INCOME TAX ACT, 1961

Section 115JAA

MAT - MAT credit under section 115JAA - Inclusion of surcharge and education cess - Computation of

The assessee was a wholly owned subsidiary of M/s. Standard Chartered Bank, UK and was engaged in the business of providing back end support to certain branches of the bank spread across the globe including India. The assessee contended that the tax liability discharged during the assessment year 2009-10 was based on section 115JB of the Act, as the tax calculated under the MAT provisions was higher than the tax calculated as per normal provisions of income tax and that this resulted in a MAT credit to the extent the tax liability under the MAT provisions higher than the tax liability under normal tax provisions to be carried forward for adjustment during the subsequent assessment years. It was further contended that while calculating the MAT credit, the AO considered only the tax amount without considering the surcharge and cess under normal tax provisions and MAT provisions and that this resulted in reduced amount of MAT credit. Held: The MAT Credit under section 115JAA brought forward from the earlier orders is to be set off against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before charging such a surcharge and education cess. Tribunal was right in confirming that MAT credit under section 115JAA includes surcharge and education cess instead of excluding surcharge and education cess.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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