GURMINDER SINGH,AMBALA CITY V. INCOME TAX OFFICER WARD-2, AMBALA, AMBALA CANTT.

ITA 887/CHANDI/2025

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The case revolves around the dispute concerning the quantum of rebate under section 87A of the Income Tax Act for the Assessment Year 2024-25. The assessee, Sh. Gurminder Singh, contested the CPC's decision which limited his rebate, resulting in a higher tax liability than he calculated. The CPC's adjustment was based on the interpretation that the rebate under section 87A does not apply to the tax computed on LTCG from equity as per section 112A(6). However, the Tribunal distinguished between LTCG from equity and debt, noting that LTCG from debt does not fall under the restrictions of section 112A and thus, the rebate should be fully applicable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791899 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2024-2025
• Appeal Filed On: 08-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOATENLA LD.
• Keywords: Capital asset; Capital Gains

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.887/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2024-25) Sh. Gurminder Singh H.No.1998, Sec.9, Urban Estate Ambala City – 134003 बनाम/ Vs. ITO Ward-2 Ambala 133001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. CIDPS-7267-J (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Gurminder Singh (Assessee-in-person) ŮȑथŎकीओरसे/Respondent by : Smt. Moatenla (JCIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 17-11-2025 घोषणाकीतारीख /Date of Pronouncement : 10-12-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The sole grievance of the assessee in captioned appeal for Assessment Year (AY) 2024-25 is quantum of rebate u/s 87A. The impugned order has been passed by learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Nagpur [CIT(A)] on 27-05- 2025 in the matter of an intimation issued by CPC u/s 143(1) on 23-03- 2025. Having heard rival submissions, the appeal is disposed-off as under. Printed from counselvise.com 2 2. From case records, it emerges that the assessee has earned following income during this year: - No. Particulars Amount (Rs.) 1. Equity Long Term Capital Gains 1,03,264/- 2. Debt Long Term Capital Gains with indexation 1,19,020/- 3. Equity Short Term Capital Gains 2,247/- 4. Debt Short Term Capital Gains 7,607/- 5. Income from other sources 3,13,177/- Total 5,45,315/- Agricultural Income (for rate purposes) 8,47,263/- Against computed tax of Rs.27,586/-, the assessee claimed rebate u/s 87A for Rs.25,000/- and tax payable after rebate was shown to be Rs.2,586/-. However, CPC restricted the rebate u/s 87A to the extent of Rs.3,119/- which enhanced the tax payable after rebate to Rs.24,467/-. Finally, a demand to Rs.25,710/- was raised by CPC against the assessee. Aggrieved, the assessee preferred further appeal. 3. The Ld. CIT(A) held that in terms of provisions of Sec.112A(6), rebate u/s 87A would be allowed from Income Tax on total income as reduced by tax payable on capital gains as referred to in sub-section (1) of s.112A. Thus, this rebate would not be allowed on tax computed on Long-Term Capital Gains. Aggrieved, the assessee is in further appeal before us. 4. We find that sub-section (6) of s.112A prohibit rebate u/s 87A on capital gains as referred to in sub-section (1) of s.112A. The clause (ii) of s.112A(1) refer to capital gains arising from transfer of a Long-Term Capital Asset being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust. This clause thus refers only to Long-Term Equity Capital Gains and not to Long-Term Debt Capital Printed from counselvise.com 3 Gains. The debt Long Term capital gains are governed by the provisions of s.112 and as such there is no such bar to claim rebate u/s 87A on this income. The computation of tax payable would show that the assessee has computed tax of Rs.23,804/- (at the rate of 20% on Debt LTCG of Rs.1,19,020/-). The tax on other normal income (excluding equity LTCG) has been computed at Rs.3,456/- (i.e., Rs.337/- + Rs.3,119/-). Both these items well exceed rebate threshold limit of Rs.25,000/-. This being so, the assessee would be eligible to claim full rebate of Rs.25,000/-. We order so. The CPC is directed to re-compute the tax payable by the assessee. 5. The appeal stand allowed. Order pronounced on 10th December, 2025. -Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "