ADDL CIT RG 4(3), MUMBAI V. KAUSHIK SHAH SHARES & SECURITIES P. LTD, MUMBAI

ITA 2163/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4223 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Assessee Lawyers: JINESH DOSHI
• Section: 115JB; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO.2163/MUM/2012 ASSESSMENT YEAR : (08-09) DCIT 4(3) 6 TH FLOOR, ROOM NO.649 AAYAKAR BHAVAN MUMBAI-400 020. VS. M/S. K AUSHIK SHAH SHARES & SECURITIES PVT. LTD. 501/502, HERITAGE PLAZA A-WING, NITANAND NAGAR, 28/29, TELLIGULY CROSS ROAD ANDHERI EAST MUMBAI-400 069. PAN NO.AAACK 1702 C (APPELLANT) (RESP ONDENT) ASSESSEE BY : SHRI JINESH DOSHI REVENUE BY : SHRI SURINDER JIT SINGH DATE OF HEARING : 04.07.2013 DATE OF PRONOUNCEMENT : 10 .07.2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS A REVENUE APPEAL AGAINST THE ORDER OF CIT(A )-8 MUMBAI DATED 11.01.12. THE REVENUE HAS RAISED THE FOLLOWIN G TWO GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE REBATE U/S. 88E FR OM THE TAX PAYABLE ON BOOK PROFIT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING REBATE U/S. 88E WHILE COMPUTING TAX LIABILITY UNDER THE MAT PROVISION AND IN MAKING THE COMPARISON BETWEEN THE TAX DETERMINED UNDER NORMAL PROVISION O F THE I.T. ACT ITA NO.2163/M/12 A.Y.08-09 M/S. KAUSHIK S HAH SHARES & SECURITIES PVT. LTD. 2 AND PROVISIONS U/S. 115JB ON GROSS BEFORE ALLOWING REBATE U/S. 88E OF THE INCOME TAX ACT, 1961. WE HAVE HEARD THE LD. DR AND THE LD. COUNSEL. 2. THE ISSUE IN THE PRESENT APPEAL IS WITH REFERENC E TO GIVING CREDIT FOR THE STT PAID UNDER SECTION 88E WHILE INVOKING THE P ROVISIONS OF SECTION 115JB. THIS GROUND OF APPEAL IS AGAINST AOS FINDIN G THAT THE TAX LIABILITY U/S. 115JB OF THE INCOME TAX ACT WAS HIGHER THAN TH E NORMAL TAX, HOLDING THAT THE ASSESSEE WAS LIABLE TO PAY U/S. 11 5JB INSTEAD OF NORMAL TAX BY NOT ALLOWING CREDIT OF SECURITIES TRANSACTIO N TAX FROM TAX PAYABLE U/S. 115JB. THE RELEVANT FACTS APPEARING FROM THE A SSESSMENT ORDER ARE THAT THE ASSESSEE HAD MADE THE PAYMENT OF TAX UNDER NORMAL PROVISIONS BY COMPARING ITS TOTAL INCOME WITH INCOME U/S. 115J B BEFORE CLAIMING REBATE U/S. 88E. UPON QUERY BY AO AS TO WHY TOTAL I NCOME AFTER GRANTING REBATE U/S.8E BE NOT COMPARED WITH INCOME U/S. 115J B, THE APPELLANT MADE ELABORATE SUBMISSIONS POINTING OUT THAT TAX RE BATE IS A STEP WHICH COMES AFTER DETERMINING INCOME TAX PAYABLE ON TOTAL INCOME COMPUTED AS PER APPLICABLE PROVISIONS INCLUDING MAT, THEREFO RE, THE COMPARISON U/S. 115JB IS BETWEEN INCOME TAX PAYABLE ON TOTAL I NCOME AND 10% OF THE BOOK PROFIT, POINTING OUT THAT SUCH VIEW WAS SU PPORTED BY THE INCOME TAX RETURN (ITR-6) PRESCRIBED BY CBDT WHEREIN THE G ROSS TAX LIABILITY BEFORE CLAIM OF REBATE U/S. 88E IS FIRST TO BE COMP ARED WITH TAX CREDIT UNDER MAT AND THEN FROM THE HIGHER OF THE MAT LIABI LITY AND TAX LIABILITY UNDER NORMAL PROVISIONS OF THE ACT, THE TAX REBATE U/S. 88E IS TO BE REDUCED TO ARRIVE AT A FINAL TAX PAYABLE BY THE ASS ESSEE . SUCH CONTENTION OF THE ASSESSEE DID NOT FIND FAVOUR WITH AO WHO ENT ERTAINED A VIEW THAT PROVISION OF SECTION 115J ARE TO ENSURE COLLECTION OF TAX WHERE THE TAX LIABILITY UNDER NORMAL PROVISIONS OF THE ACT WAS MU CH LESS. PLACING RELIANCE UPON CIRCULAR NO.13 OF 2001 DATED 09.01.20 01 ISSUED BY CBDT, THE AO HAS ARGUED THAT THE INCOME TAX AS PER SECTIO N 115JB SHALL BE @10% OF THE BOOK PROFIT IF THE INCOME TAX PAYABLE O N TOTAL INCOME AS ITA NO.2163/M/12 A.Y.08-09 M/S. KAUSHIK S HAH SHARES & SECURITIES PVT. LTD. 3 COMPUTED UNDER THE ACT WAS LESS THAN 10% OF THE BOO K PROFIT. AO ALSO HELD THAT THE REBATE U/S. 88E IS AKIN TO THOSE IN R ESPECT OF LIP/PF. 2.1 THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) TH AT PAYMENT UNDER SECTION 88E IS ALSO TO BE ALLOWED WHILE WORKING OUT TAX LIABILITY UNDER SECTION 115JB FOR THE PURPOSE OF DETERMINING THE TA XABILITY UNDER SECTION 115 JB. IN SUPPORT THE ASSESSEE RELIED ON THE DECIS ION IN THE CASE OF M/S. HORIZON CAPITAL LTD. OF ITAT BANGALORE AND ALS O IN THE CASE OF NAMAN SECURITIES FINANCE PVT. LTD. OF MUMBAI BENC H. THE LD. CIT(A) CONSIDERED THE CONTENTIONS OF THE ASSESSEE AND ALLO WED THE CLAIM OF THE ASSESSEE BY STATING AS UNDER :- I HAVE CONSIDERED THE CONTENTION OF AO AS WELL AS OF THE LD. AR . I FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE H ONBLE TRIBUNAL IN THE CASE OF M/S HORIZON CAPITAL TD. AND M/S. MBL & CO. LTD. (SUPRA), UNDER IDENTICAL FACT THAT THE PRESENT ASSE SSEE HAD ALSO MADE PAYMENT TO STT AND ITS TOTAL INCOME INCLUDED INCOME FROM TRANSACTIONS ON WHICH STT WAS PAID. THE ONLY REASON S STATED BY AO FOR NOT ALLOWING REBATE U/S. 88E FROM TAX PAYABLE U /S. 115JB OR COMPUTING TAX PAYABLE UNDER NORMAL PROVISIONS AFTER REDUCING THE AMOUNT OF REBATE U/S. 88E FROM SUCH TAX FOR COMPARI NG THE TAX PAYABLE NORMALLY OR U/S. 115JB ARE THAT STT WAS NOT INCOME TAX AND PROVISIONS OF SECTION 115JB WERE NON-OBSTANTE D EEMING FICTIONS. FURTHER IDENTICAL TO THE CONTENTIONS RAISED BY THE APPELLANT, IT WAS SUBMITTED BEFORE THE HONBLE TRIBUNAL IN THE CASE O F M/S. HORIZON CAPITAL LTD. 9SUPRA), THAT FORM NO.6THE FORMAT OF I NCOME TAX RETURN PRESCRIBED BY THE DEPARTMENT OF INCOME TAX PROVIDED FOR REBATE U/S. 88E FROM HIGHER OF INCOME TAX UNDER REGULAR PROVISI ONS OF THE ACT OR UNDER SECTION 115JB OF THE ACT. I FIND THAT THE REL EVANT FACTS AND CIRCUMSTANCES AS WELL AS THE STATEMENTS AND ARGUMEN TS OF BOTH THE ASSESSEE AND THE DEPARTMENT IN THE CASE OF M/S. HOR IZON CAPITAL LTD. AND M/S. MBL & COMPANY LTD.(SUPRA), WERE IDENT ICAL TO THOSE IN THE INSTANT CASE OF THE APPELLANT. THE DECISION IN THE CASE OF M/S. HORIZON CAPITAL LTD. & M/S. MBL & CO. LTD. (SUPRA) THEREFORE, ARE CLEARLY APPLICABLE IN THE INSTANT CASE WHICH BEING THE DECISION OF A SUPERIOR AUTHORITY IS BINDING FOR DECIDING IDENTICA L ISSUE UNDER IDENTICAL FACTS AND CIRCUMSTANCES. FURTHER, IT HAS BEEN POINTED BY THE APPELLANT THAT SAME VIEW HAS BEEN PRONOUNCED IN ORDER DATED 02.07.2010 IN APPEAL NO.CIT(A)-41/ACCC-37/IT-601/09 -10 IN THE NAME OF NAMAN SECURITIES & FINANCE PVT. LTD. IN WHI CH IT HAS BEEN ITA NO.2163/M/12 A.Y.08-09 M/S. KAUSHIK S HAH SHARES & SECURITIES PVT. LTD. 4 OBSERVED THAT IT WAS CLEAR FROM ITR 6 THAT WHERE TA X PAYABLE WORKS OUT UNDER NORMAL PROVISIONS OF ACT OR UNDER MAT U/S . 115JB WHICHEVER IS HIGHER, THE REBATE U/S.88E IS TO BE AL LOWED TO THE APPELLANT THAT THERE WAS NO PROHIBITION IN CLAIMING REBATE IN RESPECT OF SECURITIES TRANSACTIONS TAX PAID AGAINST INCOME TAX PAYABLE UNDER MAT UNDER PROVISIONS OF SECTION 115JB OF THE INCOME TAX. RESPECTFULLY FOLLOWING THE DECISIONS IN THE CASE OF M/S. HORIZON CAPITA LTD. AND M/S. MBL & CO. LTD. (SUPRA), RENDER ED BY THE HONBLE BANGALORE AND DELHI TRIBUNALS RESPECTIVELY , I AM OF THE OPINION THAT COMPARISON BETWEEN TAX DETERMINED UNDE R NORMAL PROVISIONS OF THE INCOME TAX ACT AND THAT DETERMINE D U/S. 115JB SHALL BE MADE FOR THE PURPOSE OF DETERMINING APPLIC ABILITY OF THE PROVISIONS OF SECTION 115JB, ON GROSS BASIS ALLOWIN G REBATE U/S. 88E FROM THE INCOME TAX DETERMINED UNDER NORMAL PROVISI ONS OF INCOME TAX ACT AND REBATE U/S. 88E WOULD ALSO BE AVAILABLE TO THE ASSESSEE AGAINST THE TAX PAYABLE U/S. 115JB OF THE INCOME TA X ACT. THE APPELLANT SHALL BE REQUIRED TO MAKE PAYMENT OF HIGH ER OF THE AMOUNTS. SUCH PROPOSITION IS INEVITABLE FROM THE FO RMAT OF THE RETURN OF INCOME ITR-6 AS PRESCRIBED. THE APPEAL ON THIS G ROUND IS ALLOWED. 3. BEFORE US, BOTH THE COUNSELS FAIRLY ADMITTED THA T THIS ISSUE IS NOW CRYSTALLIZED BY THE DECISION OF THE HON'BLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. M/S. HORIZON CAPITAL LTD. IN ITA N O.434 OF 2010 DATED 24.10.2011 AND ALSO BY OTHER CO-ORDINATE BENCH DECI SIONS ON THE ISSUE NAMELY IN THE CASE OF : (I) AMBIT SECURITIES BROKING P. LTD. VS. ADCIT IN ITA NO.7856/M/2011 FOR (AY 08-09) ORDER DATED 06.06.201 3, (II) DY. CIT VS. ARCADIA SHARE & STOCK BROKERS PVT. LTD . IN ITA NO.1515/M/2012 FOR (AY 08-09) ORDER DATED 20.03.201 3.; (III) M/S. AMBIT SECURITIES BROKING P. LTD. VS. ADD L. CIT IN ITA NO.7856/M/2011 FOR (AY 08-09) ORDER DATED 06.02.201 3; AND (IV) SVS SECURITIES PVT. LTD. IN ITA NO.6149/M/2011 FOR (AY 08-09) ORDER DATED 08.08.2012 3.1 SINCE THE LD. CIT(A) FOLLOWED THE DECISION OF T HE CO-ORDINATE BENCH IN THE CASE OF HARIZON CAPITAL LTD. WHICH WAS CONFI RMED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE REFERRED SUPRA, A ND ALSO OTHER CO- ORDINATE BENCH DECISION IN THE CASE OF NAMAN SECUR ITIES FINANCE PVT. ITA NO.2163/M/12 A.Y.08-09 M/S. KAUSHIK S HAH SHARES & SECURITIES PVT. LTD. 5 LTD. WHICH IN TURN IS BEING FOLLOWED BY OTHER COORD INATE BENCHES, WE DO NOT SEE ANY MERIT IN THE GROUNDS RAISED BY THE REVE NUE. 4. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY 2013. SD/- SD/- (VIVEK VARMA) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 10 TH JULY, 2013. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.