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2016 (11) TMI 1663 - AT - Income TaxComputation of tax u/s 115JB - MAT credit utilization - MAT credit excluding Surcharge and Education Cess and not allowing the MAT credit utilization as claimed under section 115JAA - short allowance of credit on account of MAT credit i.e. restriction in the quantum of refund to be issued to the assessee - HELD THAT:- Issue of allowance of tax credit for tax paid on deemed income i.e. computation of eligible MAT credit arose before the Hyderabad Bench of Tribunal in Virtusa (India) (P) Ltd. Vs. DCIT [2016 (3) TMI 245 - ITAT HYDERABAD] held that the tax liabilities for normal provisions as well as MAT to be calculated with Surcharge and Education Cess and the assessee was entitled to total MAT credit adjustments i.e. against taxes and Surcharge and Cess. In this regard, reference was made to sub-section (5) to section 115JAA of the Act i.e. for setting o ff in respect of brought forward tax credit and it was held that the term used ‘tax’ included surcharge and AO cannot overlook these formats and (interpret it in his own method of calculating tax credit while making assessment u/s 143(1) of the Act.) proceed to calculate the MAT credit to compute assessment u/s 143(1) applying different methods when the proper and correct method as proposed by CBDT in ITR-6. The Assessing Officer is expected to follow the ITR-6 format to complete the assessment u/s 143(1) or 143(3) of the Act. Thus we hold that the assessee is entitled to MAT credit utilization of ₹ 1.48 crores i.e. MAT credit including surcharge and education cess. Accordingly, we direct the Assessing Officer to re-compute the refund in the hands of assessee. The grounds of appeal raised by the assessee are thus, allowed.
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