Ganesham Securities (P) Ltd., Kolkata V. ITO, Ward - 6(2), Kolkata, Kolkata

ITA 1108/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54773 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 23-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K TIBREWAL
• Keywords: Assessment record
• Section: 115JB

Judgement Text

, ' , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( ) . . , , , , , , ) [BEFORE SRI S.V. MEHROTRA, A.M. & SRI MAHAVIR SING H, J.M.] ! ! ! ! / I.T.A NO. 1108/KOL/2011 ASSESSMENT YEAR : 2006-2007 GANESHYAM SECURITIES (P) LTD., KOLKATA -VS.- INCOME TAX OFFICER, WARD-6(2), KOLKATA (PAN : AAACL 4999 G) ( '# /APPELLANT ) ( $%'# / RESPONDENT ) FOR THE APPELLANT ( '# ) : SHRI A.K. TIBREWAL, A.R. FOR THE RESPONDENT ( $%'# ) : N O N E (ADJOURNMENT PETITION) &' ( ) * &' ( ) * &' ( ) * &' ( ) * /DATE OF HEARING : 30.12.2011 +, ) * +, ) * +, ) * +, ) * /DATE OF PRONOUNCEMENT : 30.12.2011 - / ORDER PER SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER/ . . , :- THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF LD. COMMISSIONER OF INCOME- TAX, KOLKATA -II, KOLKATA DATED 04.03.2011 FOR THE ASSESSMENT YEAR 2006-07. 2. THE APPEAL IS TIME-BARRED BY 80 DAYS. THE ASSESS EE HAS FILED A CONDONATION PETITION THROUGH ITS DIRECTOR ALONGWITH AFFIDAVIT OF SHRI VI SHNU LOHIA, C.A. IN THE CONDONATION PETITION, IT IS, INTER ALIA, STATED THAT DELAY WAS CAUSED ON ACCOUNT OF WRONG ADVISE OF VISHNU LOHIA, WHICH WAS SUBSEQUENTLY CORRECTED BY SENIOR C OUNSEL SHRI A.K. TIBREWAL, SHRI VISHNU LOHIA HAS CONFIRMED THESE FACTS ON AFFIDAVIT, THE A PPEAL COULD NOT BE PREFERRED IN TIME. WE, THEREFORE, CONDONE THE DELAY IN FILING THE APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE LD. CIT EXA MINED THE ASSESSMENT RECORDS FOR ASSESSMENT YEAR 2006-07 AND NOTICED THAT THE ASSESS ING OFFICER HAD FAILED TO INVOKE THE PROVISIONS TO SECTION 115JB OF THE INCOME TAX ACT. AFTER CONSIDERING THE DETAILS HE CONCLUDED THAT MAT OF RS.7,56,694/- BEING THE HIGHER TAX LIAB ILITY WAS REQUIRED TO BE CHARGED, WHICH WAS NOT DONE AT THE TIME OF COMPLETION OF THE ASSESSMEN T PROCEEDINGS. HE, THEREFORE, HELD THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE. THE ASSESSEE IN ITS REPLY SUBMITTED AS UNDER :- ITA NO. 1108/KOL./2011 2 (I) THE DESIGN OF THE FORM ITR-6 SUGGESTS THAT THE HIGHER OF TAX PAYABLE ON DEEMED TOTAL INCOME UNDER SECTION 115JB AND TAX PAYABLE ON TOTAL INCOME WOULD BE THE AMOUNT OF GROSS TAX PA YABLE WHICH IN THIS CASE IS RS.26,98,260/- BEING THE HIGHER OF RS. 6,71,504/- AND RS.26,98,260/- (ASSESSED). (II) THAT THE DESIGN OF THE FORM ITR-6 FURTHER SUGG ESTS THAT REBATE UNDER SECTION 88E WOULD BE DEDUCTED FROM GROSS TAX SO COMPUTED WHICH IN THIS CASE IS RS.26,96,757/-. (III) THAT IT IS MERELY A MISCONCEIVED UNDERSTANDIN G AS REGARDS THE APPLICABILITY OF MAT PROVISION. IF TAX PAYABLE ON N ORMAL INCOME AFTER SET OFF OF REBATE UNDER SECTION 88E IS LOWER THAN T HE TAX PAYABLE UNDER DEEMING PROVISIONS PRESCRIBED UNDER SECTION 115JB, THEN THE COMPARISON SHOULD BE BETWEEN TAX PAYABLE ON NORMAL INCOME BEFORE SET OFF OF REBATE UNDER SECTION 88E WITH TAX PAYABL E UNDER DEEMING PROVISIONS. LD. CIT CALLED FOR THE COMMENTS OF THE ASSESSING OF FICER WHO INTIMATED THAT INCOME TAX PAYABLE BY THE ASSESSEE HAD BEEN DETERMINED AT RS.1 .6.86/-, WHICH WAS LESS THAN 7 % OF THE BOOK PROFIT AND, THEREFORE, PROVISIONS OF SECTION 1 15JB WERE APPLICABLE. THE ASSESSING OFFICER FURTHER STATED AS UNDER :- (I) INCOME TAX PAYABLE ON TOTAL INCOME IS COMPUTED AFTER GIVING CREDIT TO PREPAID TAXES AND ALLOWING THE REBATE AS APPLICA BLE UNDER SECTION 88 OF THE I.T. ACT, 1961. THE ASSESSEES CONTENTION THAT THE INCOME-TAX PAYABLE ON TOTAL INCOME WOULD BE GROSS AMOUNT OF TA X BEFORE ALLOWING REBATE WAS LEGALLY NOT TENABLE. (II) THE DESIGN OF THE INCOME TAX RETURN SHOWS THAT REBATE UNDER SECTION 88E SHOULD BE GIVEN FIRST AND THEN SURCHARG E AND CESS ARE TO BE CHARGED. THUS, IT IS CLEAR THAT THE GROSS AMOUNT OF TAX IS THE ACTUAL AMOUNT OF TAX PAYABLE BY THE ASSESSEE. OTHERWISE, S URCHARGE AND E.C. WOULD HAVE BEEN CHARGED BEFORE ALLOWING REBATE. (III) THE INTERPRETATION OF THE ASSESSEE THAT THE P HRASE INCOME TAX PAYABLE BY THE ASSESSEE HAS NOT BEEN SPECIFICALLY DEFINED IN THE ACT AND IN ORDINARY PRUDENCE, THE SAME WOULD MEAN THAT THE INCOME-TAX WHICH WOULD BE PAYABLE AFTER ALLOWING ALL REBATES A ND NOT BEFORE THAT. FOR THIS REASON, THE CHARGING OF SURCHARGE AND CESS HAVE BEEN MADE AFTER ALLOWING REBATE UNDER SECTION 88E OF THE I.T. ACT, 1961. 4. LD. CIT ON THE BASIS OF SUBMISSIONS OF ASSESSEE AND THE REPORT BY THE ASSESSING OFFICER CONCLUDED THAT ON ACCOUNT OF NON-CONSIDERATION OF T HE PROVISIONS OF SECTION 115JB THE ASSESSMENT ORDER WAS ERRONEOUS AS WELL AS PREJUDICI AL TO THE INTEREST OF REVENUE. ITA NO. 1108/KOL./2011 3 5. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE FILED BEFORE US COPY OF ITAT ORDER AND SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED B Y THIS DECISION AND, THEREFORE, THE ASSESSMENT ORDER COULD NOT BE HELD TO BE ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. 6. AFTER PERUSING THE RECORDS OF THE CASE, WE FIND THAT JURISDICTIONAL TRIBUNAL IN THE CASE OF M/S. LOTUS CAPITAL FINANCIAL SERVICES LTD. VS.- IT O IN ITA NO. 479/KOL./2011 FOR ASSESSMENT YEAR 2006-07, HELD AT PARA 5 AS UNDER :- 5. WE FIND THAT THE ISSUE OF REBATE/DEDUCTION U/S . 88E OF THE ACT IN RESPECT TO CREDIT FOR SECURITY TRANSACTION TAX WHILE COMPUTING INCOME BEING MAT PROVISIONS OF SECTION 115JB OF THE ACT, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE BY THE DECISION OF BANGALORE BENCH IN THE CASE OF M/S. HORIZON CAPITAL LIMITED (SUPRA), WHEREIN THE TRIBUNAL VIDE PARA 6 HAS HELD AS UNDER: 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSI DERED THE RIVAL CONTENTIONS, WE FIND THAT THE ONLY DISPUTE IS WHETH ER THE REBATE OF STT PAID BY THE ASSESSEE IS ALLOWABLE FROM THE INCOME T AX COMPUTED AGAINST THE TOTAL INCOME COMPUTED UNDER SECTION 115 JB OF THE INCOME TAX ACT, 1961. THE TERM TOTAL INCOME HAS BEEN DEF INED UNDER THE INCOME TAX ACT, 1961 AS THE TOTAL AMOUNT OF INCOME REFERRED TO IN SECTION 5, COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. SECTION 5 OF THE INCOME TAX ACT, 1961 DEFINES THE SCOPE OF THE T OTAL INCOME OF A RESIDENT OR A NON-RESIDENT PERSON. THE TOTAL INCOME OF THE ASSESSEE HAS TO BE COMPUTED UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT, 1961 AND IN THE CASE OF A COMPANY IT CAN BE ARRIVED AT BOTH UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND UNDER THE DEEMING PROVISION UNDER SECTION 115JB OF THE ACT. IT HAS BE EN PROVIDED THAT WHERE THE INCOME TAX PAYABLE BY THE ASSESSEE ON THE TOTAL INCOME COMPUTED UNDER REGULAR PROVISIONS OF THE ACT IS LES S THAN 7 1/2% OF THE BOOK PROFIT PREPARED IN ACCORDANCE WITH THE COMPANI ES ACT, THE HIGHER OF THE TAX I.E. THE BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND TAX PAYABLE BY THE ASSESSEE SHALL BE THE AMOUNT OF INCOME TAX AT THE SPECIFIED RATE. WHEN WE LOOK AT T HE PROVISIONS OF SECTION 87 OF THE INCOME TAX ACT, 1961, WE FIND THA T THE REBATE IS TO BE GRANTED FROM THE AMOUNT OF INCOME TAX CHARGEABLE ON THE TOTAL INCOME OF THE ASSESSEE. THE INCOME TAX IS COMPUTED AFTER A RRIVING AT THE TOTAL INCOME OF THE ASSESSEE AND SECTION 87 OF THE INCOME TAX ACT, 1961 DOES NOT DIFFERENTIATE BETWEEN THE TOTAL INCOME COM PUTED UNDER THE REGULAR PROVISIONS OF THE ACT OR UNDER SECTION 115J B OF THE INCOME TAX ACT, 1961. EVEN THOUGH THE SUB SECTION (1) OF SECTI ON 115JB STARTS WITH THE NON-ABSTANTE CLAUSE, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, WE FIND THAT IT IS ON LY FOR THE COMPUTATION OF THE TOTAL INCOME AND THE SUB SECTION (5) OF SECT ION 115JB PROVIDES FOR A SAVING CLAUSE THAT THE REST OF THE PROVISIONS OF THE INCOME TAX ACT RELATING TO DEDUCTIONS, REBATE, ETC THE OTHER PROVI SIONS OF THE INCOME TAX ACT SHALL APPLY. THEREFORE IT IS CLEAR THAT THE PROVISION OF SECTIONS 87 AND 88A TO 88E ALSO APPLY AFTER THE TOTAL INCOME IS COMPUTED UNDER ITA NO. 1108/KOL./2011 4 SECTION 115JB OF THE INCOME TAX ACT, 1961 AND SINCE THE ASSESSEES TOTAL INCOME INCLUDES THE INCOME FROM THE TAXABLE S ECURITIES TRANSACTIONS, THE ASSESSEE IS ENTITLED TO A DEDUCTI ON OF THE AMOUNT EQUAL TO THE STT PAID BY HIM IN RESPECT OF THE TAXA BLE SECURITIES TRANSACTIONS ENTERED INTO IN THE COURSE OF BUSINESS DURING THE PREVIOUS YEAR. THE ASSESSEES APPEAL IS THUS ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO GIVE REBATE UNDER SECTION 88E FOR TH E STT PAID BY THE ASSESSEE. SINCE THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE ON MERITS, THERE IS NO QUESTION OF ANY REVISION ON THIS ASPECT BY CIT OF T HE ASSESSMENT ORDER. ONCE THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICI AL TO THE INTEREST OF REVENUE, CIT HAS WRONGLY INVOKED THE REVISION PROCEEDING U/S. 26 3 OF THE ACT. IT IS WELL SETTLED LAW THAT LD. CIT CAN REVISE AN A SSESSMENT ORDER ONLY WHEN IT IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE DEC ISION IN THE CASE OF M/S. LOTUS CAPITAL FINANCIAL SERVICES LTD. WAS RENDERED FOLLOWING THE DECISION OF BANGALORE BENCH IN THE CASE OF M/S. HORIZON CAPITAL LTD. VS.- ITO, WARD-11(2), BA NGALORE DELIVERED ON 16.07.2010. THEREFORE, EFFECT OF THIS DECISION SHOULD HAVE BEEN CONSIDERED BY LD. CIT WHILE PASSING ORDER UNDER SECTION 263 IN ORDER TO FIND OUT WHETHER THE ASSESSMENT ORDER WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. 7. IN VIEW OF ABOVE DECISION, REBATE UNDER SECTION 88E WAS TO BE ALLOWED FROM THE TAX COMPUTED AS PER PROVISIONS OF SECTION 115JB TO FIND OUT WHETHER AFTER SET OFF OF REBATE UNDER SECTION 88E, ANY TAX LIABILITY REMAINED OR NOT. ADM ITTEDLY THE TAX LIABILITY AS PER MAT PROVISIONS WAS RS.7,56,694/- AND REBATE ADMISSIBLE UNDER SECTION 88E WAS RS.26,98,260/-. THEREFORE, IN ANY VIEW OF THE MATTER, NO PREJUDICE WAS CAUSED TO THE REVENUE BY NON- CONSIDERATION OF PROVISIONS OF SECTION 115JB BY ASS ESSING OFFICER. THEREFORE, LD. CITS ORDER CANNOT BE SUSTAINED. RESULTANTLY, THE GROUNDS OF AP PEAL TAKEN BY ASSESESE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. . / . / . / . / ' 0. ' 0. ' 0. ' 0. 12 12 12 12 3 3 3 3 1 1 1 1 45 4545 45 ORDER PRONOUNCED IN THE OPEN COURT ON 30/ 12 /201 1. & 6 7 - 30/12/2011. SD/- SD/- [ MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 30/ 12/ 2011 ITA NO. 1108/KOL./2011 5 COPY OF THE ORDER FORWARDED TO: 1. M/S. GANESHYAM SECURITIES (P) LTD., 9, INDIA EXCHAN GE PLACE, 8 TH FLOOR, KOLKATA-1 2 ITO, WARD-6(2), P-7, CHOWRINGHEE SQUARE, KOLKATA-69 3. COMMISSIONER OF INCOME-TAX (APPEALS)- ,KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.