Commissioner of Income Tax vs Bannari Amman Spinning Mills Ltd.

K. Raviraja Pandian, J.—The appeal has been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Madras

''D'' Bench, Chennai, dated 9.2.2007 passed in ITA No. 3360/Mds/2004 for the assessment year 2000-2001.

The material facts culled out from the statement of facts in the memorandum of grounds of appeal are as follows:

The assessee, which is a company engaged in the manufacture of yarn filed its return of income for the assessment year 2000-01 on 29.11.2000

declaring a total income of Rs. 1,99,83,610/-. The assessing officer included sales tax and excise duty as form part of the total turn over in

computing the deduction u/s 80HHC of the Income Tax Act. Against that order, the assessee preferred an appeal before the Commissioner of

Income Tax (Appeals), who excluded the excise duty and sales tax from the total turn over. Against that order, the Department preferred an

appeal before the Income Tax Appellate Tribunal and the Tribunal following the decision of this Court in the case of The Commissioner of Income

Tax, Tamilnadu-I, Madras Vs. Wheels India Limited, dismissed the Departmental appeals. The assessing officer has given credit for the brought

forward MAT credit after calculating interest u/s 234B and 234C. On appeal the Commissioner of Income Tax (Appeals) following the decision of

the Tribunal in the case of Chemplast Sanmar 83 TTJ 427 directed the brought forward MAT credit available is to be treated at par with advance

tax and TDS and the assessing officer shall calculate the interest u/s 234B and 234C after giving credit for the brought forward MAT credit. The

Income Tax Appellate Tribunal uphold the order of the first Appellate Authority and dismissed the departmental appeal. Aggrieved by the same,

the revenue preferred the present appeal by formulating the following questions of law:

Whether in the facts and circumstances of the case, the Tribunal was right in law in holding that the sales tax and excise duty collections would

not form part of the turn over for the purpose of reckoning the quantum of deduction u/s 80HHC of the Income Tax Act, 1961?

Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in law in holding that the question of payment of

interest to the assessee would arise only if set off MAT credit is allowed against the advance tax payment and it should be treated on par with the

advance-tax?

The appeal was admitted on the second question of law alone, as the first question of law is covered by the decision of this Court in The

Commissioner of Income Tax Vs. Sundaram Clayton Ltd., , which was confirmed by the Apex Court in Commissioner of Income Tax,

Coimbatore Vs. Lakshmi Machine Works, .

We heard the arguments of the learned Counsel for the appellant and perused the materials available on record.

The identical issue as that of the second question of law involved in this appeal has been considered by the Division Bench of this Court in

T.C.A.Nos.887 of 2004 etc. batch on 09.04.2009 and was answered against the revenue, wherein it was held thus:

In the present case, the intention of the legislature is to give tax credit to tax and not to the tax and interest. Once the intention is clear, the

revenue cannot rely on the Form-I to say that the MAT credit u/s 115JAA should be given only after tax and interest. Further we have answered

the first question of law in favour of the assessee i.e. the MAT credit u/s 115JAA should be given effect to before charging the interest u/s 234B

and 234C. Rule 12(1)(a) and Form-I cannot go beyond the provisions of the Act. Form-I cannot lay down the order of priority of adjustment of

TDS, advance Tax, MAT credit u/s 115JAA which is contrary to the provisions of the Act. The order passed by the Tribunal is in accordance

with law and we do not find any error or illegality in the order of the Tribunal so as to warrant interference. Accordingly, we answer the questions

2 and 3 also in favour of the assessee and as against the Revenue.

As the second question of law involved in this case is identical to the one considered by the Division Bench, following the Division Bench

Judgment stated supra, the appeal is dismissed since the question of law has already been answered in favour of the assessee.