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2016 (12) TMI 1398 - AT - Income TaxCompensation paid of to Microsoft Corporation, USA - allowable deduction in u/s 37(1) - Held that:- In the facts of the present case, use of pirated software by the assessee and its group companies which is the property of Microsoft Corporation and others admittedly, resulted in loss of business of Microsoft Corporation. Where because of civil suit between the parties, there was compromise entered into between the parties for payment of compensation for loss of business and also covering the cost of litigation, then such an amount is to be allowed as business expenditure in the hands of assessee under section 37(1) of the Act. The Explanation to section 37(1) of the Act does not apply to such understanding between the two private parties. The Kolkata Bench of Tribunal in ITO Vs. M/s. MPR Marketings Pvt. Ltd. (2013 (12) TMI 1061 - ITAT KOLKATA ) has laid down similar proposition, which has been approved by the Hon’ble High Court of Calcutta and we find support from the said ratio. Accordingly, we allow the claim in favour of assessee Computation of MAT credit - Held that:- The assessee is in appeal before us and the alternate plea raised by the assessee is that where the tax payable has been computed after including surcharge and education cess, then MAT credit should be allowed on the total amount i.e. tax with surcharge and education cess and should not be restricted only to the tax payable. This issue is decided by the Delhi Bench of Tribunal in the case of Richa Global Exports (P.) Ltd. (2012 (9) TMI 99 - ITAT DELHI ), wherein the Tribunal held that MAT credit payable under section 115JB is only income tax and does not include surcharge or education cess. Therefore, where it is only income tax that is paid under the provisions of section 115JB of the Act, it is natural that tax credit under section 115JAA of the Act will only be of income tax and not of surcharge and education cess. The said proposition was applied by the CIT(A) in denying the claim of assessee. The assessee has failed to controvert the same and in view thereof, we find no merit in the ground of appeal raised by the assessee.
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