DCIT 4(1), MUMBAI V. GANDHI SECURITIES & INVESTMENT P. LTD, MUMBAI

ITA 5162/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62687 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 09-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S C KAPADIA
• Keywords: Question of law; Cost of acquisition; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM & SHRI RAJEDNRA, AM ITA NO. 5162/MUM/2011 (ASST YEAR 2008-09) THE DY COMMR OF INCOME TAX 4(1), MUMBAI VS GANDHI SECURITIES & INVESTMENT P LTD 9 HAJI KASAM BLDG 2 ND FLOOR, TAMRAIND LANE - FORT, MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAACG2133P ASSESSEE BY SH S C KAPADIA REVENUE BY SH RAJESH K ARVIND DT.OF HEARING 9 TH JULY 2012 DT OF PRONOUNCEMENT 25 TH ,JULY 2012 PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 04/05/2011 OF CIT(A) FOR THE ASSESSMENT YEAR 2008 09. 2 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN T HIS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF B AD DEBTS WRITTEN OFF OF RS.1,24,683/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE OF LOS S OF RS.1O,69,943/- ON ACCOUNT OF MARKED TO MARKET. 3 .(I) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF TAX LIAB ILITY U/S. 1 15JB BY NOT ALLOWING CREDIT OF STT FROM THE TAX PAYABLE U/S. 1 15JB . (II) THE LD. CIT(A) HAS WRONGLY HELD THAT COMPARISO N BETWEEN THE TAX DETERMINED UNDER NORMAL PROVISIONS NOT DETERMINED UNDER S ECTION 1 15JB SHOULD BE MADE FOR THE PURPOSE OF DETERMINING APPLI CABILITY OF THE PROVISIONS OF SECTION 1 15JB ON GROSS BEFORE ALLOWING REBATE U/S . 88E OF THE ACT. 3 GROUND NUMBER 1 IS REGARDING DISALLOWANCE OF CLAI M OF BAD DEBTS AMOUNTING TO ` . 1, 24, 683/-. ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 2 3.1 THE ASSESSING OFFICER DISALLOWED THE CLAIM OF W RITE OFF OF BAD DEBTS AMOUNTING TO ` 1,24,683/-ON THE GROUND THAT THE AMOUNT IS NOT COV ERED BY SECTION 36 (2) BEING THE VALUE OF STOCK WAS NOT TRADING DE BT OF THE ASSESSEE. 3.2 ON APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR T HE ASSESSMENT YEAR 2000-02 AND 2004 05. 4 WE HEARD THE LEARNED DR AS WELL AS THE LD AR OF T HE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2004-05 VIDE ORDER DATED 22.6.2009 IN ITA NO 3380/MUM/2008 HAS CONSIDERED AND DECIDED THE IDENTI CAL ISSUE IN PARAGRAPHS 7 & 7.1 AS UNDER: 7 WE HAVE HEARD THE LEARNED REPRESENTATIVE OR THE PART IES AND RECORD PERUSED AS WELL AS GONE THROUGH THE DECISIONS CITED B Y THE LEARNED REPRESENTATIVES THE ASSESSING OFFICER MADE OUT THE CA SE .S 36(1)(VII) READ WITH SECTION 36(2) OF THE ACT. THE ASSESSING NOTICED THA T IN CASE OF STOCK BROKER WHAT IS CREDITED TO THE PROFIT & LOSS ACCOUNT IS THE BROKERAGE FROM PURCHASE AND SALE OF SHARES ON BEHALF OF THE CLIENTS NOT CRE DITED OR DEBITED TO P&L A/C AND HENCE THE SAME IS NOT INCLUDED IN THE INCOM E OF THE ASSESSES. THEREFORE, THE CONDITIONS OF SECTION 36(2) IS NOT FUL FILLED TO CLAIM THE AMOUNT AS BAD DEBT. 7.1 ABOVE BOTH ISSUES ARE COVERED BY THE JUDGMENT O F JURISDICTIONAL HIGH COURT IN THE CASE OF STAR CHEMICALS LTD IN INCOME TAX APPEAL NO. 1915 OF 2007 ORDER DATED 27.02.2007. CIT VS/ PR SHARE & STOCK BROKERS P LTD VIDE INCOME TAX APPEAL NO. 79 OF 2008 DT 26/6/2008 AND D ECISION OF INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF ACIT V OLYMPIA SE CURITIES LTD (SUPRA). IN THE LIGHT OF THE SAID DECISIONS THE CLAIM OF THE ASSESS EE IS ALLOWED., 4.1 WE FURTHER NOTE THAT THIS ISSUE IS ALSO COVERE D BY THE SPECIAL BENCH DECISION OF THIS TRIBUNAL IN CASE OF SHRI SHREYAS S MORKHIA REPORTED IN 5 ITR (TRIB) 1 (MUMBAI)(SB) WHICH HAS BEEN UPHELD BY THE HONOURABLE JURISDICTIO NAL HIGH COURT IN ITA NO. 89 OF 2011 VIDE ORDER DATED 28/02/2012. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE ANDS AGAINST THE REVENUE. ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 3 5 GROUND NUMBER 2 REGARDING DISALLOWANCE OF LOSS ON ACCOUNT OF MARKED TO MARKET. 5.1 THE ASSESSEE HAD DEBITED IN THE PROFIT AND LOSS ACCOUNT PROVISION FOR LOSS ON MARK TO MARKET OF OPEN CONTRACT IN EQUITY INDEX/STO CK FUTURE BUT THE PROFIT ON ACCOUNT OF SUCH MARK TO MARKET HAD BEEN IGNORED ON THE BASIS OF PRUDENT PRINCIPLE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE DERI VATIVE CONTRACTS ARE NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AT THE INCEPT ION THEREOF AT THE TIME OF PURCHASE, THEY DO NOT AND CANNOT FORM PART OF STOCK -IN-TRADE AND HENCE IT CANNOT BE VALUED AT THE TIME OF PREPARATION OF BALANCE SHE ET AS STOCK-IN-TRADE. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT EVEN , IF IT IS ASSUMED THAT THE FUTURE CONTRACT FOR THE DERIVATIVE IS STOCK-IN-TRADE WHICH COULD BE VALUED AT COST OR MARKET PRICE, WHICHEVER IS LOWER, THE COST OF ACQUISITION BEING NIL, THE VALUATION OF SUCH CONTRACT WILL BE NEGATIVE FIGURE. IT WAS FURTHER O BSERVED THAT THE FUTURE CONTRACTS ARE IN THE NATURE OF READY FORWARD CONTRACTS ON WHICH N EITHER PROFIT NOR LOSS ACCRUE UNTIL AND UNLESS THE CONTRACTS ARE SETTLED. THE ASSESSING OFFICER ACCORDINGLY, MADE DISALLOWANCE OF ` . 10,69,943/-. 5.2 ON APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN CASE OF EDELWEISS CAPITAL LTD IN ITA NO 5324/MUM/2007. 6 WE HAVE HEARD THE LD D.R. AS WELL AS THE LEARNED A.R OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN CAS E OF EDELWEISS CAPITAL LTD VS ITO VIDE ORDER DATED 10 TH NOV 2010 IN ITA NO. 5324/MUM/2007 WHEREIN THIS TR IBUNAL HAS HELD IN PARA 7 AND 8 AS UNDER: 7. WE HAVE CONSIDERED THE FACTS AND THE RIVAL CONT ENTIONS. IN THE SCHEDULE ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AN D PROFIT & LOSS ACCOUNT ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 4 FOR THE YEAR UNDER APPEAL (PAGE 13 OF THE PAPER BOOK) , THE ASSESSEE HAS MADE THE FOLLOWING NOTE: - H. EQUITY FUTURES IND EX / STOCK (A) INITIAL MARGIN EQUITY DERIVATIVE INSTRUMENTS, REPRESENTING INITIAL MARGIN PAID, AND MARGIN DEPOSITS, REPRESENTING ADDITIONAL MARGIN OVER AND ABOVE INITIAL MARGIN, FOR ENTERING INTO CONTRACTS FOR EQU ITY INDEX / STOCK FUTURES, WHICH ARE RELEASED ON FINAL SETTLEMENT / SQUARING-UP OF UNDERLYING CONTRACTS, ARE DISCLOSED UNDER LOANS AND ADVANCES. (B) EQUITY INDEX / STOCK FUTURES ARE MARKED-TO-MARKE T ON A DAILY BASIS. DEBIT OR CREDIT BALANCE DISCLOSED UNDER LOANS AND ADVANC ES OR CURRENT LIABILITIES, RESPECTIVELY, IN THE MARK-TO MARKET MARGIN EQUITY I NDEX / STOCK FUTURES ACCOUNT, REPRESENTS THE NET AMOUNT PAID OR RECEIVE D ON THE BASIS OF MOVEMENT IN THE PRICES OF INDEX / STOCK FUTURES TIL L THE BALANCE SHEET DATE. AMOUNT PAID TO BROKERS IN ADDITION TO MARK-TO-MARKET MARGINS IS DISCLOSED AS MARGIN DEPOSITS UNDER LOANS AND ADVANCES. (C) AS ON THE BALANCE SHEET DATE, PROFIT /LOSS ON OP EN POSITIONS IN INDEX / STOCK FUTURES ARE ACCOUNTED FOR AS FOLLOWS: 7 ITA NO: 5324/MUM/2007 CREDIT BALANCE IN THE MARK-TO MARKET MARGIN EQUIT Y INDEX / STOCK FUTURES ACCOUNT, BEING ANTICIPATED PROFIT, IS IGNORED AND N O CREDIT FOR THE SAME IS TAKEN IN THE PROFIT AND LOSS ACCOUNT. DEBIT BALANCE IN THE MARK-TO-MARKET MARGIN EQU ITY INDEX / STOCK FUTURES ACCOUNT, BEING ANTICIPATED LOSS, IS ADJUSTED IN T HE PROFIT AND LOSS ACCOUNT. (D) ON FINAL SETTLEMENT OR SQUARING-UP OF CONTRACTS FOR EQUITY INDEX / STOCK FUTURES, THE PROFIT OR LOSS IS CALCULATED AS THE DIFF ERENCE BETWEEN SETTLEMENT / SQUARING-UP PRICE AND CONTRACT PRICE. ACCORDINGLY, DE BIT OR CREDIT BALANCE PERTAINING TO THE SETTLED / SQUARED-UP CONTRACT IN MARK-TO-MARKET MARGIN EQUITY INDEX / STOCK FUTURES ACCOUNT IS RECOGNIZED IN THE PROFIT AND LOSS ACCOUNT. THE AFORESAID NOTE GIVES A FAIR PICTURE OF THE NATURE OF THE PROVISION. THE PROVISION IN SUBSTANCE HAS BEEN MADE TO COVER THE ANTICIPATED LOSS IN THE DERIVATES TRADING. THERE IS NO DISPUTE THAT THE A SSESSEE HOLDS DERIVATIVES AS ITS STOCK-IN-TRADE AND THERE IS ALSO NO DISPUTE THAT IT FOLLOWS THE PRINCIPLE COST OR MARKET PRICE, WHICHEVER IS LOWER IN VALUING THE DER IVATIVES. WHEN THE DERIVATIVES ARE HELD AS STOCK-IN-TRADE THEN WHATEVER RULES APPLY TO THE VALUATION OF STOCK-IN-TRADE WILL HAVE TO BE NECESS ARILY APPLY TO THEIR VALUATION ALSO. IT IS A WELL SETTLED POSITION IN LAW THAT W HILE ANTICIPATED LOSS IS TAKEN INTO ACCOUNT IN VALUING THE CLOSING STOCK, ANTICIPATED P ROFIT IN THE SHAPE OF APPRECIATED VALUE OF THE CLOSING STOCK IS NOT BROUGHT INTO THE ACCOUNT, AS NO PRUDENT TRADER WOULD CARE TO SHOW INCREASED PROFIT B EFORE ITS REALIZATION. THIS IS THE THEORY UNDERLYING THE RULE THAT THE CLOSING STOCK IS TO BE VALUED AT COST OR MARKET PRICE 8 ITA NO: 5324/MUM/2007 WHICHEVER IS THE LOWER, AND IT IS NOW GENERALLY ACCEPTED AS AN ESTABLISHED RULE OF COMMERCI AL PRACTICE AND ACCOUNTANCY. THIS IS WHAT THE SUPREME COURT HELD IN THE CASE OF CHAINRUP SAMPATRAM VS. COMMISSIONER OF INCOME TAX, WEST BENGA L (1953) 24 ITR 481 (SC), SPEAKING THROUGH HONBLE JUSTICE PATANJALI SA STRI, THE THEN CHIEF JUSTICE ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 5 OF INDIA (PAGE 485 486 OF THE REPORT). AT PAGE 4 86 THE SUPREME COURT FURTHER OBSERVED THAT LOSS DUE TO A FALL IN PRICE BELOW COST IS ALLOWED EVEN IF SUCH LOSS HAS NOT BEEN ACTUALLY REALIZED. QUOTIN G FROM THE CASE OF WHIMSTER & CO. VS. COMMISSIONERS OF INLAND REVENUE (1926) 1 2 TAX CASES 813, THE SUPREME COURT OBSERVED THAT THE PROFITS THAT ARE CHA RGEABLE TO TAX ARE THOSE REALIZED IN THE YEAR AND THAT AN EXCEPTION IS RECOGNIZED WHERE A TRADER PURCHASED AND STILL HOLDS GOODS WHICH ARE FAL LEN IN VALUE IN WHICH CASE THOUGH NO LOSS HAS BEEN REALIZED NOR IT HAS OCC URRED, NEVERTHELESS AT THE CLOSE OF THE YEAR HE IS PERMITTED TO TREAT THES E GOODS AS OF THEIR MARKET VALUE. THIS DECISION OF THE SUPREME COURT GOVERNS THE FACTS OF THE PRESENT CASE. IT IS TO THE ASSESSEES STRENGTH THAT THE I NSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IN ITS GUIDELINES HAVE ALSO A PPROVED OF THE RULE OF PRUDENCE WHICH REALLY MEANS THAT WHILE ANTICIPATED LOSSES CAN BE TAKEN NOTE OF WHILE VALUING THE CLOSING STOCK, ANTICIPAT ED PROFITS CANNOT BE RECOGNIZED. THE ANTICIPATED LOSS, IN THE LIGHT OF T HE JUDGMENT OF THE SUPREME COURT CITED ABOVE, CANNOT BE TREATED AS A CONTINGENT LIABILITY. 8. THE LEARNED DR POINTED OUT THAT THE ASSESSEE HAS VALUED EACH SCRIP OF THE DERIVATIVES AS AT THE END OF THE YEAR. WE DO NOT 9 ITA NO: 5324/MUM/2007 SEE HOW THIS CAN MAKE ANY DIFFERENCE TO THE LEGAL PR INCIPLE. IF THE DERIVATIVES HAVE BEEN TREATED AS STOCK-IN-TRADE THEN THERE IS NOTHING UNUSUAL IN THE ASSESSEE VALUING EACH DERIVATIVE BY APPLYING THE RULE COST OR MARKET WHICHEVER IS LOWER. 7 FOLLOWING THE ORDER OF THIS TRIBUNAL IN THE CASE CITED SUPRA, WE DECIDE THIS IS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REV ENUE. 8 GROUND NUMBER 3 REGARDING DISALLOWANCE OF CREDIT OF STT FROM THE TAX PAYABLE UNDER SECTION 115 JB. 8.1 THE ASSESSEE HAD MADE THE PAYMENT OF TAX UNDER NORMAL PROVISIONS BY COMPARING HIS TOTAL INCOME UNDER SECTION 115 JB BEF ORE CLAIMING REBATE UNDER SECTION 80E. THE ASSESSING OFFICER ASKED THE ASSESS EE AS TO WHY THE TOTAL INCOME O AFTER GRANTING REBATE UNDER SECTION 88E BE NOT COMP ARED WITH THE INCOME UNDER SECTION115JB. THE ASSESSEE SUBMITTED THAT TAX REBAT E IS A STEP WHICH COMES AFTER DETERMINING INCOME TAX PAYABLE ON TOTAL INCOME COMP UTED AS PER APPLICABLE PROVISIONS INCLUDING MAT; THEREFORE, THE COMPARIS ON UNDER SECTION 115 JB IS BETWEEN INCOME TAX PAYABLE ON TOTAL INCOME AND 10% OF THE BOOK PROFIT. IN ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 6 SUPPORT OF HIS CONTENTION, THE ASSESSEE HAS REFERRE D THE INCOME TAX RETURNS (ITR-6) PRESCRIBED BY CBDT WHEREIN THE GROSS TAX LIABILITY BEFORE CLAIM OF REBATE UNDER SECTION 88E IS FIRST TO BE COMPARED WITH THE TAX CR EDIT UNDER MAT AND THEN FROM THE HIGHER OF THE MAT LIABILITY AND TAX LIABILITY UND ER NORMAL PROVISION OF ACT. ACCORDINGLY, THE ASSESSEE SUBMITTED THAT THE TAX RE BATE UNDER SECTION 80E IS TO BE REDUCED TO ARRIVE AT FINAL TAX PAYABLE BY THE ASSES SEE. 8.2 THE ASSESSING OFFICER DID NOT AGREE WITH THE C ONTENTION OF THE ASSESSEE AND HELD THAT THE PROVISIONS OF SECTION 115 JB ARE TO E NSURE COLLECTION OF TAX WHERE THE TAX LIABILITY UNDER NORMAL PROVISIONS OF THE ACT WA S MUCH LESS. ACCORDINGLY, THE ASSESSING OFFICER HELD THAT THE REBATE UNDER SECTIO N 88E IS AKIN TO THOSE IN RESPECT OF LIP/ PF. 8.2 ON APPEAL, THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF BANGALORE BENCHES OF THE TRIBUNAL IN C ASE OF M/S HORIZON CAPITAL LTD VS ITO . 9 WE HAVE HEARD THE LD D.R. AS WELL AS THE LEARNED A.R. OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LEA RNED A.R. OF THE ASSESSEE HAS POINTED OUT THAT THIS ISSUE IS COVERED BY THE DECIS ION OF KARNATAKA HIGH COURT IN CASE OF CIT VS M/S HORIZON CAPITALS LTD WHEREBY THE DECISION OF THE BANGALORE BENCHES OF THE TRIBUNAL HAS BEEN UPHELD. HE HAS FURTHER SUBMIT TED THAT AN IDENTICAL ISSUE WAS ALSO CONSIDERED AND DECIDED BY THE KOLKATA BENCHES OF THIS TRIBUNAL IN CASE OF ITO VS ADVENT STOCK BROKING P T LTD. 9.1 ON THE OTHER HAND THE LEARNED NOT D.R. HAS RELI ED UPON THE ORDER OF THE ASSESSING OFFICER. ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 7 9.2 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND REL EVANT MATERIAL ON RECORD, WE NOTE THAT THE HONOURABLE KARNATAKA HIGH COURT IN CA SE OF CIT VS M/S HORIZON CAPITALS LTD IN ITA NUMBER 434 OF 2010 VIDE DECISI ON DATED 24 TH OCTOBER 2011 HELD IN PARAGRAPH 15 TO 17 AS UNDER: 107 OF PAPER BOOK. 15. UNDER SECTION 88E, WHERE THE TOTAL INCOME OF AN ASSESSEE IN A PREVIOUS YEAR INCLUDES ANY INCOME, CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OF PROFESSION, ARISING FROM TAXABLE SECURITIES TRANSAC TIONS, HE SHALL BE ENTITLED TO A DEDUCTION, FROM THE AMOUNT OF INCOME-T AX ON SUCH INCOME ARISING FROM SUCH TRANSACTIONS. SECTION ALSO PROVIDES THE LIMIT TO WHICH DEDUCTIONS SHALL BE GIVEN. 16. THEREFORE, IT IS CLEAR THAT THE ASSESSEE IS LIABL E TO PAY SECURITIES TRANSACTION TAX WHEN HE ENTERS INTO SECURITIES TRANSACTION. TAX IS PAYABLE SIMULTANEOUSLY AFTER REALIZING THE CONSIDERATION. HOWEVER, IF THAT TRANSACTION IS INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE WHERE THE TOTAL INCOME S ASSESSED EITHER UNDER THE PROVISIONS OF THE ACT OR UNDER SECTION 115)B WHEN TAX CHARGEABLE ON SUCH INCOME IS ARRIVED AT, HE IS GIVEN THE BENEFIT OF TAX DEDUCTIONS OF THE AMOUNT, WHICH HE HAS PAID UNDER SECTION 88E BY VIRTUE OF SEC TION 87. WHEN UNDER SECTION 82A, THE ASSESSEE S MADE LIABLE TO PAY TAX WITH AN ASSURANCE THAT IT WILL BE DEDUCTED AND 87 OF THE ACT 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 ASSESSEE. IN OTHER WORDS, PAYM ENT OF TAX TWICE ON THE SAME INCOME IS AVOIDED. 17. THEREFORE, THE CONTENTION THAT THIS BENEFIT IS N OT AVAILABLE TO THE ASSESSEE WHOSE TOTAL INCOME IS ASSESSED UNDER SECTION 115)B 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, TH E TAX PAID UNDER SECTION 88E IS GIVEN DEDUCTION, BY WAY OF REBATE, UNDER SECTI ON 87 OF THE ACT. THIS IS THE LEGISLATIVE INTENT. THAT IS A PROMISE TO GIVE DE DUCTION OF THE TAX ALREADY PAID. THIS IS THE MODE IN WHICH TAX ALREADY PAID IS HANDED BACK AT THE TIME OF FINAL COMPUTATION. THEREFORE, THE JUDGMENT REFERRED BY THE TRIBUNAL IS STRICTLY IN ACCORDANCE WITH LAW AND DOES NOT SUFFER FROM ANY LEGA L INFIRMITY, WHICH CALLED FOR INTERFERENCE. WE DO NOT SEE ANY SUBSTANTIA L QUESTION OF LAW INVOLVED IN THIS, WHICH MERITS ADMISSION. THE APPEAL IS DISMISSED. 9.3 RESPECTFULLY FOLLOWING THE DECISION OF HONOURAB LE KARNATAKA HIGH COURT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE. ITA NO.5162/M/2011 GANDHI SECURITIES & INVESTMENT P LTD 8 10 IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH , DAY OF JULY 2012. SD/- SD/- ( RAJENDRA ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 25 TH ,JULY 2012 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI