The Tax Publishers AMQ Agro India (P) Ltd. v. Asstt. CIT [ITA No. 666/Del/2014, dt. 29-4-2016] : 2016 TaxPub(DT) 2207 (Del-Trib) MAT credit to consider surcharge and education cess Facts: Assessees computation in the return was subjected to rectification where lower MAT credit was granted for INR 5.11 lakhs by not taking into account surcharge and education cess on MAT. This went in appeal to ITAT: Held in favour of the assessee in the wake of Explanation 2 of section 115JB which categorically clarifies that the amount of Income-tax shall inter alia include surcharge, if any and education cess on income-tax etc. K. Srinivasan v. CIT (1972) 83 ITR 346 (SC) applied that the term tax includes surcharge and cess. Note: Below decision of Virtusa India flash mailer - 104 also covered the same topic (full decision enclosed once again. MAT credit to consider surcharge and education cess Facts: Assessees return was processed by CPC and demand raised for Rs. 32,06,700 detailing as under which was affirmed by the Commissioner (Appeals) :-- Particulars Ref As per: | | Original return | Intimation under section return 143(1) | | Business income | 38,51,78,940 | 38,51,78,940 | | Interest income | 4,36,10,747 | 4,36,10,747 | | Total income | 42,87,89,687 | 42,87,89,687 | | Tax under normal provisions @ 30% | 12,86,36,907 | 12,86,36,907 | | Add: Surcharge - 5% | 64,31,845 | | | Add: Education cess - 3% | 40,52,063 | | | A | 13,91,20,815 | 12,86,36,907 | | Book profits as per section 115JB | 48,41,87,422 | 48,41,87,422 | | B | | | | Tax on book profits @ 18.5% | 8,95,74,673 | 8,95,74,673 | | Add: Surcharge - 5% | 44,78,734 | | | Add: Education cess - 5% | 28,21,602 | | | Total tax liability under MAT provisions (including surcharge and cess) | 9,68,75,009 | 8,95,74,673 | | Tax liability (higher of A&B) | 13,91,20,815 | 12,86,36,907 | | Less: MAT credit set off A-B | 4,22,45,806 | 3,90,62,234 | | Tax payable | 9,68,75,009 | 8,95,74,673 | | Add: Surcharge 5% | 64,31,845 | | | Add: Education cess - 3% | 40,52,063 | | | Total tax liability | 9,68,75,009 | 10,00,58,581 | Rest of the difference was due to section 234C interest levied by Commissioner (Appeals). Aggrieved assessee appealed to ITAT :-- (The key issue to be adjudicated was whether the calculation in red was to be as per the ITR 6 or as per the section 143(1) assessed income computation) Held by ITAT in favour of the assessee that their MAT credit calculation was in line with the return of income as per form ITR 6 which is universal across the country. K. Srinivasan v. CIT, (1972) 83 ITR 346 (SC) applied that the term tax includes surcharge and cess. Commissioner (Appeals) applied Richa Global Exports Pvt. Ltd. Del ITAT where it was interpreted that MAT credit meant only the tax without surcharge and cess. ITAT dismissed the Commissioner (Appeals)s computation on presumption that the above apex court decision might have not been brought to the notice of the ITAT Delhi.
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