2019 (12) TMI 1208 - AT - Income Tax

MAT credit - after the appeal effects are given by the AO for earlier years, the balance MAT credit may be allowed in the hands of the assessee - HELD THAT - We find merit in the claim of the assessee and direct the AO to allow the MAT credit, if any, determined after giving appeal effect in earlier years. The Ground of appeal is thus allowed. Short credit of tax deducted at source - HELD THAT - We hold that where the assessee is able to furnish the necessary details with regard to tax deduction at source out of the amounts due to it, then the action which follows is allowing the credit of such tax deducted at source to the account of the deductee. In case where the deductor deposits the tax deducted at source to the credit of the Central Government and the deduction reflects in Form No.26AS may be on a later date, then it is incumbent upon the assessee to produce the necessary evidence in this regard and it is also the duty of the Assessing Officer to allow such credit of tax deducted at source, as taxes paid in the hands of the deductee assessee. We direct the Assessing Officer to allow the credit of tax deducted at source in the hands of the assessee, where the assessee produces the primary evidence of same being deducted tax at source out of the amount due to it. The ground of appeal no. 6 is thus allowed. Charging of interest u/s 234A - assessee had filed the return of income on 30.11.2015 which was the prescribed due date for filing the return of income by the assessee u/s 139(1) - HELD THAT - We find merit in the plea of the assessee that where the due date of filing return of income was 30.11.2015 and since the assessee had filed return of income on 30.11.2015, then there was no merit in charging of interest u/s 234A Charging of interest u/s 234C - The said interest is to be computed on the returned income of the assessee and not the income assessed by the Assessing Officer. The Assessing Officer may verify the stand of the assessee in this regard and re-compute the interest chargeable u/s 234C

Issues Involved:
1. Limitation of the order under section 153 r.w.s 144C.
2. Disallowance of depreciation on goodwill.
3. Disallowance of ESOP expenses.
4. Non-grant of foreign tax credit.
5. Non-grant of MAT credit.
6. Short credit of tax deducted at source.
7. Short credit of self-assessment tax.
8. Charging of interest under section 234A.
9. Charging of interest under sections 234B and 234C.

Detailed Analysis:

1. Limitation of the Order:
The first ground raised by the assessee was that the order passed by the Assessing Officer (AO) was barred by limitation under section 153 r.w.s 144C of the Income-tax Act. However, this ground was not pressed by the assessee and was dismissed as not pressed.

2. Disallowance of Depreciation on Goodwill:
The assessee contested the disallowance of depreciation on goodwill amounting to ?89,28,64,060. The Tribunal noted that this issue was already adjudicated in the assessee's favor in earlier years, specifically in ITA No.1308/Del/2015 for Assessment Year 2010-11 and ITA No.7637/Del/2018 for Assessment Year 2014-15. Following the same reasoning, the Tribunal allowed the claim of depreciation on goodwill for the current assessment year.

3. Disallowance of ESOP Expenses:
The assessee challenged the disallowance of ESOP expenses amounting to ?14,99,05,312. The Tribunal observed that this issue was similarly adjudicated in the assessee's favor in previous years. The Tribunal held that the ESOP expenses were deductible as business expenditure under section 37(1) of the Act. The Tribunal also clarified that tax deduction at source (TDS) on ESOPs would arise only when the options are exercised by employees, not at the time of reimbursement to the parent company. Consequently, the Tribunal allowed the ESOP expenses for the current year.

4. Non-Grant of Foreign Tax Credit:
The assessee claimed foreign tax credit of ?4,51,62,275, out of which ?3,58,00,000 was allowed by the AO. The balance of ?88,67,811 was not allowed due to the absence of necessary certificates. The Tribunal found no merit in the assessee's plea as the required certificates were not produced, and thus, this ground was dismissed.

5. Non-Grant of MAT Credit:
The assessee claimed MAT credit of ?21,22,53,782, out of which ?18,71,00,000 was allowed by the AO. The Tribunal directed the AO to allow the balance MAT credit after giving appeal effects for earlier years, thereby allowing this ground.

6. Short Credit of Tax Deducted at Source:
The assessee claimed TDS credit of ?18,79,68,945, but the AO allowed only ?16,57,18,029, resulting in a shortfall of ?2,22,50,916. The Tribunal directed the AO to verify the details and allow the TDS credit as per the revised Form No.26AS, thereby allowing this ground.

7. Short Credit of Self-Assessment Tax:
The issue of short credit of self-assessment tax amounting to ?1,54,01,450 was not specifically addressed in the order, implying it was not pressed or was considered along with TDS credit issues.

8. Charging of Interest under Section 234A:
The assessee argued that the interest under section 234A was wrongly charged as the return was filed on the due date. The Tribunal found merit in this plea and directed the AO to delete the interest charged under section 234A.

9. Charging of Interest under Sections 234B and 234C:
The interest under section 234B was deemed consequential and thus dismissed. However, the Tribunal directed the AO to recompute the interest under section 234C based on the returned income, allowing this ground partially.

Conclusion:
The appeal was partly allowed, with significant relief granted on the issues of depreciation on goodwill, ESOP expenses, MAT credit, TDS credit, and interest under section 234A. The Tribunal's directions provided a comprehensive resolution to the various grounds raised by the assessee.

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