TMI Blog2017 (11) TMI 1898X X X X Extracts X X X X X X X X Extracts X X X X ..... S. Rifaur Rahman, AM: This appeal is filed by the Revenue against the order of CIT(A) - 5, Hyderabad dated 30/01/2016 relates to the AY 2012-13 wherein the revenue has raised the following grounds of appeal: 1. The ld. CIT(A) erred in holding that the surcharge and education cess is to be calculated after deducting the MAT credit u/s 115JAA from the tax on assessed income. 2. Ld. CIT(A) erred in ignoring the law that for the purpose of tax credit u/s 115JAA of the IT Act, tax does not include surcharge and education cess. 2. Assessee is a company, engaged in the business of Manufacturing of active Pharma Ingredients Intermediates, filed its original return of income for the AY 2011-12 on 24/11/2011 declaring an income of ₹ 129,04,21,440/-, which was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and a notice u/s 143(2) was issued dt. 07/09/2012. After due procedure, the AO passed the order u/s 143(3) r.w.s. 92CA(4) of the Act assessed the income of the assessee at ₹ 1,29,66,84,479/- as against the returned income at ₹ 1,29,04,21,440/-. 3. The issue before us is, while computing the total assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Education cess @ 3% shall be added on the aggregate of income tax and surcharge. At the same time, section 115JAA provides that where any amount of tax is paid under section 115JB(l) by a company for any assessment year, credit in respect of the taxes so paid for such assessment year shall be allowed on the difference of the tax paid under section 115JB and the amount of tax payable by the company on its total income computed in accordance with the other provisions of the Act. In other words, MAT credit shall be computed as under: MAT credit available = Tax paid u/s 115JB - Tax payable on the total income under normal provisions of the Act. 9.1 The amount of tax credit so determined shall be allowed to be carried forward and set off in a year when the tax becomes payable on the total income computed under the regular provisions. However, no carry forward shall be allowed beyond the tenth assessment year immediately succeeding the assessment year in which the tax credit becomes allowable. The set off in respect of the brought forward tax credit shall be allowed for any assessment year to the extent of the difference between the tax on the total income and the tax which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (a) above 1b 0 1c Education Cess on (1a+1b) above 1c 0 1d Total Tax Payable u/s 115JB (1a+1b+1c)MAT) 1d 0 2 Tax payable on total income a Tax at normal rates 2a 0 b Tax at special rates (11 of Schedule-SI) 2b 0 c Tax Payable on Total Income (2a + 2b) 2c 0 3 Surcharge on 2c 3 0 4 Education Cess, including secondary and higher education cess on (2c + 3) 4 0 5 Gross tax liability (2c+3+4) 5 0 6 Gross tax payable (higher of 5 and 1d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greater than 13e, else enter 0) 14 0 15 Refund (If 13e is greater than 12, also give the bank account details in Schedule-BA) 15 0 9.6 The tax liabilities for normal provisions as well as MAT are calculated with surcharge and cess. The MAT credit in row 7 are calculated automatically using the prescribed algorithm, this is nothing but balancing figure i.e., the difference between tax liability as per normal provisions and MAT provisions. Both the above tax liabilities are calculated with surcharge and cess. These are the standard format, which are expected to be followed by all the assessees and also important to note that the above format of ITR 6 was amended w.e.f. AY 2012-13 by CBDT. Moreover, this is more relevant for the department also. These formats are regulated by CBDT. Assessing Officer cannot overlook these formats and (interpret it in his own method of calculating tax credit while making assessment u/s 143(1) of the Act.) proceed to calculate the MAT credit to compute assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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