28 April 2011
As per section 115JB of the Income tax act, 1961, MAT Credit is allowed including the amount of EC and SHEC. As per this section, only the items specified are either included or excluded while computing MAT. In those items, prior period items are not mentioned. Hence, MAT shall be calculated after prior period expense. i.e on Rs. 90 only,
1. MAT credit is allowed u/s. 115JA of the Act. And it says credit shal b allowed on the of the amount of tax paid u/s. 115JB of the act. And 115JB specifies only 18.5%(from AY 2012-13) It nowhere talks about SC & Cess therefore i am of the view it would on basic rate.
Sc & Cess is governed by Finance Act.
2. sec 115JB is a presumptive section and has to be strictly read as it is. It talks about means the "net profit as shown in the profit and loss account for the relevant previous year"
Therefore again i m of the view that it shud b on Rs. 100/-.
30 April 2011
I agree with Mr Kishore, MAT Credit shall be for full value i.e. Including Cess. Cesses are integral part of all Tax liabilities including MODVAT Credits and Custom Credits. About Other Point, Net profit shown under Companies Act shall be considered i.e. after Prior Period Expenditure. These are only accounting terminologies i.e. Profit for the year or profit for the relevant year but spirit remains that MAT has to be paid on net profit. Just to make you realise, Mr Saurav, would you still hold your ground if There is prior period Income.
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