Case Law Details
Brief of the case:
Madras High Court in the case of CIT Vs M/s Ambattur Clothing Limited held that for calculating the assessed tax priority has to be given to adjust the MAT credit then TDS and advance tax would be adjusted by relying on the decision of Supreme Court in [2011] 330 ITR 226 (SC) COMMISSIONER OF INCOME-TAX v.TULSYAN NEC LTD . Moreover for calculating the interest u/s 234B, MAT credit if available had to be adjusted.
Facts of the case:
The assessee declared its gross total income of Rs 6,50,15,073/- and the AO computed the normal income of Rs 1,33,06,600/- and book profit u/s 115JA at Rs 1,77,48,720/- .On which AO computed the MAT of Rs 46,57,310/- then the TDS, advance Tax was deducted after that interest u/s 234B and 234C was added .After that tax paid u/s 140A and MAT credit was deducted . After all deduction refund was coming, Assessee was claiming interest on the refund amount as the excess advance tax was paid but AO was of the opinion that it was the excess MAT credit which was claiming as refund so as per the provisions of the IT act ,no interest could be claimed on MAT credit.
Contention of the assessee:
Assessee was of the view MAT should be first adjusted from the tax payable then the TDS and advance Tax to be deducted and the balance amount if any will be paid or refund as the case may. So in the above case as the balance amount was coming as refund so it was the excess tax paid by assessee on which it was claiming the interest not the excess MAT credit .So interest on refund amount should be allowed to the assessee.
Contention of the revenue:
Revenue was of the view that assessee was not liable to pay the advance tax up to the amount of MAT credit. As per the provisions of MAT, interest was not payable on the MAT credit. So the assessee was So it was the MAT credit which was coming as refund and the assessee was not eligible to claim the interest on refund amount which was MAT credit.
Held by High Court:
Madras High Court in the above case held that for calculating the interest u/s 234B, MAT credit u/s 115JAA to be excluded on priority basis to calculate the assessed tax so from there it was clear that MAT credit had to be deducted before of TDS and advance tax for calculating the refund. . So the appeal of assessee was allowed as after adjusting the full MAT credit and even after deducting the TDS and advance tax, refund was there so the same had to be excess paid advance tax or excess deducted TDS.
High Court held that as per the decision of Supreme Court in [2011] 330 ITR 226 (SC) COMMISSIONER OF INCOME-TAX v.TULSYAN NEC LTD, priority should be given first to the adjustment of MAT credit, then the adjustment of TDS and advance tax had to be made.
