Hyderabad bench of Tribunal in the case of Page 4 of 5 M/s.Virtusa (India) Pvt. Ltd. vs. DCIT in dated 04/03/2016. On the other hand, learned CIT(DR) vehemently contested that in accordance with Form ITR 6, MAT credit utilization should be allowed before calculating surcharge and cess. In this regard, he placed reliance on the Form of return of income wherein MAT credit utilization was allowed before surcharge and cess.
We heard rival submissions and perused the material on record. In the present appeal, the only issue is whether MAT credit utilization should be difference between amount of tax liability inclusive of surcharge and cess or exclusive of surcharge and cess. There is no dispute as to the amount available on MAT credit. The dispute is only with regard to MAT credit utilization amount. In view of law laid down by the Hon’ble Apex Court in the case of K.Srinivasan (supra) that tax includes surcharge and cess, the right course would be to calculate difference between tax liability under normal provisions and sec.115JB inclusive of surcharge and cess. It may be noted that the Form prescribed under respective Rules cannot override the law of the land and substantive provisions of the Act. Therefore, in our considered opinion, MAT credit utilization should be the difference between tax liability inclusive of surcharge and cess under normal provisions and the tax liability u/s 115JB inclusive of surcharge. Therefore, the contentions raised by the assessee are acceptable.
Page 5 of 5 7. In the result, the appeal filed by the assessee is allowed.