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TMI Blog2015 (12) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... iming following substantial questions of law:- "I. Whether on the facts and circumstances of the case, the ITAT was right in law in allowing the set off of tax credit under section 115J (correct provision is Section 115JAA) for the purpose of calculation of interest under section 234B of the IT Act ignoring the fact that there is no provision in law warranting such set off? II. Whether on the facts and circumstances of the case, the ITAT was right in law in directing that depreciation should be worked out with reference to the WDV computed as a result of order passed under section 250(6) of the IT Act for the assessment year 1998-99?" 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the parties that question No.II is covered by our decision dated 8.9.2015 in ITA No.426 of 2010 (CIT, Jalandhar I, Jalandhar vs. M/s Max India Limited) against the revenue. Accordingly, question No.II is answered against the revenue. 5. With regard to Question No.I, learned counsel for the revenue relied upon judgment of the Apex court in Joint CIT vs. M/s Rolta India Limited, (2011) 330 ITR 470 to urge that the set off of tax credit under Section 115JAA of the Act was not admissible for the purpose of calculation of interest under section 234B of the Act. 6. On the other hand, learned counsel for the assessee submitted that the issue stands concluded against the revenue by the decision of the Apex Court in CIT vs.Tulsyan Nec Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Act [see Section 115JAA(2)] in year one. Such credit is, however, allowable for a period of five succeeding assessment years, immediately succeeding the assessment year in which the credit becomes available (say years 2 to 6) [See Section 115JAA(3)]. However, MAT credit is available for set off against the tax payable in succeeding years where the tax payable on income computed under the normal provisions of the Act exceeds the tax payable on book profits computed for that year [See Section 115JAA(4), (5)]. At this stage, we would like to emphasize the word "allowed" in all the sub-sections of Section 115JAA. The statute envisages under Section 115JAA "credit in respect of tax so paid" because the entire tax is not an automati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on book profits in each of those years, as per assessee's own computation. Although the right to avail tax credit gets crystallized in year one, on payment of tax under Section 115JA and the set off thereof follows statutorily, the amount of credit available and the amount of set off to be actually allowed as in all cases of deductions/ allowances under Sections 30-37, is fluid/ inchoate and subject to final determination only on adjudication of assessment either under Section 143(1) or under Section 143(3). The fact that the amount of tax credit to be allowed or to be set off is not frozen and is ambulatory, does not take away/ destroy the right of the assessee to the amount of tax credit." 9. Further, it was concluded by the Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the provisions of Chapter XVII-C. Although Section 209(1)(d) does not make any specific provision either before or after the amendments carried out by the Finance Act, 2006 to the effect that an assessee is entitled to set off the tax credit that would be available in terms of Section 115JAA(1) while computing the quantum of advance tax that is to be paid it must follow that an assessee would be entitled to do so otherwise it results in absurdity, viz, that an assessee pays advance tax on the footing that it is not entitled (when in fact it is so entitled as discussed above) to the credit and thereafter claims a refund of such advance tax paid as a consequence of the set off. Moreover, when an A.O. makes an intimation under Section 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim is : As per AO (Rs.) As per appellant (Rs.) Tax as per order under section 143 (3) dated 12.3.2003 59,554,190 59,554,190 Less : Set off of tax credit under section 115JAA 12,622,912 As per AO (Rs.) As per appellant (Rs.) Net Tax payable 59,554,190 46,931,279 Less: Taxes paid (TDS and advance Tax) 46,032,203 46,544,770 Difference 13,521,987 386,509 Interest under section 234B for three months at the rate of 1.5% per month 608,489 17,392 The tax paid as per order under section 154 dated 12.2.2004 passed by the AO comes to Rs. 46,437,542. After considering the matter, I am inclined to agree with the contentions of the appellant. The AO has clearly erred in computin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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