MAT Credit Revised from ₹29.17 Cr to ₹29.94 Cr Post-Appellate Recalculation: ITAT Upholds Higher Claim [Read Order]

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)’s direction to allow Minimum Alternate Tax (MAT) credit of Rs. 29,94,40,364 under Section 115JAA of the Income Tax Act, 1961 and ruled that the revision from the originally claimed Rs. 29,17,19,510 was consequential to the deletion of additions in appellate proceedings.

Garware Hi-Tech Films Limited (assessee) filed its return of income under Section 139(1) of the Income Tax Act, claiming MAT credit set-off of Rs. 29,17,19,506 against tax liability under regular provisions.

The return was processed under Section 143(1), where the Assessing Officer (AO) made additions of Rs. 1,06,40,000 under Section 35(1)(i) for research and development expenditure and Rs. 1,14,54,951 under Section 41, while allowing the claimed MAT credit.

Aggrieved by the additions and short allowance of MAT credit made by the AO, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) deleted both additions and directed the AO to recompute and adjust the correct MAT credit in the Order Giving Effect to the appellate order.

The CIT(A) observed that the assessee was eligible for Rs. 29,94,40,364 out of total brought forward MAT credit of Rs. 37,83,32,363.

Aggrieved by the CIT(A)’s order on the MAT credit issue, the Revenue appealed to the ITAT. The Revenue argued that the CIT(A) erred in allowing the higher MAT credit despite the assessee’s original claim in the ITR, and that condonation of delay for revising the claim was not permissible.

The two-member bench comprising Narendra Kumar Billaiya (Accountant Member) and Anikesh Banerjee (Judicial Member), observed that the Revenue did not contest the deletion of additions under Sections 35(1) and 41 of the Income Tax Act.

The bench held that the MAT credit adjustment was purely consequential to the appellate deletions, and no substantial objection was raised by the Revenue’s counsel.

The tribunal observed there was no infirmity in the CIT(A)’s order. The appeal of the Revenue was dismissed.

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