The Amalgamated Co. can utilize the MAT credit of its Amalgamating Co.

Fact of the Case:

  1. The assessee was engaged in the business of manufacturing and sale of cement,
  2. The assessee got amalgamated with one of its peer company in the recent past.
  3. While filling the income tax return of AY 2006-07, assessee has claimed a set-off of carried forward loss Minimum Alternate Tax (MAT) Rs. 20.12 cr (which includes Rs. 6.99 cr of the amalgamating co.)
  4. During the assessment proceedings, AO comes across the fact that the out of Rs. 20.12 cr. MAT credit Rs. 6.99 cr. pertain to amalgamating co. so he referred the provisions of sec 115JAA and make adjustments in the MAT credit relates to amalgamating co, as AO was of view that MAT credit of amalgamating company can be utilised in the amalgamated company.
  5. The Commissioner (Appeals). has set aside the view considered by the assessing officer.

Held by the Hon’ble ITAT of Mumbai:

  1. ITAT has clarified the provisions of sec 115JAA by stating that any company, while calculating income tax on its income can take the MAT credit, which means even the amalgamated company can utilize the MAT credit of its amalgamating company also.
  2. Further ITAT states MAT credit can be carried forward for the maximum of fifteen year from the date when such credit creates.
  3. So as amalgamated company can utilize the MAT credit of its amalgamating company while computing tax on its income.


The aid judgement shall boost to the amalgamation of various companies in the Indian economy by which two peer firm can work as a single large firm which give a synergic effect to their output.

[2019] 111 10 (Mumbai – Trib.)

Ambuja Cements Ltd. V. Deputy Commissioner of Income-tax, LTU-1, Mumbai