ITO, Ward - 4(3), Kolkata, Kolkata V. Advent Stock Broking Pvt. Ltd., Kolkata

ITA 1276/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54555 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: R TULSIYAN
• Keywords: TDS
• Section: 143(3); 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , ! . '# . ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] $ $ $ $ / I.T.A NO. 1276/KOL/2010 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 INCOME-TAX OFFICER, WD-4(3), KOLKATA VS. ADVENT S TOCK BROKING PVT. LTD. (PAN-AAFCA 5410 Q) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) FOR THE APPELLANT: SHRI S. K. ROY FOR THE RESPONDENT: SHRI R. TULSIYAN . / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF CIT(A), VI, KOLKATA IN APPEAL NO.824/CIT(A)-VI/KOL/CIR-6/08-09 DATED 24.03.2010. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-VI, KOLKATA U/S. 143(3) R.W.S. 115WE(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007- 08 VIDE HIS ORDER DATED 17.12.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DIRECTING THE ASSESSING OFFICER TO COMPUTE TAX ON NORMAL INCOME B EFORE REBATE U/S. 88E OF THE ACT ON BOOK PROFIT FOR APPLYING PROVISIONS OF SECTION 115JB OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THE CIT(A)-VI, HAS ERRED IN LAW IN DIRECTING TO COMPARE TAX ON NORMAL INCOME BEFORE REBATE U/S. 88E WITH 10% OF BOOK PROFIT FOR APPLYIN G SEC. 115JB. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS ARE THAT THE ASSESSEE COMPANY FILED RET URN OF INCOME DECLARING INCOME UNDER NORMAL COMPUTATION AT RS.2,23,83,430/- AND TAX AMOUNTING T O RS.67,00,029/-. THE ASSESSING OFFICER NOTICED THAT UNDER NORMAL COMPUTATION ASSESSEE HAS SET OFF REBATE U/S. 88E OF THE ACT AND AS PER PROVISIONS OF MAT, THIS TAX IS LOWER, ACCORDINGLY, HE CHARGED TAX AS PER PROVISIONS OF MAT U/S. 115JB OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APP EAL BEFORE CIT(A), WHO ALLOWED THE CLAIM OF ASSESSEE BY STATING FACTS AND CIRCUMSTANCES AS U NDER: 2 ITA 1276/K/2010 ADVENT STOCK BROKING PVT. LTD. A.Y .07-08 I HAVE GONE THROUGH THE SUBMISSION MADE BY THE APP ELLANT AND ALSO THE ORDER OF THE A.O. THE PROVISION OF SECTION 115JB COMES INTO PLAY ONLY WHEN TAX PAYABLE UNDER NORMAL COMPUTATION IS LESS THAN 10% OF BOOK PROFIT AND NOT WHEN ANY CREDIT IS GRANTED U/S 88E OF SECURITIES TAX. AS SEEN FROM THE COMPUTA TION OF INCOME TAX, SURCHARGE, EDUCATION CESS AND INTEREST IN RESPECT OF INCOME CH ARGEABLE TO TAX AS PER INSTRUCTION IN THE RETURN FORM -1 FOR ASSESSMENT YEAR 2006-07 IS A S FOLLOWS: A. COMPUTATION OF INCOME TAX PAYABLE ON THE TOTAL INCOME. SPL. RATE OF TAX ARE APPLICABLE TO SOME SPECIFIED ITEMS INTO INCLUD E AGRICULTURE INCOME, AS PRESCRIBED, FOR RATE PURPOSES, IN THE TAX COMPUTAT ION PROCEDURE. B. COMPUTE THE TAX PAYABLE UNDER SECTION 115JB. C. LOWER OF AMOUNTS AT (A) AND (B) WILL BE THE GRO SS TAX LIABILITY. D. DEDUCT REBATE U/S 88E, IF ALLOWABLE, IN RESPECT OF SECURITIES TRANSACTION TAX PAID DURING PREVIOUS YEAR. E. ADD SURCHARGE AS PRESCRIBED BY LAW ON THE ABOVE TAX PAYABLE (AFTER REBATE) F. ADD EDUCATION CESS AS PRESCRIBED ON THE TAX PAY ABLE (AFTER REBATE) + SURCHARGE. - G. CLAIM RELIEF (S) AS PRESCRIBED BY THE LAW ON AC COUNT OF DOUBLE TAXATION AND CALCULATE BALANCE TAX AND SURCHARGE PAYABLE. ADD I NTEREST PAYABLE AS PRESCRIBED BY THE LAW TO REACH TOTAL TAX SURCHARGE AND INTEREST PAYABLE. H. DEDUCT THE AMOUNT OF PREPAID TAXES, IF ANY LIKE TDS, TAX COLLECTED AT SOURCE, ADVANCE TAX AND SELF ASSESSMENT TAX. THE RESULT WIL L BE TAX PAYABLE (OR REFUNDABLE). PART B OF THE I.T. RETURN FORM FOR THAT YEAR ALSO SHOWS THE FOLLOWING: PART-B COMPUTATION OF INCOME AND TAX THEREON 1. INCOME FROM HOUSE PROPERTY (SCH.4(12) OR SCH. 7(1)(V) 2.(A) INCOME FROM BUSINESS OR PROFESSION [SCH.1(23 ) OR SCH.7(2)(V)] (B) PROFITS AND GAINS FROM TRANSACTIONS CHARGEABL E TO SECURITIES TRANSITION TAX INCLUDED IN (A) ABOVE [SCH. 14(1)(III)] 3. CAPITAL GAINS (A) SHORT-TERM (UNDER SECTION 111A [SCH.2(8)] (B) SHORT-TERM (OTHERS) [SCH.2 (9)] (C ) TOTAL SHORT-TERM [SCH.(7) OR SCH.7(3) (V)] (D) LONG-TERM [SCH.2 (20) OR SCH.7 (4) (V)] (E) TOTAL CAPITAL GAINS [(C) + (D)] 4. INCOME FROM OTHER SOURCES [SCH.5(8) OR SCH.7 (5) (V)] 5. GROSS TOTAL INCOME [(1) + (2)+(3)(E) + (4)] 6.DE DUCTIONS UNDER CHAPTER VL-A(SCH.L0) 7. TOTAL INCOME [(5) (6)] 8. NET AGRICULTURE INCOME/ANY OTHER INCOME FOR RATE PURPOSES (SCH.11) 9. TAX PAYABLE ON TOTAL INCOME (A) AT NORMAL RATES (B) AT SPECIAL RATES (C)TOTAL [(A)+(B)] L0. TAX PAYABLE UNDER SECTION 115JB (SCH.15) 11. NET TAX PAYABLE, HIGHER OR [(9) (C) OR (10)] 12. REBATE UNDER SECTION 88E (SCH.14) (SCH. 14) 13. NET TAX PAYABLE [(11). (12) 3 ITA 1276/K/2010 ADVENT STOCK BROKING PVT. LTD. A.Y .07-08 14 SURCHARGE ON (13). 15. EDUCATION CESS ON [(13) + (14)] IN MY OPINION THE TAX PAYABLE REFERRED IN SECTION 1 15JB IS GROSS TAX PAYABLE AND NOT THE TAX AFTER REBATE UNDER THE OTHER PROVISIONS. THE PROVIS ION OF MAT SHOULD BE APPLIED IF AND ONLY IF EFFECTIVE TAX PAYABLE TO GOVT. IS LESS THAN SPECIFI ED % OF BOOK PROFIT. AS SEEN FROM THE PART B OF THE COMPUTATION OF INCOME AND ALSO FROM THE INST RUCTION IN THE RETURN FORM (I) FOR ASSESSMENT YEAR 2006-07 THE COMPARISON IS BETWEEN TAX PAYABLE ON THE TOTAL INCOME AND THE TAX PAYABLE U/S 115JB, THAN ONLY THE REBATE U/S 88E COMES INTO PLAY. IN VIEW OF THIS I AGREE WITH THE SUBMISSIONS OF THE APPELLANT AND THE TAX PAYABLE ON THE INCOME COMPUTED UNDER NORMAL PROVISION IS MUCH GREATER THAN 10% OF THE BOOK PROF IT AND THEREFORE, THE PROVISION OF SECTION 115IB DOES NOT APPLY. THIS GROUND OF APPEAL IS ALLO WED. 4. WE FIND THAT IN PRESENT ASSESSMENT YEAR PROVISIO NS OF SECTION 115JB OF THE ACT PROVIDES FOR A MINIMUM ALTERNATE TAX FOR COMPANIES UNDER THI S PROVISION AND COMPANY IS REQUIRED TO PAY AT LEAST 10% OF ITS BOOK PROFIT AS CORPORATE TAX AN D IN CASE TAX LIABILITY OF A COMPANY UNDER REGULAR PROVISION IS MORE THAN THIS AMOUNT THE PROV ISION OF MAT WILL NOT APPLY AND COMPANY WILL PAY CORPORATE TAX AS PER REGULAR SCHEME. SIMU LTANEOUSLY, THE ASSESSEE IS ELIGIBLE FOR REBATE U/S. 88E(1) OF THE ACT AS IS AVAILABLE TO ASSESSEE WHOSE TOTAL INCOME IN PREVIOUS YEAR INCLUDES ANY INCOME CHARGEABLE UNDER THE HEAD PROFITS AND G AINS OF BUSINESS OR PROFESSION ARISING FROM TAXABLE SECURITIES UNDER SUB-SECTION (2) OF S ECTION 88E OF THE ACT AN ASSESSEE IS ELIGIBLE FOR DEDUCTION FROM THE AMOUNT OF INCOME TAX ON SUCH INCOME ARISING FROM SECURITIES FROM SUCH TRANSACTIONS COMPUTED IN THE MANNER PROVIDED IN SEC TION 88E(2) OF THE ACT OF AN AMOUNT EQUAL TO SECURITIES TRANSACTION TAX PAID BY HIM IN RESPEC T OF TAXABLE SECURITIES TRANSACTION ENTERED INTO IN THE COURSE OF HIS BUSINESS DURING THE RELEVANT P REVIOUS YEAR. IT MEANS THAT IN CASE THE ASSESSEES INCOME UNDER NORMAL PROVISIONS IS MORE T HAN 10% OF BOOK PROFIT, AS IS IN THE PRESENT CASE, MAT PROVISION U/S. 115JB OF THE ACT WILL NOT APPLY. IN OUR VIEW, THE TAX PAYABLE AS REFERRED TO IN SECTION 115JB OF THE ACT IS GROSS TA X PAYABLE AND NOT THE TAX AFTER REBATE UNDER OTHER PROVISIONS OF THE ACT. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE TAX PAYABLE ON THE INCOME COMPUTED UNDER NORMAL PROVISIONS, IN THE CAS E OF THE ASSESSEE, IS MUCH GREATER THAN 10% OF BOOK PROFIT AND, THEREFORE, THE FINDINGS OF CIT(A) ARE CLEARLY WITHIN THE PROVISIONS OF THE ACT. APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, REVENUE APPEAL IS DISMISSED. 6. ORDER PRONOUNCED IN OPEN COURT ON 09.09.2011. SD/- SD/- . '# '#'# '# . ! , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( #! #! #! #!) )) ) DATED : 9 TH DAY OF SEPTEMBER, 2011 4 ITA 1276/K/2010 ADVENT STOCK BROKING PVT. LTD. A.Y .07-08 /0 %12 3 JD.(SR.P.S.) . 4 ,5 6 5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT ITO, WARD-4(3), KOLKATA. 2 ,-*+ / RESPONDENT, ADVENT STOCK BROKING PVT. LTD., 1, R. N. MUKHERJEE ROAD, MARTIN BURN BUILDING, 4 TH FLOOR, ROOM NO. 64, KOLKATA-700 001. 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA 5 . >? ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, .%@/ BY ORDER, 2 /ASSTT. REGISTRAR .