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2019 (9) TMI 726 - AT - Income TaxRevision u/s 263 - MAT credit under section 115JAA - entitled to claim carried forward MAT credit of the amalgamating company - assessee challenged the reduction of MAT credit in an appeal filed before the first appellate authority - HELD THAT:- Commissioner (Appeals) the assessee had raised a ground claiming MAT credit pertaining to the assessment year 2006–07. While deciding the said ground, he has clearly observed that in the original assessment order, the Assessing Officer has not made any discussion on the issue. Accordingly, he directed AO to allow credit as per law. It is further seen, as against the MAT credit of more than ₹ 58 crore claimed by the assessee before the Commissioner (Appeals), the AO allowed credit for ₹ 20,12,95,237. In these circumstances, it cannot be said that the order giving effect to is nothing but an implementation of direction of Commissioner (Appeals). Exercise of jurisdiction under section 263 of the Act does not suffer on account of either limitation or merger with learned Commissioner (Appeals)’s order. Undisputedly, learned CIT has exercised the power under section 263 of the Act on the issue of allowance of MAT credit relating to Ambuja Cement Eastern Ltd. which amalgamated with the assessee company. It is the reasoning of learned CIT that the provisions of section 115JAA of the Act allows set off of MAT credit only in respect of company in whose case such MAT credit has arisen. According to her, carry forward of MAT credit of amalgamating company cannot be allowed in case of amalgamated company. On a reading of the provisions of section 115JAA of the Act, we do not find any such restriction with regard to allowance of MAT credit of an amalgamating company at the hands of the amalgamated company. Rather, a plain reading of the aforesaid provision reveals that MAT credit is allowed to be carried forward for a specific period. In case of Skol Breweries Ltd. [2011 (3) TMI 578 - ITAT, MUMBAI] while deciding identical issue has held that carried forward MAT credit of the amalgamating company can be claimed by the amalgamated company. In view the assessment order passed in case of amalgamating company the principle which emerges is, the carried forward MAT credit of amalgamating company can be taken credit of by amalgamated company. Viewed in the aforesaid perspective, the decision of the Assessing Officer in allowing set off of carried forward MAT credit of ₹ 6,99,46,873, at the hands of the assessee cannot be considered to be erroneous. Therefore, one of the conditions of section 263 of the Act is not satisfied. That being the case, the exercise of power under section 263 of the Act to revise such an order is invalid.
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