9911796707
TMI Blog2018 (8) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act) concerning assessment year 2012-13. 2. The grounds of appeal raised by the Revenue reads as under:- "1. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance u/s 36(1)(iii) of the Act amounting to Rs. 46,85,028/-. 2. The Ld. CIT(A) has erred in law and on facts in restricting the disallowance of Rs. 23,148 made u/s 14A to Rs. 8801/-. 3. The Ld. CIT(A) has erred in law and on facts in allowing MAT Credit of Rs. 1,69,59,061/-." 3. When the matter was called for hearing, the learned DR for the Revenue relied upon the order of the AO and submitted that CIT(A) has wrongly granted the relief on all the three counts as per the grounds of appeal. 4. The learned AR, on the other hand, submitted that ground no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were out of interest free funds available at the disposal of the assessee. We find that the CIT(A) has correctly approached the issue in proper perspective. The assessee has own funds (interest free) which is nearly six times of the corresponding interest free advances. Thus, on facts presumption required to be drawn in favour of the assessee that interest free investment in sister concern is utilized out of own funds. In this view of the matter, no interference with the conclusion of the CIT(A) is called for. 6. In the result, Ground no.1 of the Revenue's appeal is dismissed. 7. Ground no.2 concerns disallowance of Rs. 8801/- under s.14A of the Act. The learned DR relied upon the order of the AO. The learned AR on behalf of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e MAT credit of Rs. 1,33,99,765/- as against the MAT credit claim of Rs. 1,69,59,061/- by the assessee during the year. The CIT(A) reversed the withdrawal of the credit on account of education cess and surcharge in first appeal. 10. Before us, the learned DR relied upon the order of the AO whereas the learned AR relied upon the order of the CIT(A) as well as the decision of the co-ordinate bench of Tribunal in the case of Bhagwati Oxygen Ltd. vs. ACIT (2017) 88 taxmann.com 28 (Kolkata-Trib.) for the proposition that the payment of entire tax (including surcharge and cess) is eligible for MAT credit under s.115JAA. We find merit in the plea of the assessee for inclusion of surcharge and cess for the purposes of claim of MAT credit in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to tax credit of Rs. 11/- (Rs.121/- minus Rs. 110/-) in subsequent years. The amount of tax credit of Rs. 11 has two components, viz., tax of Rs. 10 and surcharge etc. of Rs. 1. The parallel of the tax credit of Rs. 11 in the hypothetical situation is Rs.l.05 crore in the instant case, which as per the assessee has tax component of Rs. 95.83 lac and surcharge and cess etc. at Rs. 10.25 lac. The Id. AR could not place on record the veracity of such two figures and on a pointed query frankly agreed that the same can be examined by the AO. 5. We revert to the main question as to the stage at which deduction should be allowed for the tax credit. The Id. AR submitted that the tax component of Rs. 95.83 lac should have been allowed deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner, when we talk of allowing credit for tax available u/s 115JAA in subsequent years, which also includes the amount of surcharge etc., the same ought to be allowed in total from the amount of tax computed after loading it with the amount of surcharge or education cess. If we split the amount of tax credit into two artificial limbs, that is, tax and surcharge etc., there can be a possibility of an assessee even losing the benefit of the full amount of surcharge etc. as the amount of surcharge etc. keeps on varying from year to year. To illustrate, if the rate of surcharge etc. in the year of earning tax credit is say, 10%, but when the turn comes of claiming credit, there is no surcharge payable for that year or the rate is say, 5%, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD, the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest. 8. A careful circumspection of the above provision deciphers certain things. First is that the amount of advance tax and TDS etc. rank pari passu with the amount of MAT tax credit available ..... X X X X Extracts X X X X X X X X Extracts X X X X
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