2009 (4) TMI 1028 - HC - Income Tax

Summary

Issues involved: Appeal by revenue against ITAT order denying tax credit under Section 115JAA, questions on interest calculation and precedence of MAT credit.

Tax Credit under Section 115JAA:
- Assessee claimed tax credit of Rs. 8,46,276 under Section 115JAA(4) and (5) for book profits in 1999-2000.
- AO denied claim, stating no provision for MAT credit on gross tax payable.
- CIT(A) allowed claim based on Chemplast Sanmar Limited case, adjusting MAT credit before TDS and advance tax.
- Tribunal upheld decision citing Chemplast Sanmar Limited, dismissing revenue's appeal.
- Revenue appealed, questioning interest calculation u/s 234B and C, citing Madras HC judgment and computation of interest credit under Section 115JAA.
- Division Bench, in line with CIT v. Jindal Experts Ltd., held MAT credit should precede interest under Section 234A, 234B, and 234C.
- Bench clarified legislative intent to give tax credit, not to tax and interest, rejecting reliance on Form-I for priority of adjustments.
- Upheld Tribunal's order, answering all questions against revenue in favor of assessee.
- Appeal dismissed as questions of law already answered in favor of assessee.