ACIT 4(2), MUMBAI V. VISARIA SECURITIES P. LTD, MUMBAI

ITA 2271/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71096 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 10-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S GHOSH
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 2271/MUM/2012 (ASSESSMENT YEAR: 2008-09) ACIT, CIRCLE 4(2) M/S. VISARIA SECURITIES P. LTD. ROOM NO. 642, 6TH FLOOR 301-A, COMMERCE HOUSE AAYAKAR BHAVAN, M.K. ROAD VS. 140 N.M. ROAD, FORT MUMBAI 400020 MUMBAI 400023 PAN - AAACV7721L APPELLANT RESPONDENT APPELLANT BY: SHRI S. GHOSH RESPONDENT BY: SHRI ANUJ KISNADWALA DATE OF HEARING: 10.09.2013 DATE OF PRONOUNCEMENT: 10.09.2013 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-8, MUMBAI AND IT PERTAINS TO A.Y. 2008-09. 2. THE FOLLOWING GROUNDS WERE URGED BY THE REVENUE: - 1. I) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE REBATE U/S. 88 E FROM THE TAX PAYABLE ON BOOK PROFIT. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING REBATE U/S. 88E WH ILE COMPUTING TAX LIABILITY UNDER THE MAT PROVISION AND IN MAKING THE COMPARISON BETWEEN THE TAX DETERMINED UNDER THE NORMAL PROVISION OF THE I.T. ACT AND PROVISION U/S. 115 JB FOR THE PURPOSE OF DETERMINING APPLICABILITY OF THE PROVISIONS OF S ECTION 115JB ON GROSS BEFORE ALLOWING REBATE U/S. 88E OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINES S OF SHARE BROKING AND ITA NO. 2271/MUM/2012 M/S. VISARIA SECURITIES P. LTD. 2 SHARE TRADING. FOR THE YEAR UNDER CONSIDERATION IT DECLARED TOTAL INCOME OF ` 9,09,97,890/- UNDER THE NORMAL PROVISIONS OF THE AC T AND THE SAME WAS PROCESSED ACCORDINGLY. LATER ON THE CASE WAS SELECT ED FOR SCRUTINY WHEREIN THE AO MADE CERTAIN DISALLOWANCES AND ALSO CALCULAT ED THE TAX LIABILITY UNDER MAT PROVISIONS. HOWEVER, WHILE DECIDING THE T AX LIABILITY THE AO COMPARED THE TAX LIABILITY UNDER THE NORMAL PROVISI ONS AFTER CONSIDERING THE REBATE UNDER SECTION 88E WITH THE TAX LIABILITY UND ER MAT PROVISIONS WITHOUT CONSIDERING THE REBATE UNDER SECTION 88E. BECAUSE O F SUCH CALCULATION THE TAX LIABILITY UNDER MAT PROVISIONS WAS HIGHER THAN THE TAX COMPUTED ON THE INCOME CALCULATED UNDER NORMAL PROVISIONS OF THE I. T. ACT. ACCORDING TO THE ASSESSEE IT WAS ENTITLED TO REBATE UNDER SECTION 88 E EVEN WHILE COMPUTING THE TAX LIABILITY UNDER MAT PROVISIONS AND HENCE AN APPEAL WAS PREFERRED BEFORE THE CIT(A). RELIANCE WAS PLACED UPON VARIOUS DECISIONS OF THE ITAT TO SUBMIT THAT REBATE UNDER SECTION 88E OF THE ACT IS AVAILABLE EVEN WHILE COMPUTING THE TAX UNDER MAT PROVISIONS (115JB OF TH E ACT). 4. THE LEARNED CIT(A) ACCEPTED THE CONTENTIONS OF THE ASSESSEE BY OBSERVING, IN PARA 4.3 OF THE ORDER, AS UNDER: - 4.3 I HAVE CONSIDERED THE CONTENTION OF THE AO AS WELL AS OF THE LD. AR. I FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE H ON'BLE TRIBUNAL. IN THE CASES OF M/S. HORIZON CAPITAL LTD. AND M/S. MBL & CO. LTD. ( SUPRA) , UNDER IDENTICAL FACT THAT THE PRESENT ASSESSEE HAD ALSO MADE PAYMENT OF STT AND ITS TOTAL INCOME INCLUDED INCOME FROM TRAN SACTIONS ON WHICH STT WAS PAID. THE ONLY REASON STATED BY THE AO FOR NOT ALLOWING REBATE U/S. 88E FROM TAX PAYABLE U/S. 115JB OR COMPUTING TAX PA YABLE UNDER NORMAL PROVISIONS AFTER REDUCING THE AMOUNT OF REBATE U/S. 88E FROM SUCH TAX FOR COMPARING THE TAX PAYABLE NORMALLY OR U/S. 115JB AR E THAT STT WAS NOT INCOME TAX AND PROVISIONS OF SECTION 115JB WERE NON -OBSTANTE DEEMING FICTIONS. FURTHER IDENTICAL TO THE CONTENTIONS RAIS ED BY THE APPELLANT, IT WAS SUBMITTED BEFORE THE HON'BLE TRIBUNAL IN THE CASE O F M/S. HORIZON CAPITAL LTD. (SUPRA) , THAT FORM NO. 6 THE FORMAT OF INCOME TAX RETURN PRESCRIBED BY THE DEPARTMENT OF INCOME TAX PROVIDED FOR REBATE U/S. 88E FROM HIGHER OF INCOME TAX UNDER REGULAR PROVISIONS OF THE ACT OR UNDER SECTION 115JB OF THE ACT. THUS, 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 CASES OF M/S. HORIZON CAPITAL LTD. & M/S. MBL & CO. LTD. (SUPRA) , WERE IDENTICAL 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 SUPE RIOR JUDICIAL AUTHORITY IS BINDING FOR DECIDING IDENTICAL ISSUE UNDER IDENTICA L FACTS AND CIRCUMSTANCES. FURTHER, IT HAS BEEN POINTED BY THE APPELLANT THAT SAME ITA NO. 2271/MUM/2012 M/S. VISARIA SECURITIES P. LTD. 3 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 WHICH IT HAS BEEN OBSERVED THAT IT WAS CLEAR FR OM ITR 6 THAT WHERE TAX PAYABLE WORKS OUT UNDER NORMAL PROVISIONS OF ACT OR UNDER MAT U/S. 115JB WHICHEVER IS HIGHER, THE REBAT E U/S. 88E IS TO BE ALLOWED TO THE APPELLANT THAT THERE WAS NO PROHIBIT ION IN CLAIMING REBATE IN RESPECT OF SECURITIES TRANSACTION TAX PAID AGAIN ST INCOME TAX PAYABLE UNDER MAT UNDER PROVISIONS OF SECTION 115JB OF THE INCOME TAX. RESPECTFULLY FOLLOWING THE DECISION IN THE CASES OF M/S. HORIZON CAPITAL LTD. & M/S. MBL & CO. LTD. (SUPRA) , RENDERED BY THE HON'BLE BANGALORE AND DELHI TRIBUNALS RESPECTIVELY, I AM OF THE OPINI ON THAT COMPARISON BETWEEN TAX DETERMINED UNDER NORMAL PROVISIONS OF T HE INCOME TAX ACT AND THAT DETERMINED UNDER SECTION 115JB SHALL BE MA DE FOR THE PURPOSE OF DETERMINING APPLICABILITY OF THE PROVISIONS OF S ECTION 115JB, ON GROSS BASIS BEFORE ALLOWING REBATE U/S 88E FROM THE INCOM E TAX DETERMINED UNDER NORMAL PROVISIONS OF INCOME TAX ACT AND REBAT E U/S 88E WOULD ALSO BE AVAILABLE TO THE ASSESSEE AGAINST THE TAX PAYABL E U/S. 115JB OF THE INCOME TAX ACT. THE APPELLANT SHALL BE REQUIRED TO MAKE PAYMENT OF HIGHER OF THE TWO AMOUNTS. SUCH PROPOSITION IS INEVITABLE FROM THE FORMAT OF THE RETURN OF INCOME (ITR-6) AS PRESCRIBED. THE APPEAL ON THESE GROUNDS IS ALLOWED. 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. AT THE T IME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE STRONGLY RELIED UP ON THE JUDGEMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. HORIZON CAPITAL LTD. 245 CTR (KAR) 601 WHEREIN THE SAME ISSUE WAS DECIDE D IN FAVOUR OF THE ASSESSEE. 6. THE LEARNED D.R. STRONGLY SUPPORTED THE ORDER PASSE D BY THE AO. HE COULD NOT PLACE BEFORE US ANY DECISION OF ANY HIGH COURT/SUPREME COURT WHEREIN A CONTRARY VIEW WAS TAKEN. UNDER THESE CIRC UMSTANCES WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A), O N THIS ISSUE, DOES NOT CALL FOR ANY INTERFERENCE. 7. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT, THE ORDER PASSED BY THE CIT(A) IS AFFIRMED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2013. SD/- SD/- (D. KARUNAKARA RAO) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 10 TH SEPTEMBER, 2013 ITA NO. 2271/MUM/2012 M/S. VISARIA SECURITIES P. LTD. 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) VIII, MUMBAI 4. THE CIT IV, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.