Surcharge and Education Cess can be Calculated after Deducting the MAT Credit from Assessed Income: ITAT Hyderabad [Read Order]

Educational Cess - Education Cess Tax - Taxscan

The Income Tax Appellate Tribunal (ITAT) Hyderabad bench, on Friday held that Surcharge and Education Cess should be calculated only after deducting the MAT credit under Section 115JAA of the Income Tax Act, 1961.

The bench was hearing an appeal of the Revenue Department against the order of CIT(A) which held in favor of the assesse, Divi’s Laboratories Ltd., based in Hyderabad.

The sole grievance of the assesse in the instant case was that the revenue department was insisting on charging the surcharge and education cess before calculating the MAT credit which ended up in this appeal before the ITAT. While computing the total assessed income, tax and interest, Assessing Officer has calculated the tax due after charging surcharge and education cess, then, allowed the tax credit available u/s 115JAA. Aggrieved, assessee preferred an appeal before the first appellate authority.

The bench consisting of Judicial Member P. Madhavi Devi and Accountant Member S. Rifaur Rahman, while hearing the departmental appeal, noticed that the Hyderabad bench of ITAT, in the case of Virtusa (India) Pvt. Ltd has concluded a similar issue in favour of the assessee.

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