The ACIT, (OSD)Circle-8, Ahmedabad V. S.K. Stock Broking Pvt.Ltd,., Ahmedabad

ITA 1882/AHD/2011

• Counselvise Citation: 188220514 RSA 2011
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N SOPARKAR
• Assessee Lawyers: ALOK JOHN
• Keywords: Question of law
• Section: 115JB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.1074 / AHD/2011 (ASSESSMENT YEAR 2006-07) S K STOCK BROKING PVT. LTD., C-183, KAMDHENU COMPLEX, PANJARA POLE, AMBAWADI, AHMEDABAD VS. CIT IV, AHMEDABAD I.T.A.NO. 1882/AHD/2011 (ASSESSMENT YEAR 2008-09) ACIT (OSD), CIRCLE 8, VS. S K STOCK BROKING P. LTD ., AHMEDABAD C-183, KAMDHENU COMPLEX, OPP. SAHAJANAND COLLEGE, AMBAWADI, AHMEDABAD PAN/GIR NO. : AAECS9201J (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI S N SOPARKAR, SR. ADV. RESPONDENT BY: SHRI ALOK JOHN, CIT DR DATE OF HEARING: 16.12.2011 DATE OF PRONOUNCEMENT: 31.01.2012 O R D E R PER SHRI A. K. GARODIA, AM:- OUT OF THESE TWO APPEALS, ONE APPEAL IS FILED BY T HE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 WHICH IS DIRECTED AGAINST T HE ORDER PASSED BY CIT IV, AHMEDABAD U/S 263 ON 15.03.2011 AND THE SEC OND APPEAL IS FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2008-09 WHIC H IS DIRECTED AGAINST THE ORDER OF CIT(A) XIV, AHMEDABAD DATED 27.05.2011 . SINCE, THE ISSUE INVOLVED IN BOTH THESE APPEALS IS THE SAME, BOTH TH ESE APPEALS WERE HEARD I.T.A.NO.1074,1882 /AHD/2011 2 TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THESE CASES, THE ISSUE INVOLVED IS, AS T O WHETHER THE ASSESSEE IS ELIGIBLE FOR REBATE U/S 88E AGAINST THE TAX PAYA BLE BY THE ASSESSEE AS PER THE PROVISIONS OF SECTION 115JB OF THE INCOME TAX A CT, 1961. 3. IN ASSESSMENT YEAR 2006-07, IN THE PROCEEDINGS B EFORE LD. CIT U/S 263, RELIANCE WAS PLACED BY THE ASSESSEE ON THE DEC ISION OF BANGALORE BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF HORIZ ON CAPITAL LTD. VS ITO IN I.T.A.NO. 592(BNG)/10 DATED 16.10.2010. IN THAT CASE, IT WAS HELD BY THE TRIBUNAL THAT THE PROVISION OF SECTION 87, 88A, 88B, 88C AND 88E ALSO APPLY AFTER THE TOTAL INCOME IS COMPUTED U /S 115JB BUT LD. CIT WAS NOT SATISFIED AND HE DIRECTED THE A.O. TO RECOM PUTE THE INCOME BY INVOKING THE PROVISIONS OF SECTION 115JB. IN ASSES SMENT YEAR 2008-09, LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY FO LLOWING THE SAME TRIBUNAL DECISION OF BANGALORE BENCH RENDERED IN TH E CASE OF HORIZON CAPITAL LTD. (SUPRA). HE ALSO FOLLOWED ANOTHER TRI BUNAL DECISION OF MUMBAI BENCH RENDERED IN THE CASE OF HINDUSTAN CONS TRUCTION CO. VS DCIT AS REPORTED IN 25 SOT 359. IN THIS YEAR, THE REVENUE IS IN APPEAL BEFORE US. 4. LD. D.R. OF THE REVENUE SUPPORTED THE ORDER OF C IT PASSED BY HIM U/S 263 IN ASSESSMENT YEAR 2006-07 WHEREAS LD. A.R. SUPPORTED THE ORDER OF CIT(A) PASSED BY HIM IN ASSESSMENT YEAR 2008-09. HE ALSO SUBMITTED THAT THE DECISION OF BANGALORE BENCH OF THE TRIBUNA L RENDERED IN THE CASE OF HORIZON CAPITAL LTD. (SUPRA) HAS BEEN UPHELD BY HONBLE KARNATAKA HIGH COURT IN I.T.A.NO. 434/2010 AS PER THE JUDGEME NT DATED 24.10.2011 AND HE SUBMITTED A COPY OF THIS JUDGMENT OF HONBLE KARNATAKA HIGH COURT. IN REPLY, IT WAS SUBMITTED BY THE LD. D.R. THAT AS PER THE JUDGMENT I.T.A.NO.1074,1882 /AHD/2011 3 OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE O F M J BOSE & CO. (P) LTD. AS REPORTED IN 321 ITR 132 WHEREIN, IT WAS HELD THAT ASSESSMENT U/S 115J ON, THE BOOK PROFIT IS A SELF CONTAINED CO DE. HE PLACED RELIANCE ON THE TRIBUNAL DECISION OF MUMBAI BENCH RENDERED I N THE CASE OF SHREE SATYANARAYAN INVESTMENT CO. LTD. VS ITO (2007) 17 S OT 303 (MUM.) IN WHICH THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HON BLE APEX COURT RENDERED IN THE CASE OF APOLLO TYRES AS REPORTED IN 255 ITR 273. HE POINTED OUT THAT IT WAS HELD BY THE TRIBUNAL IN THA T CASE THAT THE A.O. HAS TO CHARGE INCOME TAX AT THE PRESCRIBED RATE IN RESP ECT OF THE TOTAL INCOME COMPUTED U/S 115JA AND THE A.O. HAS NO JURISDICTION TO LEVY TAX PRESCRIBED FOR A SPECIFIC HEAD OF INCOME WHILE COMP UTING TAX U/S 115JA. HE ALSO PLACED RELIANCE ON ANOTHER TRIBUNAL DECISIO N OF MUMBAI BENCH RENDERED IN THE CASE OF RSDV FINANCE CO. P. LTD. VS CIT AS REPORTED IN 66 ITD 378 WHEREIN, IT WAS HELD BY THE TRIBUNAL THA T THE PROVISIONS OF SECTION 115JA ARE SPECIFIC PROVISIONS WHICH OVERRID E OTHER PROVISIONS OF INCOME TAX TO THE EXTENT MENTIONED THEREIN. HE ALS O PLACED RELIANCE ON THE DECISION OF DELHI BENCH OF THE TRIBUNAL RENDERE D IN THE CASE OF GROWTH AVENUE SECURITIES P. LTD. VS DCIT AS REPORT ED IN 1 ITR 807 (DEL.) WHEREIN, IT WAS HELD THAT EVEN IF THE ASSESS EE HAS MADE INVESTMENT IN SPECIFIED SCHEME AS CONTEMPLATED U/S 54EC, IT IS NOT CORRECT TO SAY THAT IT HAS TO BE REDUCED FORM THE NET PROFIT FOR THE PU RPOSE OF COMPUTATION OF BOOK PROFITS U/S 115JB BECAUSE EXPLANATION TO SECTI ON 115JB DOES NOT PROVIDE FOR ANY DEDUCTION IN TERMS OF SECTION 54EC. HE SUBMITTED THAT HONBLE KARNATAKA HIGH COURT FAILED TO CONSIDER THE SE ISSUES IN THE CASE OF CIT VS HORIZON CAPITAL LTD. AS PER JUDGEMENT DAT ED 24.10.2011 IN I.T.A.NO. 434/10 AND THIS JUDGMENT SHOULD NOT BE FO LLOWED IN THE PRESENT CASE. I.T.A.NO.1074,1882 /AHD/2011 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENTS CITED BY BOTH THE SIDES. FIRST WE CONSI DER THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F CIT VS HORIZON CAPITAL LTD. WE FIND THAT PARA 16 & 17 OF THIS JUD GEMENT OF KARNATAKA HIGH COURT ARE RELEVANT AND HENCE, WE REPRODUCE THE SAME HEREIN BELOW: 16. THEREFORE, IT IS CLEAR THAT THE ASSESSEE IS LI ABLE TO PAY SECURITIES TRANSACTION TAX WHEN HE ENTERS INTO SECURITIES TRAN SACTION. TAX IS PAYABLE SIMULTANEOUSLY AFTER REALIZING THE CONSIDER ATION. HOWEVER,, IF THAT TRANSACTION IS INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE WHERE THE TOTAL INCOME IS ASSESSED ETHER UNDER THE PROVISIONS OF THE ACT OR UNDER SECTION 11516 WHEN TAX CHARGEABLE ON S UCH INCOME IS ARRIVED AT, HE IS GIVEN THE BENEFIT OF TAX DEDUCTIO NS OF THE AMOUNT, WHICH HE HAS PAID UNDER SECTION 88F BY VIRTUE OF SE CTION 87. WHEN UNDER SECTION 82A, THE ASSESSEE IS MADE LIABLE TO P AY TAX WITH AN ASSURANCE THAT IT WILL BE DEDUCTED AND 87 OF THE AC T GIVES EFFECT TO SUCH PROMISE MADE UNDER THE STATUTE. THAT IS THE REASON WHY THE WORD USED IS REBATE. THE AMOUNT PAID IS HANDED BACK TO THE ASSESSES. IN OTHER WORDS, PAYMENT OF TAX TWICE ON T HE SAME INCOME IS AVOIDED, 17. THEREFORE, THE CONTENTION THAT THIS BENEFIT IS NOT AVAILABLE TO THE ASSESSEE WHOSE TOTAL INCOME IS A SSESSED UNDER SECTION 115JB HAS NO SUBSTANCE, IN OTHER WORDS, WHEN THE TOTAL INCOME IS ASSESSED AND THE TAX CHARGEABLE IS COMPUTED, IT IS FROM THAT TAX WHICH IS CHARGEABLE, THE TAX PAID UNDER SECTION 88E IS GIVEN DEDUCTION, BY WAY OF REB ATE, UNDER SECTION 87 OF THE ACT. THIS IS THE LEGISLATIVE INTE NT. THAT IS A PROMISE TO GIVE DEDUCTION OF THE TAX ALREADY PAID. THIS IS THE MODE IN WHICH TAX ALREADY PAID IS HANDED BACK AT TH E TIME OF FINAL COMPUTATION. THEREFORE, THE JUDGMENT REFERRED BY THE TRIBUNAL IS STRICTLY IN ACCORDANCE WITH LAW AND DOES NOT SU FFER FROM ANY LEGAL INFIRMITY, WHICH CALLED FOR INTE RFERENCE. WE DO NOT SEE ANY SUBSTANTIAL QUESTION OF LAW INVOLVED IN HIS APPEAL, WHICH MERITS ADMISSION. THE APPEAL IS DISMISSED. 6. FROM THE ABOVE DECISION OF HONBLE KARNATAKA HIG H COURT, WE FIND THAT THIS ISSUE INVOLVED IN THE PRESENT TWO CA SES, IS SQUARELY COVERED I.T.A.NO.1074,1882 /AHD/2011 5 IN FAVOUR OF THE ASSESSEE BY THIS JUDGEMENT OF HON BLE KARNATAKA HIGH COURT AND NO CONTRARY DECISION ON THIS ISSUE HAD BE EN BROUGHT TO OUR NOTICE BY THE LD. D.R. OF THE REVENUE. REGARDING V ARIOUS DECISIONS CITED BY LD. D.R., IT IS CONTENDED THAT THIS JUDGMENT OF HONBLE KARNATAKA HIGH COURT IS NOT CORRECT LAW, BUT IN NONE OF THESE JUDGMENTS CITED BY LD. D.R., THE ISSUE INVOLVED WAS REGARDING REBATE U/S 8 8E AS IN THE PRESENT CASE AND THE ISSUE BEFORE THE HONBLE KARNATAKA HIG H COURT WAS THE SAME I.E. ALLOWABILITY OF REBATE U/S 88E AGAINST THE MAT PAYABLE BY THE ASSESSEE U/S 115JB AND HENCE, IN THE PRESENT CASE, THE ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF HONBLE KARNATAKA HIGH C OURT AND IN THE ABSENCE OF ANY CONTRARY DECISION OF ANY HIGH COURT OR HONBLE SUPREME COURT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESS EE BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HONBLE KARNATAKA HIGH C OURT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ASS ESSMENT YEAR 2006-07 IS ALLOWED WHEREAS THE APPEAL OF THE REVENUE FOR TH E ASSESSMENT YEAR 2008-09 IS DISMISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.1074,1882 /AHD/2011 6 1. DATE OF DICTATION 24.01 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/01OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/01 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/01 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/01/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .