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2014 (6) TMI 215 - AT - Income TaxLevy of Surcharge and education cess - MAT credit u/s 115JAA - minimum alternate tax - Held that - There was no justification to interfere with the order of CIT(A) in allowing the appeal of the assessee - CIT(A) has correctly referred to the columns made in the IT return for the purpose of calculating the tax liability, which is specifically provided and is followed correctly by the CIT(A) - from next AY 2012-13, the position was changed Following Universal Medicare P. Ltd, Capsulation Premises Versus ACIT LTU Mumbai 2014 (5) TMI 988 - ITAT MUMBAI - The claim of the assessee is that is that MAT credit should first be reduced from the tax payable and thereafter on the residual amount the surcharge and education cess be levied - In the income tax Return from ITR-6, column no.4, the assessee is required to fill the credit u/s 115JAA of tax paid in earlier years and after which on the balance tax payable, the assessee has to fill the surcharge and educational cess for the purpose of arriving at the gross tax liability there was no merit in the contention of the revenue Decided against Revenue.
Issues:
1. Challenge against the order directing surcharge and education cess after giving MAT credit. 2. Dispute over computation of tax payable and credit u/s 115JAA. 3. Interpretation of columns in the Income Tax Return for calculating tax liability. 4. Contradiction between IT return columns and Finance Act. Analysis: 1. The appeal challenged the order directing surcharge and education cess after giving MAT credit. The dispute arose from the computation of tax payable and credit u/s 115JAA. The appellant claimed that surcharge and education cess should be levied after allowing credit for tax paid in earlier years u/s 115JAA. The ITAT Mumbai Bench's decision in a similar case supported the appellant's contention, emphasizing that MAT credit should be reduced first before levying surcharge and education cess. 2. The ld. CIT(A) analyzed the columns in the Income Tax Return to determine the tax liability. He observed that tax credit u/s 115JAA should be allowed first, followed by the calculation of surcharge and education cess. The order highlighted the specific columns in the ITR-6 form for the assessment year under consideration, which indicated the correct method of computing tax liability. The decision was in line with the ITAT Mumbai's ruling and the prescribed format for AY 2011-12. 3. The ld. DR argued a contradiction between the columns in the IT return and the Finance Act, seeking to set aside the ld. CIT(A)'s order. However, the Tribunal found no reason to interfere with the decision, as the correct computation method was followed based on the ITR-6 columns. The change in position from the next assessment year was acknowledged, supporting the applicability of the ITAT Mumbai's decision in favor of the assessee. 4. Ultimately, the Tribunal dismissed the departmental appeal, upholding the ld. CIT(A)'s order. The decision was based on the correct interpretation of the tax liability calculation method as per the ITR-6 columns for AY 2011-12. The Tribunal found no merit in the department's contentions, as they were not supported by the record or the prescribed return of income format. The appeal was thus dismissed in favor of the assessee.
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