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ACIT, Central Circle-38, Mumbai Versus M/s. Uniphos Enterprises Ltd. (Formerly United Phosphorous Ltd.)

2016 (4) TMI 1126 - ITAT MUMBAI

Interest under section 244A of the Act on MAT credits - Held that:- Respectfully following the aforesaid decision of the Hon'ble Bombay High Court in the case of APAR Industries Ltd. (2010 (4) TMI 151 - BOMBAY HIGH COURT ), we hold and direct that assessee is entitled to be allowed interest under section 244A of the Act on refundable taxes after giving credit of brought forward MAT credit.

Credit for brought forward for allowance of MAT - Held that:- Credit for brought forward MAT is .....

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The facts of the case, briefly, are as under: - 2.1 The assessee filed its return of income for A.Y. 2001-02 on 30.10.2001 declaring total income of ₹ 11,38,79,120/- under normal provisions and Book Profit of ₹ 11,95,97,648/- under section 115JB of the Income Tax Act, 1961 (in short 'the Act'). Subsequently, a revised return was filed wherein income of ₹ 7,83,83,421/- was declared under normal provisions of the Act. The case was taken for scrutiny and the assessment wa .....

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sued to the assessee. The re-assessment was completed under section 143(3) r.w.s. 147 of the Act vide order dated 31.12.2007, wherein the total income of the assessee under normal provisions was determined at ₹ 7,29,60,700/- thereby granting the assessee refund of ₹ 8,75,000/-. Subsequently, the Assessing Officer (AO) issued notice under section 154 of the Act, on the grounds that excess MAT credit was given resulting in under charging of interest under section 234B and 234D of the A .....

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hether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing interest u/s. 244A on MAT credit i.e. taxes paid u/s. 115JA without considering that proviso to sub section 2 of section 115JA specifically provides that no interest shall be payable on tax credit allowed u/s. 115JA(1). 2. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in following the decision of the CIT vs. Jindal Exports Ltd. (314 ITR 137 (D .....

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nder section 115JA of the Act without considering the proviso to subsection 2 to section 115JAA which provides that no interest shall be payable on tax credit allowed under section 115JA(1) of the Act. The learned D.R. was heard in support of the grounds raised and he placed strong reliance on the order of the AO in this regard. 4.2 Per contra, the learned A.R. for the assessee supported the findings of the learned CIT(A) on this issue. It is submitted that the learned CIT(A) had rightly followe .....

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ng the judicial pronouncement cited. The learned CIT(A) at paras 7 and 8 of her order, following the decisions of the Hon'ble Bombay High Court in the case of APAR Industries Ltd. (supra) has held as under: - 7. As regards to the grounds raised with regard to the interest under s. 244A as per the proviso to section 115JAA no interest shall be payable on the tax credit allowed under sub-section 1(A). However, it has been stated by the Hon'ble High Court in the case of APAR Industries Ltd. .....

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ce is placed on the decision of the order of the ITAT Delhi Bench in the case of DCIT vs. Bharat Aluminum Ltd. pronounced on 19.02.2010, copy of which order is placed on record. 8. On the basis of the above discussion, it is held that the MAT credit be allowed before giving effect to TDS and advance tax paid and interest under s. 244A is subject to the findings as contained in paragraph 6 above. 4.3.2 We have carefully perused the decision of the Hon'ble Bombay High Court in the case of APAR .....

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led to be allowed interest under section 244A of the Act on refundable taxes after giving credit of brought forward MAT credit. Consequently, ground No. 1 of the Revenue s appeal is dismissed. 5. Ground No. 2 5.1 In this ground, Revenue contends that the learned CIT(A) erred in following the decisions of the Hon'ble Delhi High Court in the case of Jindal Exports Ltd. (314 ITR 137( (Del) that credit under section 115JA of the Act to be allowed on brought forward MAT credit from gross demand b .....

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mand before charging interest under section 234A and 234B of the Act. It was also submitted that the decisions of the Hon'ble Delhi High Court in the case of Jindal Exports Ltd. (2009) 314 ITR 137 (Del), referred to and contested in Revenue s ground No. 2, has been affirmed by the Hon'ble Apex Court in the case of CIT vs. Tulsyan NEC Ltd. (2011) 330 ITR 226 (SC). 5.3.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial .....

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s. 15JAA(1). The credit available is thus in respect of tax paid. As per the provisions of section 234B the liability to pay interest arises when there is failure to pay such tax or where the advance tax paid is less than 80% of the assessed tax. Explanation (1) to section 234B inserted with effect from 1st April, 2007 defined the term "assessed tax" to also account for tax credit allowed to be set off in accordance with the provisions of section 115JAA. The nature corollary arises is .....

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to section 234B is clarificatory in nature and consequently even prior to the amendment the credit to which the assessee was entitled under s. 115JAA could not ignored in determining the liability to pay interest under s. 234B. It has been held by the Hon'ble High Court that an amendment which is intended to remove an ambiguity in the interpretation of a section must of necessity be regarded as clarificatory. If it is clarificatory in nature, it is expressive of a position in law which Parl .....

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