Appellant v. M/S.bannari Amman Spinning Mills Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 20.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.1028 of 2007 Commissioner of Income TaxCoimbatore Appellantv. M/s.Bannari Amman Spinning Mills Ltd.,252, Mettupalayam Road Coimbatore – 641 043.Respondent Tax Case Appeal filed under section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal,Madras 'D' Bench, Chennai, dated 9.2.2007 passed in ITANo.3360/Mds/2004 for the assessment year 2000-2001 against theorder of the Commissioner of Income Tax (Appeals)I, Coimbatoredt.8.10.2004 made in Appeal No.17/2003-04 against the order of theAsst. Commissioner of Income Tax Company Circle 1(2) Coimbatoredated 17.2.2003,made in PAN-GIR No.AAACB 8513B/B-10, for theassessment year 2000-01. For appellant :Mr.J.Nareshkumar,Standing Counsel for Income-tax. For Respondent: Mr.Venkatanarayanan JUDGMENT (Judgment of the Court was delivered byK.RAVIRAJA PANDIAN, J.) The appeal has been preferred by the revenue against theorder of the Income Tax Appellate Tribunal, Madras 'D' Bench,Chennai, dated 9.2.2007 passed in ITA No.3360/Mds/2004 for theassessment year 2000-2001. 2. The material facts culled out from the statement of factshttps://hcservices.ecourts.gov.in/hcservices/in the memorandum of grounds of appeal are as follows:- The assessee, which is a company engaged in the manufactureof yarn filed its return of income for the assessment year 2000-01on 29.11.2000 declaring a total income of Rs.1,99,83,610/-. Theassessing officer included sales tax and excise duty as form partof the total turn over in computing the deduction under Section80HHC of the Income-tax Ac;t. Against that order, the assesseepreferred an appeal before the Commissioner of Income-tax(Appeals), who excluded the excise duty and sales tax from thetotal turn over. Against that order, the Department preferred anappeal before the Income-tax Appellate Tribunal and the Tribunalfollowing the decision of this Court in the case of CIT Vs. WheelsIndia Limited reported in 275 ITR 319 dismissed the Departmentalappeals. The assessing officer has given credit for the broughtforward MAT credit after calculating interest under Section 234Band 234C. On appeal the Commissioner of Income-tax (Appeals)following the decision of the Tribunal in the case of ChemplastSanmar, 83 TTJ 427 directed the brought forward MAT creditavailable is to be treated at par with advance tax and TDS and theassessing officer shall calculate the interest under Section 234Band 234C after giving credit for the brought forward MAT credit.The income-tax Appellate Tribunal uphold the order of the firstAppellate Authority and dismissed the departmental appeal.Aggrieved by the same, the revenue preferred the present appealby formulating the following questions of law:-"1. Whether in the facts and circumstancesof the case, the Tribunal was right in law inholding that the sales tax and excise dutycollections would not form part of the turn overfor the purpose of reckoning the quantum ofdeduction under Section 80HHC of the Income-taxAct, 1961? 2. Whether on the facts and in thecircumstances of the case the Appellate Tribunalwas right in law in holding that the question ofpayment of interest to the assessee would ariseonly if set off MAT credit is allowed against theadvance tax payment and it should be treated onpar with the advance-tax? 3. The appeal was admitted on the second question of lawalone, as the first question of law is covered by the decision ofthis Court in COMMISSIONER OF INCOME-TAX VS. SUDNARAM CLAYTONLTD., (281 ITR 425), which was confirmed by the Apex Court inCOMMISSIONER OF ICNOME-TAX VS. LAKSHMI MACHINE WORKS (290 ITR667). 4. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. 2. Whether on the facts and in thecircumstances of the case the Appellate Tribunalwas right in law in holding that the question ofpayment of interest to the assessee would ariseonly if set off MAT credit is allowed against theadvance tax payment and it should be treated onpar with the advance-tax? 3. The appeal was admitted on the second question of lawalone, as the first question of law is covered by the decision ofthis Court in COMMISSIONER OF INCOME-TAX VS. SUDNARAM CLAYTONLTD., (281 ITR 425), which was confirmed by the Apex Court inCOMMISSIONER OF ICNOME-TAX VS. LAKSHMI MACHINE WORKS (290 ITR667). 4. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. https://hcservices.ecourts.gov.in/hcservices/5. The identical issue as that of the second question of law involved in this appeal has been considered by the Division Benchof this Court in T.C.A.Nos.887 of 2004 etc. batch on 09.04.2009and was answered against the revenue, wherein it was held thus:-"18. In the present case, the intention of thelegislature is to give tax credit to tax and notto the tax and interest. Once the intention isclear, the revenue cannot rely on the Form-I to saythat the MAT credit under Section 115JAA should begiven only after tax and interest. Further wehave answered the first question of law in favourof the assessee i.e. the MAT credit under Section115JAA should be given effect to before chargingthe interest under Section 234B and 234C. Rule 12(1)(a) and Form-I cannot go beyond the provisionsof the Act. Form-I cannot lay down the order ofpriority of adjustment of TDS, advance Tax, MATcredit under Section 115JAA which is contrary tothe provisions of the Act. The order passed by theTribunal is in accordance with law and we do notfind any error or illegality in the order of theTribunal so as to warrant interference.Accordingly, we answer the questions 2 and 3 alsoin favour of the assessee and as against theRevenue. 6. As the second question of law involved in this case isidentical to the one considered by the Division Bench, followingthe Division Bench Judgment stated supra, the appeal is dismissedsince the question of law has already been answered in favour ofthe assessee.Sd/Asst.Registrar/true copy/ Sub Asst.Registrar usk To 1.The Asst.Registrar,Income Tax Appellate Tribunal,Rajaji Bhavan, Besant Nagar, Chennai-90. 2. The Commissioner of Income Tax Coimbatore Coimbatore 3. The Income Tax Appellate Tribunal, Chennai 'D' Bench, Chennai. Chennai 'D' Bench, Chennai. 4.The Assistant Commissioner of Income TaxCompany Circle 1 (2) Coimbatore.Company Circle 1 (2) Coimbatore. 5.The Commissioner of Income Tax (Appeals) Coimbatore. +1cc to Mr.J.Naresh Kumar, Sr.Standing Counsel for Income Tax Sr 15709JP(CO)km/29.4. T.C.(A)No.1028 of 2007