2016 (4) TMI 1126 - AT - Income Tax

Interest under section 244A of the Act on MAT credits - Held that - Respectfully following the aforesaid decision of the Hon ble Bombay High Court in the case of APAR Industries Ltd. (2010 (4) TMI 151 - BOMBAY HIGH COURT ), we hold and direct that assessee is entitled to be allowed interest under section 244A of the Act on refundable taxes after giving credit of brought forward MAT credit. Credit for brought forward for allowance of MAT - Held that - Credit for brought forward MAT is to be given from gross demand before interest is charged under section 234B. See APAR Industries Ltd. (2010 (4) TMI 151 - BOMBAY HIGH COURT )

Summary

Issues:
1. Allowance of interest under section 244A on MAT credits.
2. Treatment of credit under section 115JA before charging interest under sections 234B and 234C.

Issue 1: Allowance of interest under section 244A on MAT credits:
The appeal by the Revenue was against the order of the CIT(A)-39, Mumbai for A.Y. 2001-02. The case involved the assessment of the assessee's income and subsequent proceedings under section 147 of the Income Tax Act, 1961. The Assessing Officer (AO) issued a notice under section 154 of the Act, challenging the excess MAT credit given. The CIT(A) allowed partial relief to the assessee, leading to the Revenue's appeal. The main contention was whether interest under section 244A should be allowed on MAT credits. The Revenue argued against it, citing the proviso to section 115JAA. However, the CIT(A) relied on the decision of the Hon'ble Bombay High Court in APAR Industries Ltd. case to support the allowance of interest under section 244A on refundable taxes after giving credit of brought forward MAT. The Tribunal, following the High Court's decision, dismissed the Revenue's appeal on this ground.

Issue 2: Treatment of credit under section 115JA before charging interest under sections 234B and 234C:
The second ground raised by the Revenue was related to the treatment of credit under section 115JA before charging interest under sections 234B and 234C of the Act. The Revenue contended that the CIT(A) erred in following the decision of the Hon'ble Delhi High Court in Jindal Exports Ltd. case, arguing that credit under section 115JA should be allowed before charging interest under sections 234B and 234C. The CIT(A), however, based her decision on the judgment of the Hon'ble Bombay High Court in APAR Industries Ltd. case, which held that credit for brought forward MAT should be given before charging interest under section 234B. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal on this ground as well.

In conclusion, the Appellate Tribunal ITAT Mumbai, in the cited judgment, addressed the issues of allowing interest under section 244A on MAT credits and the treatment of credit under section 115JA before charging interest under sections 234B and 234C. The Tribunal relied on relevant judicial precedents to decide in favor of the assessee, dismissing the Revenue's appeal for A.Y. 2001-02.