Brief : Recently in the case of Krung Thai Bank PCL Vs. Jt Director of Income-tax – International Taxation (ITA No. 3390/Mum/2009) (Mum), the Mumbai bench of the Income-tax Appellate Tribunal (the Tribunal) held that the provisions of Section 11 5JB of the Income-tax Act, 1961 (the Act) pertaining to Minimum Alternate Tax (MAT) would come into play only when the tax payer is required to prepare its profit and loss account in accordance with the provisions of Part II and III of Schedule VI of the Companies Act.
Further, since banking companies are not required to prepare their financial statements as per Schedule VI to the Companies Act in view of the exemption set out under proviso to Section 211 (2) of the Companies Act, the tribunal held that the provisions of Section 11 5JB of the Act cannot be applied to a banking company.
Citation : Krung Thai Bank PCL v. Jt Director of Income-tax – International Taxation (ITA No. 3390/Mum/2009) (Mum)
Court : Mumbai bench of the Income-tax Appellate Tribunal
Facts of the case
- · The taxpayer is a foreign bank operating in India through branch office. As per the profit and loss account, the tax payer had shown a profit of INR 7.83 million. In its return of income, the tax payer had declared a NIL income after making adjustment under the normal provisions of the Act and after setting off prior years losses. The taxpayer did not compute tax liability under the MAT provisions in its return of income.
- · The Assessing Officer (AO) completed the assessment under Section 143(3) of the Act without making any adjustment to the returned income. However, the AO subsequently re-opened the assessment under Section 147 of the Act for the reason inter-alia that the tax payer had not computed its tax liability under the MAT provisions. The Commissioner of Income-tax (Appeals) upheld the order of the AO.
Taxpayer’s contention
