The Income Tax Appellate Tribunal (ITAT), Pune bench has held that surcharge, education cess, and additional surcharges are eligible for minimum alternate tax (MAT) credit under section 115JAA.
The appellant, Adurjee & Bros Pvt. Ltd. during assessment proceedings claimed minimum alternate tax (MAT) credit utilized to an extent of Rs.33,41,567/- under section 115JAA of the Act, the CPC, Bangalore allowed MAT credit to an extent of Rs.30,73,272/- and disallowed Rs.2,68,295/-. The aggrieved appellant filed an appeal before the CIT(A) which confirmed the addition holding that the education cess is not included in income tax. Hence the appellant approached ITAT.
The Tribunal observed that income tax includes surcharge, education cess, and additional surcharge in the form of secondary and higher education cess and there cannot be a denial of the utilization of credit under section 115JAA of the Act towards surcharge and education cess when the assessee paid tax including the said surcharge and education cess.
The Coram of Mr. Inturi Rama Rao, Accountant Member, and Mr. S. S. Viswanethra Ravi, Judicial Member has held that “we note that the assessee claimed a minimum alternate tax credit of Rs.33,41,567/- but the AO denied to grant to an extent of Rs.2,68,295/- (Rs.1,70,968/- +Rs.97,327/-) being surcharge and education cess, respectively, in our opinion, is not justified. Therefore, the AO is directed to allow set-off credit including surcharge and education cess. Thus, the addition made by the AO and as confirmed by the CIT(A) is deleted”.
Mr. R.S. Abhyankar and Mr. Arvind Desai appeared on behalf of the assessee and revenue respectively.
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