2021 (9) TMI 799 - AT - Income Tax

MAT credit computation clarified by Tribunal: Tax inclusive of surcharge & cess.

M/s. Tata Motors Ltd. Versus The Asst. CIT (LTU) -I, Mumbai

The appeal of the assessee was partly allowed based on the correct computation of MAT credit u/s.115JAA of the Income Tax Act. The Tribunal determined ... Computation of set off of MAT credit u/s.115JAA - whether it should be excluding surcharge and cess or including surcharge and cess - HELD THAT:- This issue is no longer res-integra in view of the decision in assessee’s own case by this Tribunal [2021 (7) TMI 207 - ITAT MUMBAI] held that while computing MAT credit u/s.115JAA of the Act, the tax should be inclusive of surcharge and cess. Similar views were taken by the Hon’ble Calcutta High Court in the case of SREI Infrastructure Finance Ltd.[2016 (8) TMI 967 - CALCUTTA HIGH COURT] and in the case of DCIT vs. Scope International[2019 (8) TMI 1761 - MADRAS HIGH COURT].- Decided in favour of assessee. Issues:Validity of invoking jurisdiction u/s.154 of the Income Tax Act.Computation of set off of MAT credit u/s.115JAA of the Act.Analysis:1. Validity of invoking jurisdiction u/s.154 of the Income Tax Act:The appeal in ITA No.1643/Mum/2020 for A.Y.2015-16 challenged the validity of the ld. AO invoking jurisdiction u/s.154 of the Act. The ground was not pressed during the hearing and was dismissed. The ld. AO had passed a rectification order u/s.154 r.w.s. 143(3) of the Act on 25/01/2019, granting MAT credit to the assessee. However, the grievance was that the MAT credit granted was short of the actual amount. The action of the ld. AO was upheld by the ld. CIT(A).2. Computation of set off of MAT credit u/s.115JAA of the Act:The main issue raised by the assessee was regarding the computation of set off of MAT credit u/s.115JAA of the Act. The assessee contended whether the MAT credit should be calculated excluding surcharge and cess or including them. The assessee, engaged in the business of vehicles and parts, had filed a return of income for A.Y.2015-16 showing losses under normal provisions and u/s.115JB of the Act. The ld. AO passed an order determining total loss under normal provisions and assessed income from a specified foreign company. The ld. AO granted MAT credit to the assessee, but the amount was disputed by the assessee. The Tribunal referred to its decision in the assessee's own case for A.Y.2014-15 and decisions by the Calcutta High Court and Madras High Court, holding that while computing MAT credit u/s.115JAA, tax should be inclusive of surcharge and cess. Consequently, the ground raised by the assessee on this issue was allowed on merits.In conclusion, the appeal of the assessee was partly allowed based on the correct computation of MAT credit u/s.115JAA of the Income Tax Act. The Tribunal relied on previous decisions to determine that tax should be inclusive of surcharge and cess while calculating the MAT credit.