ACIT, New Delhi V. M/s. Multiplex Capital Ltd., Delhi

ITA 4113/DEL/2010

• Counselvise Citation: 411320114 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 21-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REENA S PURI; SRUJANI MOHANTY SENIO
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4113/DEL./2010 (ASSESSMENT YEAR : 2007-08) ACIT, CIRCLE 5 (1), VS. M/S. MULTIPLEX CAPITAL L IMITED, NEW DELHI. 100/28, KESHAV TOWER, RAJAPUR MARKET, SECTOR 9, ROHINI, DELHI-110 085. (PAN : AAACM1761B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY WADHWA, ADVOCATE REVENUE BY : SMT. REENA S. PURI, CIT DR AND SMT. SRUJANI MOHANTY, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES OUT OF THE ORDER OF CIT (APPEALS)-VIII, NEW DELHI DATED 25.06.2010 FOR THE ASSESSMENT YEAR 2007- 08. THE GROUNDS OF APPEAL READ AS UNDER :- 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS ERRON EOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN DIRECTI NG THE A.O NOT TO CHARGE TAX U/S 115JB OF THE I.T. ACT AT BOOK PROFIT OF RS.3,48,42,560/-. ITA NO.4113/DEL./2010 2 2.1 THE LD. CIT (A) IGNORED THE FINDINGS RECORDED B Y THE A.O AND THE FACT THAT THE REBATE U/S 88E OF THE I.T. AC T IS NOT ALLOWABLE ON BOOK PROFIT. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF H EARING. 2. THE ASSESSEE IS A REGISTERED BROKER UNDER SEBI A ND HAVING MEMBERSHIP OF NSE, NSE FUTURE & OPTION AND NSDL DEPOSITORY. T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN SHARES. THE RETURN WAS PROCESSED UNDER SECTION 143(1) ON 03.03.2009. THE SCRUTINY ASSESSM ENT UNDER SECTION 143(3) WAS MADE ON 25.11.2009. 3. AT THE OUTSET OF THE HEARING, THE LEARNED AR SUB MITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT, DELHI BENCH E IN THE CASE OF DCIT VS. M/S. MBL & CO. LTD. IN ITA NO.2478/DEL/2010 VIDE OR DER DATED 21.04.2011. HE FURTHER PLEADED THAT THE PRESCRIBED FORM FOR FIL ING THE RETURN OF INCOME PROVIDES THAT THE REBATE UNDER SECTION 80E IS ALLOW ABLE FOR COMPUTATION OF TAX LIABILITY. PART B TTI OF RETURN, WHICH IS AVAILA BLE AT PAGE 39 OF THE PAPER BOOK PLACED ON RECORD, CLEARLY SHOWS THAT REBATE UN DER SECTION 88E IS AVAILABLE ON TAX PAYABLE ON DEEMED TOTAL INCOME U/S 115JB. 4. WE HAVE HEARD BOTH THE SIDES AND AFTER HEARING B OTH THE SIDES, WE HOLD THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT, DELHI BENCH E IN THE CASE OF DCIT VS. M/S. MBL & CO. LTD., CITED SUPRA. ITAT HAS DECIDED THE ISSUED BY RELYING ON THE DECISION OF ITAT, BANGALORE A B ENCH IN THE CASE OF M/S. ITA NO.4113/DEL./2010 3 HORIZON CAPITAL LTD. VS. ITO IN ITA NO.592/(BHG)/10 DATED 16.07.2010 AND IN THIS ORDER, THE ITAT, BANGALORE A BENCH HAS HE LD AS UNDER :- 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT THE ONLY DISPUTE IS WHETHER THE REBATE OF STT PAID BY THE ASSESSEE IS ALLOWABLE FRO M THE INCOME TAX COMPUTED AGAINST THE TOTAL INCOME COMPUT ED UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. THE TERM 'TOTAL INCOME' HAS BEEN DEFINED 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 TOTAL INCOME OF A RESIDENT OR A NON-RESIDENT PERSON. THE TOTAL INCOME OF THE ASSESSEE HAS TO BE COMPUTED UNDER THE REGULAR PROVI SIONS OF THE INCOME TAX ACT, 1961 AND IN THE CASE OF A COMPANY I T CAN BE ARRIVED AT BOTH UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND UNDER THE DEEMING PROVISION UNDER SECTION 1 15JB OF THE ACT. IT HAS BEEN PROVIDED THAT WHERE THE INCOME TAX PAYABLE BY THE ASSESSEE ON THE TOTAL INCOME COMPUTED UNDER REGULAR PROVISIONS OF THE ACT IS LESS THAN 7 % OF THE BOOK PROFIT PREPARED IN ACCORDANCE WITH THE COMPANIES 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 ASSES SEE SHALL BE THE AMOUNT OF INCOME TAX AT THE SPECIFIED RATE. WHE N WE LOOK AT THE PROVISIONS OF SECTION 87 OF THE INCOME TAX ACT, 1961, WE FIND THAT THE REBATE IS TO BE GRANTED FROM THE AMOU NT OF INCOME TAX CHARGEABLE ON THE TOTAL INCOME OF THE ASSESSEE. THE INCOME TAX IS COMPUTED AFTER ARRIVING AT THE TOTAL INCOME OF THE ASSESSEE AND SECTION 87 OF THE INCOME TAX ACT, 1961 DOES NOT DIFFERENTIATE BETWEEN THE TOTAL INCOME COMPUTED UND ER THE REGULAR PROVISIONS OF THE ACT OR UNDER SECTION 115J B OF THE INCOME TAX ACT, 1961. EVEN THOUGH THE SUB SECTION ( 1) OF SECTION 115JB STARTS WITH THE NON-ABSTANTE CLAUSE, 'NOT WITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVIS ION OF THIS ACT', WE FIND THAT IT IS ONLY FOR THE COMPUTATION O F THE TOTAL INCOME AND THE SUB SECTION (5) OF SECTION 115JB PRO VIDES FOR A SAVING CLAUSE THAT THE REST OF THE PROVISIONS OF TH E INCOME TAX ACT RELATING TO DEDUCTIONS, REBATE, ETC THE OTHER P ROVISIONS OF THE INCOME TAX ACT SHALL APPLY. THEREFORE IT IS CLE AR THAT THE PROVISION OF SECTIONS 87 AND 88A TO 88E ALSO APPLY AFTER THE TOTAL INCOME IS COMPUTED UNDER SECTION 115JB OF THE INCOME ITA NO.4113/DEL./2010 4 TAX ACT, 1961 AND SINCE THE ASSESSEE'S TOTAL INCOME INCLUDES THE INCOME FROM THE TAXABLE SECURITIES TRANSACTIONS, TH E ASSESSEE IS ENTITLED TO A DEDUCTION OF THE AMOUNT EQUAL TO THE STT PAID BY HIM IN RESPECT OF THE TAXABLE SECURITIES TRANSACTIO NS ENTERED INTO IN THE COURSE OF BUSINESS DURING THE PREVIOUS YEAR. THE ASSESSEE'S APPEAL IS THUS ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO GIVE REBATE UNDER SECTION 88E FOR THE S TT PAID BY THE ASSESSEE. AFTER HEARING BOTH THE SIDES AND GOING THROUGH THE ISSUE RAISED IN THE APPEAL AND THE DECISION OF ITAT, CITED SUPRA, AND CONSIDER ING THE FACT THAT THE PART B-TTI OF RETURN OF INCOME (AT PAGE 39 OF PAPER BOOK ) SHOWS THAT REBATE U/S 80E (4 OF SCHEDULE STTC) AVAILABLE TO THE ASSESSE E. RULE 12 OF I.T. RULES PRESCRIBES THE ITR-6 INDIAN INCOME TAX RETURNS FOR ASSESSMENT YEAR 2007-08 AND THESE RULES HAVE FORCE OF LAW. CONSIDERING ALL THESE FACTS, WE UPHOLD THE ORDER OF CIT (A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF DECEMBER, 2011. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 23 RD DAY OF DECEMBER, 2011/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-VIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.