Assessee entitled to Claim Credit for MAT under VSV Scheme for year under consideration: ITAT [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that the assessee was entitled to claim credit for Minimum Alternate Tax ( MAT ) under the Vivad se Vishwas ( VSV ) Scheme for the year under consideration.

The assessee has paid tax under Section 115JB of the Income Tax Act and accordingly claimed the credit for MAT during the year under consideration. The credit was denied for the reason that for AY 2006-07 the assessed income as per the normal provisions of the Act was more than the income as per Section 115JB of the Income Tax Act, and therefore the assessing officer held that there was no MAT credit available to be set off during the year under consideration.

Mr. Nikhil Tiwari representing the assessee submitted that the assessee has opted for Vivad se Vishwas Scheme ( VSVS ) for AY 2006-07 and as per the Scheme, the assesses are given option to - (i) include the amount by which MAT credit to be carried forward is reduced in disputed tax and carry forward the MAT credit by ignoring such amount of reduction or alternatively (ii) carry forward the reduced MAT credit.

 Further submitted that the assessee has chosen the first option (ii) and therefore the MAT credit was allowed to be carried forward to be set off during the year under consideration.

The counsel for the revenue Mr. Ujjawal Kumar Chavan submitted that the issue contended has not been factually examined by the lower authorities and accordingly prayed that the issue may be remitted back to the assessing officer for verification.

The bench  noticed from the above extracted relevant clauses & clarifications of VSV Scheme it was clear that the if the assessee chooses to include the amount of tax related to such MAT credit in the amount of disputed tax then the assessee shall be allowed to carry forward the MAT credit.

It was the submission of the assessee that the assessee has chosen the said option. It was important to verify based on evidences and supporting documents relating submitted under VSVS by the assessee before allowing the MAT credit to be adjusted in the tax for the year under consideration

The coram of Vikas Aswathy ( Judicial member ) and Padmavathy S. ( Accountant member ) concluded that the lower authorities have denied the claim of the assessee for the reason that the claim was not adequately substantiated. Therefore ITAT remitted the issue back to the assessing officer with a direction to verify the claim of the assessee based on the documentary evidence and allow the claim in accordance with law. Needless to say that the assessee was given an opportunity of being heard.

To Read the full text of the Order CLICK HERE

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